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HR-Analytics’ 10 Must-Know Metrics

You can't improve what you can't measure – find out the best-rated HR metrics you should start using!

By | Arthur Rowley

Human resources are beginning to get the respect they deserve after statistically proving that the metrics they provide can be used to grow your business smartly. 

After spending many years being ignored by most entrepreneurs, HR and everything it stands for is seeing a spectacular rise in recent years. Finally, business owners understood that you can’t run a successful business without a strong HR department. So, no matter you’re designing solar panels or developing Tizona, the metrics never lie, and you are about to find out why. 

HR Metrics – What Are They?

The best place to start is defining HR metrics to ensure we are on the same page here. They are carefully chosen vital figures meant to help you better track your business’ human capital and help keep you in the loop about the human resources project and initiatives.

By always measuring these key factors, you’re able to make intelligent decisions in a live environment and know what to expect from the future trends in your HR department. Now that we know what to expect, let’s gradually explore some of the most critical metrics by categories.

1. Engagement

Employee Satisfaction – This is where you find out how many of your employees will recommend your business as being great to work at, versus how many wouldn’t recommend it. This will indicate the level of employee satisfaction.

Total Turnover Rate – The total sum of employees who resign from your company within a certain time frame divided by your average number of employees in that same period. Multiply that by 100, and you got yourself the percentage.

Voluntary Turnover Rate: This represents the turnover rate if you count only those that voluntarily left your organization.

Talent Turnover Rate: It helps you calculate the turnover specifically for your top performers and those with high potential.

2. Retention

Retention Rate – At the opposite pole of the turnover rate, for finding out the retention rate, you will divide the number of employees that didn’t leave your organization by the total number of employees.

Retention Rate per Manager – Take the retention rate and break it down by managers and individual teams.

3. Time Tracking

Absence Rate – An essential tool for HR to keep your eye on, the absence rate is how many days employees are absent from work in a specific timeframe. This, of course, excluding those with medical proof.

Absence Rate per Manager: Take the absence rate and break it down by individual managers and teams to have a better overview of your manager’s performance

Overtime Hours – How many overtime hours have been worked by your employees in a certain timeframe. You can even break this on an individual level, or you can go for the average number.

4. Performance 

Revenue per Employee – All your organization’s income is divided by the overall number of employees.

Potential&Performance – A matrix that helps you split the member of your HR team into personalized categories, judging by their performance and leadership skills required to take over a possible leading position.

Employee Performance – Use self-assessments, manager assessments, peer reviews, or all three combined to better track your employee’s performance. An important aspect that your HR staff should keep a close eye on.

5. Employee Value

Tracking Goals – Make sure that the performance measuring software tool for HR that you are using has a goal tracking feature. This way, you can better understand the big picture, as you will be able to connect your team’s goals with larger organizational goals.

Company Overall Performance – How well are the employees performing against how valued and engaged they feel.

6. Training & Development

Training Expenses per Employee: represents the total sum of investments poured into your business’ training programs and courses, which is divided by the number of employees you have overall.

Training Completion Rate: Take the total number of employees who finished a certain training and divide it by the number of employees you have overall. Take the answer, multiply it by 100, and you will have your precious percentage.

Time to Completion – How much time does an employee need, on average, to complete a specific training course/program.

Training Effectiveness: On this topic, you will find several effective methods that are used to measure the effectiveness of training. These include organizing assessments or tests.

7. HR Service & Software

Ratio of HR Professionals to Employees – This one is pretty self-explanatory, it’s the overall number of employees per HR professional from your team.

The cost of HR per employee – How much your organization is spending on the Human Resources functions divided by how many employees you have.

HR Software Employee Participation Rate – Take the number of employees that are actively using the HR software you provided, divide that by the overall number of employees, multiply it by 100, and you will get that sweet percentage.

Return of Investment of HR Software – Although several essential factors will contribute to the return of your investment, the core is to check how big the difference is between what you have spent on the software and how much it is actually generating.

8. Retention Risk Index

While it may require some predictive modeling, it can work pretty well if you’re using only the basic models, such as a decision tree or a logistic regression. What you need to do is:

  • Generate the probability of an employee leaving the company, for each of them
  • Take this list and sort it in descending order
  • Focus on the top 10% performers from your list, and develop career plans together with them

9. The Percentage of Met Performance Goals 

Take time and study how the goals you’re setting for your team are performing. It’s important to take enough time when setting goals and make sure they can be realistically reached. Try to prioritize the ones that can be finished year on year, and then carefully consider your metrics.

10. Diversity

It may sound simple, but you would be surprised by how many organizations forget to also diversify. Take a moment, step back, and watch it from a wider angle – a company that possesses a diversity of education, skills, social and ethnic background, will also benefit from better innovation, decision-making, and creativity.

Conclusion

The work that we put in human resources has been proven to be an essential factor in any business’ success. For this, it’s important to do it wise and measured by tracking the appropriate metrics and pinpointing the parts that need improvement. What is your favorite metric to follow, and how has it impacted your business? Feel free to share your thoughts and experiences with us in the comment section. 


Author Bio:

Arthur Rowley is an avid writer specializing mostly in technology and marketing. Having spent years finessing his craft, he now can ensure you that Arthur has much acclaim for these areas and dedication to providing high-quality blogging content.

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