Should a company hire a young talented employee or an experienced one? Is it necessary to hire employees from a temporary employment agency? Should a company increase its paid annual leave or reduce its weekly working hours? Should a company offer hybrid work, mobile work or preferably on-site work?
All these above human resource management decisions can be answered with the help of HR controlling because the answers depend on the situation and the needs of a company.
Definition and Objective of HR Controlling
HR controlling is one of the management tools that help a company address personnel-related issues using qualitative (e.g. SWOT analysis) or quantitative data (i.e. HR metrics). In addition, HR controlling can primarily deal with short-term planning cost and ROI measures (operational) or focus on integrating personnel objectives into the company's strategy and translating strategies into concrete plans and measures (strategic).
The ultimate goal of HR controlling is to ensure "added value" as well as to measure the success of the HR department, to evaluate or re-evaluate its policies (e.g. work structure, organisation of the HR department) and to adjust its personnel-related objectives (e.g. personnel costs, qualification).
To do this, it is necessary to plan and build an information system for HR controlling to allow both regular and ad hoc enquiries of numbers and information, and to monitor and direct activities based on the company's goals.
HR Controlling Tools
- The basis of HR controlling are statistics on personnel cost indicators (e.g. remuneration, fluctuation) and personnel key figures (e.g. women's quota, absenteeism) (see HR Metrics).
- Qualitative indicators, such as employee satisfaction and leadership (a measurable indicator should be defined)
- Systematic and regular monitoring of basic HR controlling (e.g. an annual standard report)
- Activity-based cost accounting: deciding whether to train a skilled worker or hire a skilled worker.
- HR Metrics
- Value-added calculation
- Benchmarking
- Employee survey
- Audits to assess the quality of the processes and optimise them
- Balanced scorecard
- SWOT analysis
- Scenario technique with consideration of the causality and functional chain and its complexity
- Competency models that consider the aspect of company culture or personality attributes
- Potential analyse, such as a portfolio with certain dimensions
- Human capital calculation
Further reading:
- https://www.perwiss.de/personalcontrolling.html (in German)
- https://vdocument.in/hr-controlling.html?page=6 (in German)
(Last modified on 30 December 2022)