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Top 10 HR Metrics and How to Measure Them

Posted on April 12, 2016 7:59 am;

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For too long a time now, the Human Resources department has received criticism for being a cost

center. If you belong to the HR team, then you are all too familiar with the way management in many

companies see most of the work you do as a drain on the profits. But this seeming problem is more of a

perception issue than a reality.

 

To turn this perception around, HR professionals need to continually show the department’s

effectiveness and contribution to the company through solid, measurable metrics. Aside from validating

the existence of your department, metrics also help assess business strategies and provide data that can

be of great aid in decision-making process.

 

Here are 10 of the most basic HR metrics and how they can be measured.

 

1. Cost per hire: Recruitment costs/Cost of compensation + Cost of benefits

2. Yield ratio: Percentage of applicants that make it to the next stage of the application process.

3. Benefit cost per employee: Total cost of employee benefits/Total number of employees

4. Compensation cost per employee: Total cost of compensation for the year/Average number of

employees

5. Training hours: Total training hours/Total number of employees

6. Revenue per employee: Revenue/Total number of employees

7. Rate of performance goals met: Number of performance goals met/Total number of

performance goals

8. Tenure: Average number of years in service of all employees

9. Absence rate: Number of days absent (month)/Average number of employees (month) x

number of workdays

10. Annual turnover: Number of employees leaving during a 12-month period/Average number of

employees during the same period

 

While it is true that HR does not directly generate revenue, your department is critical to the existence

and the efficient and effective functioning of your organization. From the hiring, training and firing of

employees, to compliance, employee satisfaction and other business functions, your team does all the

legwork. By using HR metrics, you can measure the work you do and glean insights about how to

improve your organization.

 

Want to better understand the key metrics of HR and how to align them with the overall company

strategy? Take a look at our upcoming workshops calendar for the next Metrics and Analysis of HR

Workshop or contact us for your customized proposal.

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