HR metrics quantify the cost and the impact of employee programs and HR processes and measure the success (or failure) of HR initiatives. They enable a company to track year-to year-trends and changes in these critical variables.<\/p>\n
Human capital is important to organization because they are the people who are actually working for the organization. They build the company\u2019s core competencies and competitive advantages to the organization. With effective management of the human capital, a company can achieve the maximum outputs from its own human capital and be superior to other competitors.<\/p>\n
Some organizations are unaware even of how many people they have in their organization. The problem with HR is that they have been held unaccountable in the initiatives and programs they promote across the organization. Typically, nobody in the organization, let alone top business leaders of the organization are aware of the impact of these programs whether, positive or negative. This is because HR leaders have not been delivering metrics that show the value of their programs or investments. HR metrics is important because it allows organizations to make the connection between the value of what HR is doing and the outcomes of the business. If HR professionals don\u2019t measure their function\u2019s effectiveness and providing decision-making leaders the data they need, HR will continue to be undermined and eventually sidelined when it comes to having a seat at the table. Therefore, many experts urge HR professionals to use the data they have in front of them and understanding how metrics and analysis could give HR an advantage as an overall better strategic partner. This will allow them to help business leaders solve the people problems that matter to the organization.<\/p>\n
Before HR metrics, many of the HR activities and processes were difficult to quantify, making it hard to fully understand the real employee costs associated with each HR functions. For example, \u201ca decade ago, if someone looked for turnover rate by performance category, it could be a two-week project.\u201d With HR metrics, more specifically Retention metrics, HR leaders are able to quantify variables such as turnover rate, average tenure, the rate of veteran worker, or the financial impact of employee turnover. These results can indicate how much separating employees is costing the company and help the company to create proactive plans to prevent future loss of top talent.<\/p>\n
More importantly, metrics enable leaders and decision makers in organizations towards more efficient and better delivery of HR services<\/p>\n
General HR Metrics<\/strong><\/p>\n Revenue per Employee <\/strong><\/p>\n Determines value of employees to company.<\/p>\n Revenue per employee = Total revenue \u00f7 Total number of employees<\/p>\n Cost per Hire<\/strong><\/p>\n It measures what you\u2019re paying to recruit and onboard each new employee.<\/p>\n Cost per hire = All recruiting and HR staffing costs \u00f7 Number of new hires<\/p>\n Employee Turnover<\/strong><\/p>\n Determines whether employees are happy or not. A 20% turnover rate is the norm and 10% or less, is a good goal. Turnover time frame can be month, quarter, or year.<\/p>\n Turnover rate = Number of employee terminations \u00f7 Average number of employees<\/p>\n Overtime Percentage<\/strong><\/p>\n It tells how efficient employee scheduling is.<\/p>\n Overtime percentage = Overtime pay amount \u00f7 Total payroll<\/p>\n Absenteeism<\/strong><\/p>\n Tells about employee health and wellness<\/p>\n Absenteeism = Workdays missed \u00f7 Total workdays scheduled<\/p>\n Length of Service<\/strong><\/p>\n Tells employee job satisfaction and workforce happiness.<\/p>\n Length of service = (Today\u2019s date \u2013 Employee\u2019s hire date) \u00f7 365<\/p>\n Job Satisfaction Rate<\/strong><\/p>\n It is measured on a survey like customer satisfaction survey.<\/p>\n Job satisfaction rate = Number of people who report being satisfied \u00f7 Total number of employees<\/p>\n Employee Productivity and Performance Metrics<\/p>\n Profit per Employee<\/strong><\/p>\n Profit per employee = Business profit \u00f7 Number of employees<\/p>\n Health Care Costs per Employee<\/strong><\/p>\n Health care costs per employee = Total health care costs \u00f7 Number of employees signed up for health care<\/p>\n Average Time Until Promotion or Pay Increase<\/strong><\/p>\n Average time until promotion = Date of pay increase or promotion \u2013 hire date<\/p>\n Cost of HR per Employee<\/strong><\/p>\n Cost of HR per employee = Total HR salary and benefits \u00f7 Number of employees<\/p>\n Training and Development Metrics<\/p>\n Training Spend per Employee<\/strong><\/p>\n Training spend per employee = Total training costs divided by \u00f7 Number of employees<\/p>\n Training Return on Investment<\/strong><\/p>\n Training return on investment (ROI) = Cost of employee training \u00f7 Value of increased performance<\/p>\n Innovation<\/strong><\/p>\n Innovation = Number (or value) of successful product or process ideas \u00f7 Total number of suggestions<\/p>\n Talent Acquisition Metrics<\/p>\n A short summary of each Talent Acquisition sub-category, including examples, follows.<\/p>\n Recruiting Metrics<\/strong><\/p>\n Recruiting metrics include efficiency, number of hires achieved per recruiter, and the average cost per hire. In an organization some positions have greater impact as compared to other positions. The key positions are given a priority and weight age in the overall assessment of how well the individual recruiters have performed in managing the talent. Recruiting is measured strategically using the following metrics.<\/p>\n By tracking the above outcomes recruiters can be identified for the areas that require improvements. The best recruiters are identified on what makes them successful and they can be used the train other recruiters.<\/p>\n The recruiters\u2019 goals have to be consistent with the staffing strategy and the company\u2019s objectives. The recruiters are also given feed back to overcome their short coming in performance. Monitoring a recruiters\u2019 behavior is a difficult task, more so when the recruiter is located offsite. Hence, it is important to ensure the recruiting goals are aligned with the goals of the organizations.<\/p>\n","protected":false},"excerpt":{"rendered":" HR metrics quantify the cost and the impact of employee programs and HR processes and measure the success (or failure) of HR initiatives. They enable a company to track year-to year-trends and changes in these critical variables. Human capital is important to organization because they are the people who are actually working for the organization….<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-114418","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"\n\n
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