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As a business, you want the employees who work for you to be effective and efficient in their work. As such, it’s important for your companies to focus on the right HR metrics. These HR metrics will help you analyse and solve different issues, as long as your team knows how to interpret them correctly and how to make the most of them.
Analyzing HR metrics will involve deciphering a lot of different numbers and data, which may seem intimidating at first. Fortunately, there are various HR software available that can break down the data in more feasible formats. This allows your company to focus on the metrics that matter most.
Here are the top ten important HR metrics that should matter to companies:
HR Metrics #1: Total time to hire
This HR metric concerns the total time it takes to fill a position, between the moment the position opens and the moment the hired candidate signs a contract. These metrics can allow you to assess the efficiency of the recruitment process of your different departments.
However, don’t assume that a short time to hire is necessarily a good sign. It’s easy to fill a position with anyone, but finding and hiring a great canditate can’t be rushed.
HR Metrics #2: Cost per hire
Your HR team also needs to be able to calcutate how much it costs to hire new employees.
If you know your average cost per hire in each of your departments, you will be able to tell if it’s time to add someone new to your team, or if you should wait for another opportunity because you simply can’t afford to hire someone at the moment.
HR Metrics #3: Employee turnover
Your employee turnover rate is the number of employees who leave your business each year. If this HR metric is low, it means you are doing something right and that your employees enjoy working for you.
However, if your employee turnover is high, you should try to understand why they are leaving, and to figure out what you could do to improve their experience and make them want to stay. When terminating employees, be careful whether you are adhering to employment law guidelines. Otherwise, you may be liable for a wrongful dismissal lawsuit. Always consult the best employment lawyer Toronto to follow the proper procedures.
HR Metrics #4: Early turnover
You need to know how many employees leave each year, but you should also keep an eye on how many employees leave during their first year.
A high early turnover rate could mean that your team is making poor recruitment choices, but it could also simply mean that new employees would need more training to be able to feel perfectly at ease in their new position.
HR Metrics #5: Employee tenure
You also need to know how long, in average, your employees are staying in each of your departments.
This metric is important because it could help you realize that the employees working in a certain department are not happy about their job, or that there is an issue that needs to be fixed. If the numbers are high in each department, it probably means your employees are enjoying working for you.
HR Metrics #6: Absence rate
The absence rate of your employees will tell you how many days your employees have been away from work, either because they were on vacation, taking a sick day, or staying home with no good explanation.
Observing different patterns in absence rates could teach you a lot about your employees, and about the behaviours that could harm or improve the productivity of your team.
HR Metrics #7: Time since last promotion
There are different reasons why an employee could leave. It could be because they feel like they have no opportunities to climb up the ladder.
If you can easily verify how long it has been since each of your employees had a promotion, you will be able to see a possible link between lack of opportunities and turnover and, of course, to do something about it.
HR Metrics #8: Engagement and job satisfaction
Many metrics, if you interpret them in relation to each other, will give you a good idea of the happiness of your employees. If they leave early, and are always taking days off, chances are they don’t really like their job.
Engagement and job satisfaction is an important metric to keep an eye on. Don’t hesitate to simply ask your employees if they are satisfied with their job, and why, or why not.
HR Metrics #9: Revenue per employee
If you divide your total revenue by the number of employees you have, you will get your revenue per employee.
This metric will simply give you an idea of the efficiency and profitability of the team you have assembled, and could give your employees something to be proud of. And, of course, the more revenue each employee generates, the more you should be able to afford to pay them.
HR Metrics #10: Diversity
Finally, diversity is a metric that will show you not only the gender and the different ethnic backgrounds of your employees, but also their diverse skills, education, and social backgrounds.
The more diverse a team is, the easier it will be for them to innovate, to think outside of the box, and to make decisions that will benefit everyone and, of course, benefit the bottom line of your business.
