Did You Know that what you Measure Matters?

If You Can't Measure It, You Can't Improve It | Lessons from Peter Drucker


So ask yourself this question – are you measuring the right thing?
Typically we focus on measuring profit. What is your gross or net profit? What is your EBITDA?
(Earnings before interest, taxes, depreciation).

However, there are many more things that we can measure other than just profit.

We need to look at measuring from a people perspective.

1) What are you measuring for your recruitment selection?
Are you measuring job advertising, recruitment time, consultant fees and psychometric testing fees?

2) What are you measuring from a remuneration reward perspective?
Are you measuring salaries, payroll, superannuation, leave, bonuses?

3) What are you learning from a development perspective?
Are you measuring training, internal, external, time and materials?

4) From a workplace health and safety perspective, are you measuring costs of accidents, lost
time due to accidents, workers’ compensation, staff turnover, or even absenteeism?
However, critical thought isn’t just about what you are measuring. It’s about what you then do with it once you take that measure.

The first step is to measure, and then you need to do something with it.

It’s like taking that annoying telephone call from the telemarketer who says, “Oh, we’d like to do a survey with you. Do you have five minutes?” And you say, “Yes.” So you do the survey, and they take your measurement and then nothing happens. How do you feel? Well, you’ve just wasted five minutes of your time. You have no idea what will happen with the information, and there is no benefit for you personally to have done that. It’s similar from a measurement perspective. What you measure does matter, so you need to do something with it.

The first is organisational measurement planning when we think about the HR framework.

So every 12 months, you should do a benchmark of your HR plan, processes and culture. It would be best if you benchmarked your organisation’s culture and then developed a 12-month plan as a result of that. That plan should look at your system, processes, governance, compliance, performance management, and continuous improvement.

One organisation we worked with recently was recruiting 950 new staff a year, with a staffing number of 900. Therefore, they had exponential growth; however, 600 people left their organisation in the same calendar year. So measuring the fact that they had a phenomenal recruiter, they didn’t address the issue that they had 600 people offboarded in the same 12 month period. By having a measurement, we were able to look at both their systems and processes. How did they recruit, what type of person was being recruited, the process of reference checks, and were they targeting the right skillsets? Additionally, was there onboarding, training, inducting, and coaching after the recruitment.

This example found that taking measures has been a clear focus on quantity over quality. When they started recruiting the right skills for the correct positions rather than just recruiting, the end outcome has been a lower turnover, more capable staff, and better results for the organisation.

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