With a strategic HR management mindset, an organization focuses on the performance of each employee and how it affects the business as a whole. HR metrics can play a key role in advancing the goals and success of your organization. Here are 8 HR metrics that every business should keep track of.
What are HR Metrics?
HR metrics assign value to various aspects of employee performance. These metrics are useful for measuring an organization’s performance overall and for uncovering HR-related issues that can have a major impact on a company’s bottom line. Below are 8 important metrics every organization should consider when measuring its success.
8 HR Metrics & How to Calculate Them
Cost Per Hire
The Cost Per Hire Metric measures how much it costs a company to fill an open job position. This can include advertising, travel & relocation costs, recruiter pay and benefits.
Hiring Expenses / # of Hires
Average Number of Employees
This metric allows you to calculate the average number of employees for your organization for different periods including monthly, quarterly, and annually.
# of Employees at Start of Period + # of Employees at End of Period / 2
HR Expense Factor
The HR Expense Factor allows HR professionals insight into if HR practice expenses are too high compared to the total organization's expense.
Total HR Expenses / Total Operating Expenses
Turnover Rate
Turnover metrics deal with the flow of employees into and out of an organization over a specific period of time and the costs associated with the loss of employees through retirement, terminations, and resignations.
# of Separations / Average # of Employees in Analyzed Period
Attendance Rate
The Attendance Rate monitors the percentage of employees absent from a working period. This can be used to track additional costs, lost revenue, and productivity levels related to attendance. Calculations can be viewed on a weekly, monthly, quarterly, semiannual, or annual basis. Daily or seasonal patterns, such as frequent Monday or Friday absences, may also exist.
Total Days Worked / Total Workdays in Period
PTO Liability
The PTO liability metric gives employers a dollar value of all unused PTO accrued during a period. Other factors that can affect PTO Liability can be pay raises, carryover limits & sabbatical leaves.
Total $ Value of All Paid Leave Accrued by Employees
Revenue Per Employee
This metric calculates the revenue each employee generates for an organization. This ratio is an even distribution across the organization to give a comparison to historical data and other companies within an industry.
Total Organization Revenue / Total # of Employees
Compra-Ratio
This compensation metric helps employers determine if they are appropriately compensating their employees. Compra-ratio reveals how far an employee's wage is from the marketing rate with 100% equal to the market rate.
Employee's Wages / Role's Market Rate
Additional Data to Consider
The Society for Human Resources Management (SHRM) advises organizations to select and define the data that aligns with their business strategy. In addition to the 8 key metrics provided above your HR team should research additional areas of data to expand upon.
- Employee Engagement
- Training & Development
- Employee Value & Performance
Using the CARE criteria: Consistent, Accurate, Reliable & Efficient when collecting data will ensure optimal results. An HR/HCM system is a great tool to manage, collect and store all of your organization's data. With TruPay's Inspire HCM platform HR Professionals can capture the entire employee lifecycle and manage all the data and metrics in one system.
Learn more about how to Engage, Optimize, and Transform Your Workforce with TruPay's Human Resource Solutions.
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