Most company leaders want to know the health of the organization and its employees. HR metrics can help to provide the insights on organizational health and performance. HR metrics should answer the question – how healthy or unhealthy is the company now and moving forward.
Identifying the HR metrics is specific to a company. However, there a recommended HR measures that you can use to form the core of your HR metrics and tune to your specific environment.
Below are the list of HR measures you can use and track regularly. Enjoy.
- Time to Hire: The average number of days between when a job is posted and when a candidate accepts your offer.
- Cost per Hire: The average cost of hiring a new employee. You can generate this number by adding up both internal and external hiring costs then dividing that total by the number of employees you hired in a given period
- New-Hire Turnover: The number of new hires who leave within a set period of time, such as within their first year of employment
Engagement & Retention
- Employee Satisfaction: The number of employees who would recommend your company as a good place to work versus the number of employees who wouldn’t, indicating overall employee satisfaction.
- Total Turnover Rate: The number of employees who leave your organization within a given period of time divided by the average number of total employees (then multiplied by 100 to come up with a percentage).
- Talent Turnover Rate: The rate of turnover among your organization’s high-performing and high-potential employees.
- Retention Rate: The opposite of your turnover rate in that you divide the number of employees who remained in your organization over a given period by the number of total employees
- Retention Rate per Manager: The retention rate broken down by individual teams and managers.
Employee Value & Performance
- Revenue per Employee: The total gross revenue divided by the total number of employees for a specified period.
- Performance & Potential: Internal set of measures that allows you to categorize employees according to their performance and potential levels for better succession and leadership planning.
- Employee Performance: You can track employee performance through self-assessments, peer reviews, manager assessments, or a combination of all three. It is recommend that you tie performance with achievement of goals and demonstrated values.
- Goal Tracking: If your performance management software includes goal tracking, you can see the goals employees have set, how these goals connect to larger company goals, and the progress employees have made.
- Company Performance: A high-level comparison of how well employees are performing versus how engaged and valued they feel.
- Readiness (for key roles): How ready the organization is from a human capital perspective to execute the business strategy. Readiness is calculated by taking the total number of vacant positions divided by the total number of approved positions and then multiplying that number by the total number of employees with desired competency ratings divided by the total number of employees who have received a competency assessment. Then multiplying the answer by 100. Let me simplify: (Vacant Positions/Total Positions) x (Employees With Desired Competency Rating/Total Assessed) x 100.
HR Service & Software
- Ratio of HR Professionals to Employees: The number of employees in your organization per HR professional on your team.
- Cost of HR per Employee: The total amount your organization spends on HR functions divided by the total number of employees.
- ROI of HR Software: There are several factors that contribute to the ROI of your HR software, but the core formula is the difference between how much the software costs your organization and how much money it generates or saves your organization.
How to Use HR Metrics
All of this data is important, but if you want HR metrics to have a real impact on your organization, then SHRM recommends keeping these four tips in mind in their Advanced Analytics: Using Data to Drive HR Excellence report.
- Analyze your data and draw conclusions from it. As SHRM’s report explains, “It is the insight that produces value, not the metric itself.”
- SHRM reminds us that the main purpose of HR metrics is to help your organization make better, more informed decisions.
- Identify the right audience for each HR metric. Not every figure is going to be equally useful for every team.
- Your organization must determine its own goals and targets. Your organization should have a goal for each metric that clearly relates to your organization’s overall success.
How are you tracking HR metrics?
Effective HR software can handle the tedious work of HR metrics, so you can focus on using them to grow your business. CARROTS’s Employee Experience Platform offers a dashboard of health metrics for your company to track, including tracking goal-setting completion rate (monthly, quarterly and yearly), top 10% performing employees, and the cost of rewards — CARROTS has it all.