19 HR Metrics That Need to Be Implemented in Your Company
An important part of the business strategy, using HR metrics, is the new way to analyse data. Intelligently analysing HR metrics is not just an employer-employee concept, but gives real-time evidence into what is working in the company and what is not while tracking performance.
Human resources is a complicated topic in itself, and HR personnel must constantly update themselves with the latest techniques and models in the recruitment market. An important part of the business strategy, using HR metrics, is the new way to analyse data. Intelligently analysing HR metrics is not just an employer-employee concept, but gives real-time evidence into what is working in the company and what is not while tracking performance.
In layman’s language, they enable the HR executives to measure an employee’s performance and predict future outcomes for the organisation. Thus, one tracks how impactful and efficient the company’s human resources metrics are, which can be used as Key Performance Indicators (KPIs) as well.
What are HR metrics?
Human resources metrics are crucial figures that enable organisations to calculate human capital, which helps manage their company’s HR initiatives. Examples include benefits participation rate, cost-per-hire, turnover and others. Tracking such information helps them decide what to keep, what to exclude and what to expect in the future. HR metrics are divided into three major sectors, which have their set of regulations in turn.
What are the purposes of HR metrics?
Now, human resources metrics are not simply a fancy term for the organisation. It is imperative for both employees and the human resources department alike. Here is how they can benefit your company:
- Helps the agency make well-informed decisions
As per research in the field, organisations that analyse data witness twice or thrice the results in the standards of their hires, employee turnover and leadership process. This is because the HR team makes the effort to examine their findings and devise strategies to improve engaged new hires, compensation process, employee diversity and employee retention. Speaking of diversity, the HR department should promote an inclusive environment regarding gender, age, disability, ethnicity and such composites.
- Measures employee engagement
Analysing HR metrics helps the company strategise employee retention schemes, appreciate their dedication and improve engagement. Companies can acknowledge good work done by the employees, while employees would be updated on their completed assignments through an associate recognition arrangement.
- Optimise recruitment
Organisations can sift through social media, email campaigns and job portals to source good talent, analyse the resumes on their database and use advanced quizzes to measure the skill of their candidates. Analysing the metric helps them determine which channels work for their hiring plan, instead of simply posting job advertisements.
HR metrics based on revenue:
- Engagement rating
Your workforce must be engaged properly to be productive to the company, which can only happen when they enjoy their jobs. Employees who are passionate about the value that they bring to the table perform better, even in a stressful and high-pressure work environment. Also, teamwork remains an important parameter for guaranteed success.
- Revenue per employee
The ‘revenue per employee’ metric indicates the quality of the hired employees, which displays the organisation’s efficiency. The employee’s time to productivity is determined by the days taken for the new hire to reach productivity and dividing the same with the number of open positions filled, which measures the quality of the company’s recruitment and onboarding process, and the kind of applicants attracted to the same.
- Billable hours per employee
Commercially relevant to service-based firms, it could extend to different departments and between different partners as well.
- The 9-box grid
The 9-box grid tracks an individual employee’s potential and performance on three levels — underperformers, potential specialists and top-notch talent — which would help determine the amount of turnover.
- Technological advancement
With the Covid-19 pandemic still prevalent, organisations will experience a digital transformation like never before with workflow automation, productivity applications, intranet and data dashboards. The HR department must have a system to track employee performance, which will help make wise decisions.
- Job planning
The company should be able to accommodate business needs and employee requests, as long as they are acceptable. Unexplained overtime, lost opportunities, workplace stress and idle chat send out warning signals, so keep an eye out for them.
HR metrics in recruitment
- Early turnover (the percentage of employees resigning in their first year)
The ‘early turnover’ metric determines a potential mismatch between the company, employee and their designation. It usually takes a year for an employee to achieve optimum productivity in an organisation, thus early overturn is quite an expensive loss.
If the company focuses on low performers, high performers, critical positions or millennials, the metric tells you about the efficiency in culture initiatives, development and performance management.
- Time to hire (days to hire a new employee)
This one, ‘time to hire’, refers to the number of days between an open position and a candidate accepting the offer, which tracks the effort to fill up certain job positions. You are informed about the organisation’s efficiency in its application process, interviewing procedures, employment brand and marketing effort.
- Prospects of promotion (average number of months since an internal promotion)
This recruiting metric explains why your best employees might leave.
- Cost per hire
The metric explains the cost to hire new employees, tracking the recruitment process’ efficiency. High external costs mean that you should capitalise on internal training, technology and extra team members to market open positions.
HR metrics in development
- Preparation from the perspective of human capital
This metric informs you whether the workforce aligns with the business trajectory or not.
- Average performance rating
The metric ascertains you that performance management schemes are working well, or if one of your teams is not meeting expectations.
- Training participation rate
This metric helps in determining if you have used the right delivery medium, offered adequate training or effectively communicated an opportunity. If the employees do not consider your information efficient, it is time that you started devising new strategies to make your company heard.
- Employee engagement
As calculating employee engagement is difficult, many companies have a third-party agency to hold a survey, which is helpful in stressful job responsibilities. Employees look for a positive work culture, medical facilities, paid leaves, less stress and a healthy work-life balance.
- Pay equity
The HR department must promote a fair and equitable employee compensation without gender and racial discrimination coming into play. Compare employee education, performance, management and experience to ensure that they are paid equally across the spectrum.
Absenteeism is a serious issue that costs a company’s projects, employee’s morale and unmet customer satisfaction. If your company is facing issues due to constantly absent employees, you should check out your workplace policies, management system and employee satisfaction and offer flexibility at work.
Though HR metrics might seem like a great deal of time, effort and planning, it is all worth it. As part of the human resources department, it is your responsibility to bridge the gap between the employees and the company. However, if you are interested in a third-party recruiting metrics system that streamlines HR metrics accurately and with verifiable proof, contact us at OLX People.
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