15 HR Metrics That Need to Be Implemented in Your Company

15 HR Metrics That Need to Be Implemented in Your Company

           Companies are using HR metrics in their overall business strategy. . HR metrics are indicators that enable you to track and measure the performance of HR duties. This means they are using data analytics in managing the workforce and HR practices. They are doing this by measuring employee data to get clarity on where the business is headed. HR metrics help you measure how your human capital contributes to the performance of your business.

The metrics give you information on the strengths of your business and areas that need improvement. Combining HR metrics and predictive analysis allows you to maximize your workforce and acquire fresh talent. Depending on how you utilize your HR metrics, can determine whether your business will be successful.

With the digitization of HR processes, you need to set up your data analytics strategy. In this post, I will highlight some top HR metrics you need to track in your company.

Time to Hire

Time to Hire is the number of days between when a candidate applies for a job and when they accept the offer. During recruitment, the time taken to hire enlightens you on your competence and the candidate experience. You get to know the rate at which you process a candidate’s job acceptance. If you take a long time to hire you are not efficient. Candidates may also drop out of long recruitment processes. Best candidates who are in demand do not wait.

Cost per Hire

This metric shows the cost your organization incurs to hire a candidate. Just like time, it indicates how effective your recruitment process is. How do you calculate the cost per hire? You add together internal and external recruiting costs then divide by the total number of hires in your company. Cost per hire should include all resources and time taken to hire.

Employee Early Turnover

Early Turnover is expensive. It is a crucial metric that will determine the success of your organization. It shows you whether a person mismatched the company or his or her position. It takes half to a full year before an employee is fully integrated into a company. There might be an issue with your process if you are constantly losing workers.

Revenue per Employee

Revenue per Employee indicates the quality of your hired employees. You get revenue per employee by dividing the total revenue by the total number of workers. On average, your workers should earn you more than you use to hire them. You understand the benefit of your human capital to the cost of hire.

Employee Productivity Rate

Productivity rate shows you how the good changes in your workforce affect the productivity of the organization. Especially when managing remote employees, it is very important. You need to track and determine which employees are productive and who are not. You get the employee productivity rate of a person by dividing the total revenue by the total number of workers.

Profit per Employee

This metric indicates profit per employee for the last 12 months. You get profit per employee by dividing the net profit of the company by the total number of employees. For the added employees to your workforce, when calculating profit per employee, ensure you remove their fixed costs. This metric shows you if your staffing positions are appropriate.

Training Cost per Employee

Training cost per Employee assists you calculate the total money used in training workers in a year. To calculate this you first find out the total cost the company incurred in training workers. This is to include costs such as travels costs, course fees, and if a learning management system was used, its cost too. You then divide this number with all employees being paid.

Billable Hours per Employee

This metric refers to the number of working hours an employee spends on a task. This metric is suitable for professional firms like law and consultancy firms. You combine this metric with others like employee engagement and performance to help you in analysis. This metric provides you with valuable metrics between your departments and managers.

Health Care Cost per Employee

With this metric, you understand how much money you spend in the budget for employee insurance health costs. As insurance costs are increasing, this metric helps you find ways of cutting the costs and have better benefits for employees and their families. To calculate this, you sum up health insurance costs for a whole year and divide it with insured workers.

Employee Engagement

Work engagement contributes to the success of the business. People who are more engaged are more productive and it shows that they love their job. Engaged workers are positive about challenges, therefore, performing better. An engaged workforce is a benefit to the company.

Absenteeism

The absenteeism metric is the total time your employees are absent from work despite their reasons. Absenteeism strongly indicates dissatisfaction at work and predicts turnover. The cost of absenteeism can cause a drop in your company’s overall performance and morale of workers. Absenteeism is also used to track employee health and wellness issues.

Retention Rate

The retention rate is the opposite of the turnover rate. Monitoring employee retention rate in your company is an important metric. This is because it informs you on tracking training and making your employees feel valued. To calculate the retention rate, you take the number of employees who remained in your company over time and divide it by the total number of workers.

Employee Satisfaction

Employee satisfaction metric is also crucial to a company. This is as satisfied workers are more engaged and productive. They are dedicated to work for your company and go to the extent of working overtime. To add, satisfied workers would recommend your organization as a good place to work in. Low satisfaction indicates a stressful work environment.

Overtime Expense

Overtime is the period past the normal working hours that an employee spent working. Overtime is expensive and most companies don’t want to pay overtime. If you notice more employees on overtime, it indicates issues on staffing and scheduling your workforce. Excessive overtime also causes an increase in absence rates and turnover. To calculate overtime percentage, you divide the overtime pay amount with the total payment amount.

Effectiveness of HR Software

This HR metric is a complex one. The effectiveness of software is measured in the number of users who are active, the average time user spends on the tool, meeting length, complete client time each month, screen flow, and software maintenance. You use these metrics to figure out which system works for your organization and which doesn’t.     

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