Challenges in Measuring and Communicating the ROI of HR Programs to Leadership Addressed in New Guide Published by McLean & Company

The new research-backed guide from the global HR research and advisory firm offers suggestions for HR organizations who struggle to accurately communicate the value of their programs to senior leadership and the board.

TORONTO, Oct. 19, 2023 /PRNewswire/ - As organizations become increasingly concerned with budgets and bottom lines amid uncertain economic times, HR is facing challenges in effectively measuring the value of programs and communicating the return on investment (ROI) to key players, such as the C-suite. To help HR leaders demonstrate the value of their programs both financially and beyond financial outcomes, McLean & Company has released its new resource, Guide to Measuring the ROI of HR Programs.

McLean & Company's new guide highlights that only 28% of organizational key players are very satisfied with the value HR provides relative to their perception of its operational and staffing costs, leaving the remaining 72% feeling less than very satisfied. Therefore, it is not surprising that 65% of respondents in the firm's 2023 HR Trends survey indicated that their HR departments were not high performing at controlling labor costs and maximizing the value of labor spend.

"The true value of an HR program exists beyond direct financial gain," says Grace Ewles, Director of HR Research & Advisory Services at McLean & Company. "Exploring the value on investment (VOI) in addition to direct financial outcomes provides a complete picture of an HR program's impact. Showcasing these benefits helps shift perceptions away from HR as a cost center by reinforcing the strategic value of HR investments for key players."

Program evaluation is a resource-intensive process that requires a methodical approach and data literacy, with many HR teams currently ill-equipped to manage these obstacles. According to the resource, measuring the value of HR programs links HR investments to organizational objectives, demonstrating how HR contributes to an organization's profitability and enabling data-driven decision making around organizational spending.

To increase satisfaction in and support for HR programs from key individuals such as senior leadership and the board, McLean & Company advises that HR needs to engage them, manage their expectations, and generate buy-in to maintain support throughout the lengthy evaluation process.

HR leaders seeking to reveal how HR contributes to overall organizational success and drives organizational objectives beyond profitability can follow McLean & Company's three-phase plan, available in the guide. The steps are outlined below:

1. Prepare to measure ROI. The first step guides HR leaders through the identification of HR programs that should be evaluated and their associated outcomes, metrics, and timelines.
2. Evaluate program ROI. Step two prioritizes the measurement of the ROI of HR programs and the interpretation of the results within the larger context of the organization.
3. Communicate and leverage ROI. The third and final step focuses on communication and sharing the ROI results within the broader program VOI with relevant individuals.

McLean & Company advises HR leaders not to underestimate the importance of fully representing the costs of a program. If costs are inaccurately represented, the time and effort dedicated to measuring the outcomes of the program are wasted. The firm also highlights that ROI is not self-sustaining and requires ongoing evaluation and iteration based on changing organizational needs and context. Intentional and continuous adjustments to HR programs maximize long-term ROI by ensuring programs continue to positively impact employees in an ever-changing environment.

To access the full guide, including a real-world example of HR program ROI evaluation and advanced analytics techniques, download the Guide to Measuring the ROI of HR Programs.

McLean & Company also offers workshops to HR professionals to support them in building programs and navigating other nuances of their roles. For more information, please visit mcleanco.com/workshops.

Media interested in connecting with McLean & Company analysts for exclusive, data-backed insights and commentary on measuring and communicating the value of HR programs, generative AI in HR, the future of work, and more can connect with Senior Communications Manager Kelsey King at [email protected]. 

For HR leaders as well as C-suite and VP-level executives who are responsible for enabling, streamlining, and future-proofing their organizations' HR functions, Signature, McLean & Company's highly anticipated HR industry conference, is returning from November 5 to 7, 2023, in Orlando, Florida.

Register for Signature 2023 or learn more here. 

Through data-driven insights and proven best-practice methodologies, McLean & Company offers comprehensive resources and full-service assessments, action plans, and training to position organizations to meet today's needs and prepare for the future.

McLean & Company is a division of Info-Tech Research Group.

Media professionals can register for unrestricted access to research across IT, HR, and software and over 200 industry analysts through the firm's Media Insiders program. To gain access, contact [email protected].

SOURCE McLean & Company