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Introducing the Human Capital Metrics Consortium

April 1, 2004
Related Topics: HR Services and Administration, Featured Article

With Jac Fitz-enz leading the charge, there is now widespread acceptance that human resources activities have economic value and, consequently, can and should be measured. In practice, however, the lack of uniform metrics has made it difficult for companies to put effective measurement systems in place.

    To address this lack of standardization, the Human Capital Metrics Consortium was established last year. The group is an independent nonprofit membership organization composed of human-capital specialists, academics, researchers and industry associations. Members also include companies such as Exult, Manpower, PeopleSoft, State Farm, Eli Lilly and Starbucks.

    Over the last year, the consortium’s members have been focusing their efforts on defining standardized metrics in the recruitment and staffing arena. Heather Hartmann, executive director, says that volunteer committees have been working to define metrics for new-hire quality, customer satisfaction, time to fill and recruiting efficiencies. "These committees are discussing what they think the standard definition of the metric ought to be," Hartmann says. "For recruiting efficiency, for example, they are working to determine such things as the formula that should be used to calculate recruiting efficiency, who the customer is and how companies determine recruiting outcomes. We are specifically focused on outcome metrics--what the C-level folks are interested in. We’re not focused on process metrics."

    Once the committees create a working definition of a metric, that definition will be published on the consortium’s Web site for public comment. "We will then take public comments and tweak the metric if needed," Hartmann says. "Once that is done, the committee and members vote to accept the metric."

    What this means is that if a human resources executive is just starting to measure the effectiveness of his company’s human-capital practices, the consortium’s standards will help him understand exactly what needs to be measured and how. And if an executive has been gathering outcome data for a while, the consortium’s benchmark survey also can help her measure her outcomes against those of other organizations in a more accurate apples-to-apples comparison. "Our data will give companies something reliable to benchmark against," Hartmann says.

    Other activities planned by the consortium include developing a metrics dictionary, standardizing traditional human resources measurements, developing outcome metrics from an outsourcing perspective and certifying organizations that are using standardized metrics.

    How fast the consortium accomplishes these goals will depend on how quickly the membership grows. "Human resources executives who want to change the world in which they work are invited to get involved," Hartmann says. To learn more about the consortium and how to participate, visit its Web site at

Workforce Management, April 2004, p. 51 -- Subscribe Now!

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