Organizations invest their valuable time and money in hiring the best talent and ensuring their growth and learning while the employee stays associated with the company. By putting in the valuable investments, the organization’s ultimate goal is to have positive revenue growth and increased brand value.
HR metrics are the key figures that help organizations to derive and analyze, and track the human capital to keep a check on the effectiveness of the processes. Data is pulled to check the turnover rate, cost per hire, absenteeism, etc. This data can provide you details about what people’s strategies are working well for the company and the strategies that need improvement.
The important HR metrics are not limited to headcounts and analyzing the turnover rates. There are numerous angles from which the data can be analyzed. Let us look at some of the common metrics that organizations look at to get the insight required to grow and succeed.
- Recruitment: Investing in the right talent is a time-consuming process that involves cost. Thus the data should be analyzed considering the following parameters-
- The total headcount of the organization and sub-divided department-wise.
- The diversity of the employee base in terms of age groups, gender ratio, education levels, experience, and length of service.
- Time is taken to close a position from posting the job till the employee onboarding.
- The offer acceptance ratio is against the number of offers released.
- The cost incurred to hire the employees can be aligned with department costs.
- Turnover tenure to check the average time an employee spends within a set time period.
- Retention: The cost of replacement is more than double the cost of hiring. HR metrics can help understand the data in the following format:
- The turnover rate speaks a lot about the company culture and the value of the talent. Lower the turnover, better the culture.
- Segregating and getting in-depth analysis from various perspectives like department-wise turnover, voluntary turnover, talent turnover, will let you know the pain areas.
- Retention rate also can be considered process-wise and manager wise providing you an idea about the departments that are doing good and the managers who need improvement in people management skills.
- Absenteeism: Unscheduled absenteeism affects the productivity and delivery of every service.
- The average number of employees present to the number of full-time employees is termed absenteeism.
- This can again be broken down manager-wise and team-wise. This will help you analyze the manager’s behavior towards the team members.
- Finding out the number of hours of overtime that costs higher to the organization.
- Higher absenteeism is the first sign of employees being unhappy and losing interest in work.
- Training & Development: Employee growth cannot be associated with monetary benefits only. Employees look for a growth path within the organization that provides him/her the confidence of being valued employees.
- Finding out the training and development cost per employee can be linked to the growth of the employee.
- With the shift from classroom training to online training, analyzing the completion rate of the courses. This provides an insight into the quality and utility of the course.
- By running assessments, surveys, delayed surveys provide you with training effectiveness as this contributes to the growth in revenue and assessing the ROI on training.
- Employee value & performance: Performance metrics help to assess the employees that lead to defining the growth path and the learning path for the employees.
- Calculating revenue per employee provides you an idea if the employees are underutilized or optimal.
- Analyzing the potential of the employee through HR performance management software can help in defining the continuous learning path by providing growth opportunities within the organization.
- The HR performance management software also helps in tracking and maintaining the goal sheets that connect the employee’s goals with the company goals.
- This will also provide the analysis of how well the company is performing to how engaged and valued the employee feels.
Conclusion: You might end up implementing a number of policies and strategies to build a good culture in the organization. Unless not measured, no concrete results can be drawn. HR metrics are the means to measure these efforts that will positively influence the positive employee culture increasing the retention rates.