Human resource metrics are the same as performance metrics.  It is vital for the human resource department to have quantifiable targets as well as items associated with production costs under their watch (Belcourt et al., 2016).  These items are human resource metrics. Human resource metrics are indicators that allow the human resource department to track as well as measure performance on various aspects that can eventually be used for future forecasting.  The typical human resource metrics for a mid-size business include time to hire, Employee turnover, cost per hire, absenteeism, average to fill, career path ratio, human resource-to-employee ratio,revenue per employee, employee net promoter score, Employee Engagement, profit per employee and Total Overtime Cost.

Time to Hire

Time to hire is the average amount of time that it takes to hire a new worker, from the job posting period and the time of job offer acceptance (Howden, 2018). It can be calculated by summing the total time for each hire and dividing the result by the total number of new hires in a specific period.  Time to hire is a recruiting metrics that tell the business about its hiring process as well as recruiting team. Tracking time to hire metrics allow the company to know the duration it takes to notice the right candidate, the pace in which the organization move when the right employee is found, and the sources of blockades in the hiring process (Howden, 2018).

Average Time to Fill

It is given by a total number of roles’ time to fill divided by the total number of openings filled.  Understanding the duration, it takes to fill a given vacancy can assist the human resource department to measure the efficiency of its recruiting process (Howden, 2018).

Employee Turnover Rate

It looks at the total number of workers who exit in a given period with roles that the organization plans to replace (Zwilling, 2019).  Employee turnover rate is calculated by first finding the average number of workers in a company in a specific period, which is given by adding up the number of workers at the start of the period to the number of workers at the end of the period then diving the result by two. The number of workers that exited the company over this period is then divided by the average number of workers, and the result is multiplied by 100 to give employee turnover rate.  Turnover is a critical Human resource metric as it can inform the company whether its workforce is functional or dysfunctional. High turnover implies the company has to spend more on training employees and this may prove costly to the firm.  Voluntary high turnover is related to management or compensation issue while high involuntary turnover implies the company is hiring wrong individuals (Zwilling, 2019).

CostPer Hire

It is a key and most commonly employed hiring and recruiting metric. Cost per higher is associated with recruiting talent, and it is the total outflow of hiring a new worker to the organization. It includes the cost of recruitment travel costs, process, benefits, administrative costs, and equipment.  Cost per hire metric often applies to transfers or internal promotion within a company and new external hires (Neelie, 2019). The cost per hire is based on the organization size, the vacant position seniority as well as the efficiency and strength of in-house recruiting. Two steps are often used in the calculation of cost per hire metric. It includes firstly summing all hiring cost both external and internal then dividing the result with the total number of hire in a given period. The formula for finding this metric is given by:

Absenteeism Rate

Absenteeism is a strong dissatisfaction indicator as well as a turnover predictor. The metric can prove useful information to prevent this type of leave since long-term absence is costly.  The unscheduled rate of absenteeism, which is given by  full-time employees is an essential Human resource metrics for mid-size business to measure absenteeism. It tracks the number of employees (in percentage) who are absent in a given time. Besides, the metric offers a benchmark over time(Neelie, 2019). The level of absenteeism can vary from one month to another, but over more extended periods, the company wishes to have relatively stable and low rates. Increasing rates of absenteeism could be an indicator of a worsening work environment, flu epidemic or increased stress.  1%-2% rate of absenteeism is normal since nearly everyone can fall sick few times a year.

Career Path Ratio

In addition to acquiring new great talent, it is essential to develop as well as grow existing workers. As workers internally move around—whether up a level through promotion or crosswise to a different department—Human resource need to measure changes the structure of the business(Hopkins, 2019). Career path ration metric is instrumental in understanding the business or organization structure, identifying potential and existing gaps as well as supplementing the planning effort of the strategic workforce (Team, 2017). This human resource metric shows how employees are moving within the company allowing the human resource to project out as well as maintain the promotions pace.  Career path ratio is calculated by dividing the total number of ascensions by the total movements (expansions + ascensions). It shows the total number of upward movement within an organization, and whether the business is getting extremely top-heavy (Team, 2017).

Top Performer Retention

Retaining top and highly skilled and talented workers is important. You wish workers to grow as well as carry on adding value gradually.  Top performer retention, as opposed to turnover rate, shifts the focus from employees exiting to workers staying (Hopkins, 2019). This metric aid informs a range of human resource functions, from employee development to workforce planning. The top performer should always be higher than or equal to overall worker retention. Once the company benchmark is established, specific goals should be set and managers equipped with details about these standards. Calculating the rate of top performer retention involves looking at the total of top performers retained at the end of a given period over the total performers at the beginning of a given period.  The outcome is finally multiplied by 100 to provide the rate. The computation excludes fresh hires within that period to give pure retention rate (Team, 2017).

Human Resource-To-Employee Ratio

The metric varies by necessity throughout the lifespan of accompanying since the needs of businesses vary based on their sizes. For instance, small companies might use what appears like an unbalanced number of recruiters for growth facilitation. Contra wise, while business with more than 1000 workers have large individual teams in paper, the human resource to employee ratio is usually small since such firms are more probable to have efficiencies such as all-inclusive technology in place, and can handle human resource administration for a more significant number of workers easily with little strain if any.  The human resource-to-employee ratio is calculated by dividing the headcount of the human resource team by the total number of full-time workers of the company and multiplying the outcome by 100. That is:

If this ratio is notably higher than the national average, it could just imply, the company is in a hiring sprint and require additional hands on deck (Hopkins, 2019). For organizations in which that is not the situation, it may mean that their team is either technological underserved or overspecialized.A low ratio implies few Human resource professionals, and this can result in system performance and cultural nightmares (Hopkins, 2019).

Revenue per Employee

Revenue per employee metric represents the amount of income each work account for. It is computed by diving the yearly revenue of the company by the number of full-time workers.

Quintessentially, this metric measures output. The top management usually relies on the metric since it described overall efficiency and can help establish whether a business is understaffed or overstaffed. Except for a massive hiring push case, the company revenue per worker should gradually increase (Hopkins, 2019).

Employee Net Promoter Score

This metric help empowers the organization team to find out something subjective such as how people feel about their work.  The metric was conceived by Fred Reichheld, a business strategist as a method for organizations to measure the satisfaction of customers. The Employee Net Promoter Score surveys ask participants a single main question:  “what is the probability that you would recommend so and so to a college or friend?” Respondents were requested to measure their approval on a 0-10 scale (Hopkins, 2019). Promoters are those that respond with a scale of 10 or 9 while detractors are those that respond with a scale between 0 and 6. Any individual who gives a rating of 7-8 is perceived passive. The overall score is computed by deducting detractors’ percentage from promoters’ percentage.  While this metric has been in existence for over ten years, the human resource team embraced it just recently. Employee Net Promoter Score is measured by surveying workers on a quarterly or monthly basis using an improved Reicheld’s simple question version (Hopkins, 2019).  Then the following formula is employed to find the metric:

Score often ranges from 100 to an extreme worst case of -100. Since the metric narrow a promoter definition, low scores are still considered favorable. For instance, employee net promoter score of 50 is considered great while anything between 10 and 30 is good and anything below 0 is an indication of serious trouble (Zwilling, 2019).

Employee Engagement

A workforce that is engaged is ever productive. Engagement is probably the most critical ‘soft’ human resource outcome (Mitrefinch. 2019). Individuals who love their job as well as who are proud of their organization are usually more engaged, even if they work in an environment with intense pressure and stress. Committed workers perform better and are most likely to recognize stress positively and not negatively. Besides, team engagement is a crucial metric for the success of a team (Boyd &Gessner, 2013).

Workers engagement is among the most challenging metric to calculate because financial records cannot be employed to compute it (Mitrefinch. 2019).  Company survey can be employed to calculate it by asking the employee to rate their experience with the company on a scale of 0-5.  The outcome is then averaged to find the rate of employee engagement.  Greater engagement implies that employees are adequately satisfied (Schneider, 2019).

References

Belcourt, M., Bohlander, G. W., Snell, S., Singh, P., & Morris, S. (2016). Managing human resources. Vancouver, B.C.:Langara College.

Boyd, N., &Gessner, B. (2013). Human resource performance metrics: methods and processes that demonstrate you care. Cross-Cultural Management: An International Journal, 20(2), 251-273. doi: 10.1108/13527601311313508.

Hopkins, C. (2019). Top 25 HR Metrics – How to Measure HR Success. Retrieved from https://fitsmallbusiness.com/hr-metrics/.

Howden, D. (2018). Time to hire: Recruiting metrics you should be tracking. Retrieved from https://resources.workable.com/blog/time-to-hire-metrics

Mitrefinch. (2019). 25 HR Metrics to Facilitate Sustainable Business Operations. Retrieved from https://mitrefinch.com/blog/important-hr-metrics/.

Neelie. (2019). Time To Hire – Everything You Need To Know – Harver. Retrieved from https://harver.com/blog/time-to-hire/

Schneider, M. (2019). 11 Essential HR Metrics That Every Organization Should Know. Retrieved from https://www.inc.com/michael-schneider/11-essential-hr-metrics-that-every-organization-should-know.html

Team, N. (2017). 3 HR Talent Metrics You Should Start Tracking Today. Retrieved from https://blog.namely.com/blog/3-hr-talent-metrics-you-should-start-tracking-today.

Zwilling, M. (2019). 10 Metrics Every Growing Business Must Keep An Eye On. Retrieved from https://www.forbes.com/sites/martinzwilling/2011/09/28/10-metrics-every-growing-business-must-keep-an-eye-on/#4f767bb761b9

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