My team has recently been defining metrics for a project. Eager to get started, I jumped right into Google Analytics. I was met with so many filters, views, charts, and more filters. I realized the best way to understand the data was to stop looking at the numbers and get clear on our objectives. It’s similar for HR. Data can be foreign and intimidating for a lot of us, but knowing how to interpret certain HR metrics can be powerful for your organization.
The power of human capital metrics, especially when combined with metrics from other departments, can bring insights to support your next decision or help you become a key influencer.
To see the power of metrics in action, here are 4 common HR objectives followed by a metric you can calculate and use in your decision-making process:
1. We are bringing employees in, but we are not keeping them.
Metric: Find out your Employee Turnover Rate. This rate refers to the percentage of employees who leave during a certain timeframe.
Divide employees who have left by the number of total employees and multiply by 100.
Above 35% should prompt you to make improvements because this indicates the success rate for new hires is low. If you find employees leaving after one year, consider looking at your culture. If they leave within a couple months, the onboarding process may need improvement. Knowing how many employees left the company can also tell you how well hiring managers match candidates to their position.
2. How much will it cost the company to bring on 10 new team members?
Metric: Calculate your Cost Per Hire.
The cost per hire is the total cost that went into hiring an individual divided by the total number of hires in a specific time period.
Understanding this number can be instrumental in making strategic decisions. High cost per hire will be a red flag to improve your cost-effectiveness and efficiency of your recruiting process while low cost per hire will get a high five from your CFO.
3. We need more hires and/or resources to find candidates!
Metric: Find out your Recruitment Cost. This is your internal and external costs associated with the recruitment process that are used to calculate your costs to hire.
Knowing your recruitment cost can help support your case for that new human resources management platform that you need. Going through the process of finding out this metric can also help you know where you can cut unnecessary expenses.
4. I want to implement an employee assistance program (EAP).
Metric: Find out the number of Employee Absences.
How much did employees miss work due to illness last year? If you don’t have the means to track this number, either through your applicant tracking system or manually, send out an anonymous survey to ask your employees how often they missed work due to illness. If this percentage is high, it can reinforce why an EAP program is worth the investment.
Remember, focus on defining what you’re trying to solve and tackle the numbers from there. You may be surprised how the data speaks for itself and informs your HR practices!