The 6 HR Metrics You Should be Measuring
According to the Society for Human Resource Management (SHRM), “HR metrics are operational measures, addressing how efficient, effective and impactful an organization’s HR practices are.” Human resource metrics allow you to see how your business is performing now and predict how your business will perform in the future. With enough data and the right analyzation of the data, your company can improve its operations for better performance. But, which HR metrics should you be measuring, and why?
Employer Support Services (ESS), provides the six essential HR metrics you need to record and analyze.
When a position opens in your company, it’s ideal for you to know how long on average it will take to fill that position and why. An extended gap in your company’s production team can account for additional stress on your other employees as well as project delays and overtime requirements. However, hiring too quickly can end with a candidate that is not qualified for the position.
Glassdoor reported that the average hiring process in the U.S. is about 23.8 days. Knowing your company’s recruitment time length metric can help you measure the efficiency of the process. From there, you can streamline it to cut down on time or lengthen it to ensure you are finding the best candidates.
Cost per Hire
On average, the cost to replace an employee is 21 percent more than the leaving employee’s salary. From advertising the available position to investing in the proper training for the new employee, knowing the exact costs you incur for each new hire and where they come from can help you develop a more efficient and effective hiring process.
As the average cost-per-hire is so high, knowing your turnover rate metric is crucial for minimizing excess costs. In addition, author Michael Watkins, who was published in Harvard Business Review, said that a new employee “coming into a challenging job from outside the company, may take a year [to add value to the company].” The three driving factors for employee turnover are lack of competitive pay, feeling stagnant in their current position, and having a negative culture. Identifying, analyzing, and correcting turnover rate must be a top priority for companies.
Absenteeism is a predictor metric for turnover. High rates of absenteeism are expensive and can indicate future turnover. Analyzing absenteeism across the company may also give you insight into potential problems within specific departments, or with certain managers or team leads. Sorting out the cause of absenteeism can prevent turnover.
Productivity, or employee performance, can be difficult to analyze, however, it can give you insight into what the general output should be for each employee. Each company will be different in how they measure productivity but most will need to do a blend of analyzing both quantity and quality of output. Quantity is easier to measure and can be as simple as how many sales were completed or units manufactured. Quality is much more difficult to measure but will highlight who is actually producing usable work.
If you need help measuring employee productivity, call Employer Support Services. We can help you build a performance index that tracks productivity in your organization.
Disengaged employees cost companies an estimated $450- $550 billion each year. Measuring your employees’ engagement and increasing employee engagement can ensure your productivity is high. Employee engagement is an important metric to include in your analyzation to know whether you are operating at full potential.
When deciding which HR metrics you should measure, be sure to include the metrics above. With proper analyzation, you can use your data to improve your company’s operations. If you need help measuring your metrics, call Employer Support Services. We’ll help you develop the strategy for measuring the important metrics in your company, analyze them, and make improvements when possible.