HR Metrics

This shows HR metrics, employers use. Other metrics include, for example, health care costs per employee, human capital Return on investment, turnover costs, and workers’ compensation cost per employee, among many offers.

Compare your metrics against other organizations’ metrics, survey data, and so on, to evaluate your performance. Metrics can show the benefit of your HR practices and their contribution to your organization’s profits and strategic aims.

HR Metric:

Absence rate: (# Days absent in month)

(Average #of employees during month) x ( # of workdays)] X 100

Measures absenteeism: See BNA Job Absence Report for benchmark and survey data. Determine if your company has an absenteeism problem.

Analyze why and how to address the issue. Analyze further for effectiveness of attendance policy.

Cost per hire:

(Advertising + agency fees + employee referrals + travel cost of applicants and staff + relocation costs + recruiter pay and benefits) ÷ number of hires

Costs involved with a new hire. Use BNA / cost per Hire. Staffing Metrics Survey as a measurement to show any substantial improvements to savings in recruitment / retention costs. Determine what your recruiting function can do to increase savings / reduce costs, and so on.

HR expenses factor:

HR expenses ÷ total operating expense.

HR expenses in relation to the total operating expenses of organization. Determine if expenditures exceeded, met, or fell below budget. Analyze HR practices that contributed to savings, if any. See SHRM BNA surveys No 66: Human Resource activities, Budgets & Staffs.

Time to fill:

Total days elapsed to fill requisitions ÷ number hired

Number of days from which job requisition was approved to new hire start date. How efficient / productive is recruiting function? This is also a process measurement. See BNA / Cost per Hire Staffing Metrics survey for more information.

Turnover rate:

[# of separation during month ÷ average # of employees during month] X 100

This measures the rate for which employees leave a company. Calculate and compare metric to national average using Bureau of National affairs BNA Turnover Report or Is there a trend? Has metric increased / decreased? Analyze what has caused increase / decrease to metric. Determine what organization can do to improve retention efforts.

HR Scorecard: Measures the HR function’s effectiveness and efficiency in producing employee behaviors needed to achieve the company’s strategic goals.

Managing with the HR Scorecard Process:

Managers can link such metrics or measurements together to provide a more meaningful picture. For example, (for Signicast): testing 100% of applicant using new selection test
>>> improved average employee performance on automated machines
>>> higher plant productivity
>>> Signicast achieving its strategic profitability goals.

For most human resource management activities, one can similarly map out the cause and effect links, from the human resource activity, to the employee behavior, to the company performance. For example, (for a hotel): increased use of incentive plans >>> improved hotel employee customer service ratings
>>> more satisfied hotel guests
>>> improved hotel profits

Managers often use an HR Scorecard Process to consolidate linked metrics like these and present them on a “digital dashboard” computer screen, to easily visualize and measure the HR function’s effectiveness in producing the employee behaviors required to achieve the company’s goals. The HR Scorecard is a concise measurement system. It shows the metrics the firm uses to measure HR activities (such as testing, training, compensation and safety) and to measure the employee behaviors resulting from these activities, and to measure the strategically relevant organizational outcomes of those employee behaviors (such as higher plant performance, and company profits) The dashboard based scorecard shows the causal links between the HR activities, the emergent employee behaviors, and the resulting firm wide strategic outcomes and performance.