Organizations need to keep track of various HR metrics to help drive more effective policies and practices. However, keeping track of every metric usually takes up too much time and resources.
That's why it's crucial to pinpoint key HR metrics and concentrate your energies and efforts around tracking these metrics. Below, we have pinpointed nine need-to-track metrics to help you get started.
This is one of the most crucial metrics that should never be missing from your HR metrics dashboard. Chances are, you're already familiar with the concept that time is money, so tracking time will help you establish if employees are using their time productively and optimally, as this can have a huge impact on the business's bottom line.
The easiest and most efficient method for time tracking is using a time tracking app that helps you effectively manage how employees are spending their time. For instance, you can use the time tracking app to measure key metrics like the absence rate and overtime hours.
The absence rate will alert you to any rampant absenteeism that needs to be addressed. The absence rate per manager is another key metric that lets you know if the absenteeism is directly related to management or another underlying cause.
Similarly, overtime percentage will show whether there's a human resources issue that needs to be addressed. For instance, if employees log excessive overtime, you may need to hire additional staff or provide training to ensure smoother and more efficient operations.
There are many HR metrics that fall under recruitment, but as long as you use the right HR metrics formulas, you shouldn't have a problem keeping track of them. First, you'll need to track the average time to hire new personnel to ensure better time management.
Generally, the time to hire should be as short as possible while still maintaining quality hires. Related to this is the cost per hire, which shows how much the organization spends in filling a vacant position.
The cost per hire should factor in expenses spent on filling the role, including staff agencies and paid job postings. Knowing the cost per hire comes in handy when evaluating revenue per employee, as this helps you determine how profitable a new hire is.
Other recruitment metrics to keep an eye on include workforce headcount, acceptance rate, time to full productivity, and new hire turnover.
Employee Satisfaction and Retention
Employee satisfaction and retention are two of the most key metrics that can affect employee productivity and profitability. Evaluating employee satisfaction and retention accurately requires that you develop several smaller metrics, including employee engagement, voluntary turnover rate, talent turnover rate, total turnover rate, retention rate, and retention rate per manager.
Measuring different turnover metrics will help you understand why employees leave a company and the strategies you can implement to encourage your best employees not to leave. This will help you improve employee retention and satisfaction in the long run.
Employee engagement is also closely tied with employee satisfaction. It can easily be measured with a survey that seeks to determine the percentage of employees willing to refer potential employees because they view the company as a good place to work.
Employee productivity has always been a key metric that HR needs to keep an eye on since it impacts the company's bottom line directly. You can calculate employee productivity by measuring employee performance against goals set within a specific period.
Knowing how productive employees are at all times will alert you to any sudden signs of underperformance. This will help you uncover issues affecting productivity to provide the support employees need.
Another way to gauge employee productivity is to consider revenue per employee, which looks at whether the number of employees you have matches your output.
You can also take a closer look at employee performance using various tools, such as self-assessment surveys, performance reviews by managers, and the use of a time tracking app that enables you to track how well goals are being achieved.
Today, every company should have diversity and inclusion goals and a way to measure those goals to see progress. It's essential to measure HR metrics company wide before evaluating the data so you can make fully informed decisions that produce better results.
Tracking workforce diversity gives you a better idea of how healthy your work culture is in terms of attracting and retaining a divorce workforce. You can measure workforce diversity in various ways, starting with ethnicity, demographics, gender, and disability.
To ensure you're working with accurate data, you should rope in employees and ask their opinions via surveys. For instance, you can send out surveys that ask employers to share their opinions on how diverse and inclusive the company culture is. You should also ask for feedback to help build a more equitable and inclusive work culture.
Striving for diversity and inclusion will go a long way towards creating the right brand image that attracts more customers. That's because diversity and inclusion is something that today's society strongly advocates for, so tracking this metric will help you achieve a positive diversity rate with employees and management from all types of backgrounds and identities.
Besides striving for more workforce diversity and inclusion, promoting pay equity is also an essential part of building a balanced work environment. Sometimes you may find that a company has an impressively diverse workforce, but this is all spoilt by the fact that some groups are more financially favored than others. A truly diverse workforce should have compensation policies that are fair and which apply to all the different groups within the company.
Failure to track pay equity can leave the company vulnerable to lawsuits on the grounds of discrimination. So your company can't afford to have an unfair pay policy where two team members occupying similar roles and with similar responsibilities receive compensation that shows a huge discrepancy.
Taking corrective action as soon as possible also helps lower employee turnover rates and boosts employee satisfaction and retention. In a nutshell, you should set up fair equity standards to ensure that employees are paid according to their qualifications, education, performance, and experience levels, not based on their skin color or gender.
Training And Development
When tracking HR metrics related to training and development, you're looking to calculate training costs and the effectiveness of that training. So, in essence, you're looking at whether the training expenses the company is paying off have a worthwhile ROI. Otherwise, you can continue wasting monetary resources and still fail to achieve desired results.
Training costs are easy to track since you keep records of how much you spend in this department. When assessing the effectiveness of the training, you can simply measure how much your employees have learned and how their performance has improved as a direct result of that training.
Measuring the effectiveness of employee training will let you know when it's time to switch training methods. Overall, calculating metrics like training completion rate, time to completion, training effectiveness, and training costs per employee helps improve the cost-effectiveness of company operations.
It also improves employee satisfaction if the company provides the right support that aligns with employees' career goals.
Healthcare cost per employee
Healthcare costs per employee is another important metric that is often overlooked. It's important to track this metric because it's part of the benefits package that employees should offer to attract high-caliber candidates.
Healthcare costs per employee are something that most employees are interested in, given the high costs of healthcare in the US. Fortunately, tracking this metric is simple since all you have to do is divide the total healthcare costs by the number of covered employees.
Suppose your company is interested in attracting high-quality candidates, lowering turnover, and boosting retention. In that case, you should make every effort to increase healthcare costs per employee while keeping things cost-effective. This creates a win-win situation for you and your employees.
Effectiveness of HR Service And Software
As with other metrics, there are various measurements you can take to determine the effectiveness of the HR service you provide and the HR software you use. Some HR metrics examples to consider include the ratio of HR professionals to employees and the cost of HR per employee.
These metrics will help you assess if there are enough HR professionals to adequately help the number of employees in your organization. They will also help you assess if HR costs are cost-effective in relation to the number of employees.
When it comes to tracking HR software metrics, calculating HR software employee participation rate and ROI of HR software will help to verify if the software is worth the cost.
The Final Word on Tracking HR Metrics
These are the key HR metrics that should be a common feature of your HR metrics dashboard. Admittedly, there are a lot of calculations to keep track of, which is why you should download an HR metrics pdf that will help you verify that all metrics are accurate.
These HR metrics matter because they help the company develop the right strategy that impacts the organization positively. Remember that your organization can only improve by first tracking and measuring the right metrics.