Professional Documents
Culture Documents
HR metrics
The most widely used HR metrics are typically concerned with employee attitudes,
employee turnover, employee skill levels, as well as outsourcing costs, service center
operations, the number HR transactions processed, staffing process, training programs
utilization and effectiveness, and promotions. These measurements are employed by 25
to 75% of all business organizations. Following are details of the popular metrics and the
performance indicators.
“Employee turnover” metric generally include such indicators, as Cost per Hire
(calculation of advertising, agency fees, employee referrals, relocation, recruiter pay and
benefits costs and the number of hires), Turnover Cost (calculation of termination, new
hire, vacancy and learning curve costs), Turnover Rate (rate of the employees leaving an
organization), Time to Fill (the period from job requisition approval to new hire start
date), Length of Employment (this indicator considers the job title, department, etc.).
“Recruiting” metric includes Vacant Period (number of overall days the positions were
vacant), New Hires Performance Appraisal (average performance appraisal of new hires,
compared to previous period), Manager Satisfaction (according to the survey of hiring
managers, compared to previous period), Turnover Rates of New Hires (during a
specified period), Financial Impact of Bad Hire (according to turnover cost and cost per
hire).
“Retention” metric includes Overall Employee Turnover, especially in the key positions,
Preventable Turnover (this indicator considers the reasons the employee left the
organizations and what measures may be taken to prevent it), Diversity Turnover
(turnover rate in professional, managerial, and technical positions), Financial Impact of
Employee Turnover.
The scorecard is an organic design – one that changes with the business. Thus this step is
most important in continually updating and reviewing the scorecard framework, ensuring
that it continues to report relevant metrics and discontinuing those metrics that are no
longer required
HR Metrics
Metric Formula Description
[(No of days absent in month) Measures absenteeism. Determine if
÷ your company has an absenteeism
(Avg.no of employees during problem. Analyze why and how to
Absence Rates month) x (No of workdays)] address issue. Analyze further for
x 100 effectiveness of attendance policy and
effectiveness of management in
applying policy.
(Advertising + Agency Fees + Costs involved with a new hire. Cost
Employee Referrals + Travel cost per Hire can be used as a measurement
of applicants and staff + to show any substantial improvements
Cost per Hire Relocation costs + Recruiter pay to savings in recruitment/retention costs.
and benefits) Determine what your recruiting function
÷ can do to increase savings/reduce costs,
Number of Hires etc.
Health Care Costs Total cost of health care Per capita cost of employee benefits.
per Employee ÷ Indicates cost of health care per
Total Employees employee.
HR expense factor HR expense HR expenses in relation to the total
operating expenses of organization. In
÷ addition, determine if expenditures
Total operating expense exceeded, met or fell below budget.
Analyze HR practices that contributed
to savings, if any.
Return on investment ratio for
Revenue - (Operating Expense - employees. Did organization get a
[Compensation cost + Benefit return on their investment? Analyze
cost]) causes of positive/negative ROI metric.
Human Capital ROI Use analysis as opportunity to optimize
÷ investment with HR practices such as
recruitment, motivation, training and
(Compensation cost + Benefit development. Evaluate if HR practices
cost) are having a causal relationship in
positive changes to improving metric.
Turnover Rate No of employees exiting the job This measures the rate for which
(Annual) ÷ employees leave a company. Is there a
avg. actual No of employees trend? Has metric increased/decreased?
during the period Analyze what has caused
x 12 increase/decrease to metric. Determine
÷ No months in period what organization can do to improve
retention efforts. Evaluate if HR
practices has a causal relationship in
positive changes to improving metric
Total of the costs of temporary The cost for having work completed
workers + independent that would have been performed by the
contractors + other outsourcing + former employee or employees less the
overtime - wages and benefits wages and benefits that would have
Vacancy Costs not paid to vacant position(s) been paid to the vacant position(s). This
formula may be used to calculate the
vacancy cost for one position, a group, a
division or the entire organization.