One of the main goals of a company is to stimulate a leading workforce that drives higher returns. Human Resource metrics are powerful tools to quantify the cost and impact of employee programs. Utilizing metrics can uncover the strengths and weaknesses with the operations, providing insights that can help your business make tactical decisions and achieve stronger results.
The ability to analyze and act on data is increasingly valuable to businesses. Gone are the days when companies can simply post recruiting information online and hope for the best. It is important that companies know how to respond to changes in customer preferences or other environmental conditions in such a competitive global marketplace.
At a glance, HR metrics can seem daunting and complicated – a good approach is to start by examining metrics that directly relate to how you can progress towards certain goals.
Below is a condensed list of important HR metrics to assess and formulate your business strategies:
1. Cost Per Hire – Considering advertising costs, relocation assistance, referral bonus, and recruiter labor, cost per hire is said to be more expensive than a full year’s salary for that same position. Therefore, it is especially crucial to know exactly how much is spent on recruiting. After all, a successful recruiting strategy is dependent not only on the quality of hires, but also the efficiency of the recruiter at finding the candidate.
2. Turnover – If your company has trouble retaining employees for longer than a year, its an obvious clue that something needs to change. Turnover rates reveal issues that exist within specific departments of a company. In addition, the cost of replacing employees on a regular basis can add up quickly.
3. Employee Engagement – Employees happiness is relative to accurately measuring the company’s success. Assessing employee engagement helps the company understand the challenges and frustrations for improvements to be implemented later. It is a simple formula; happier employees lead to more productive results.
4. Performance – This can be easily evaluated based on areas varying from sales performance to manufacturing production, and to customer service productivity. Appraisal and performance reviews are an integral part of continuous employee progress, along with the follow-through to make sure recommendations are going into action.
5. Absence – Tracking absence rates is another way to gauge how productive existing employees are, not in the sense of productivity, but in the amount of time put into the business. Indirectly, how many days your employees are missing can also be an indicator of how satisfied they are at work.
Long story short, metrics matter. Companies constantly try to minimize costs and only through informative, valuable, and interpretable data can that be achieved. It may be difficult to adapt to, but having a strong metrics record will bring about advantages and greater success to your company.