When it comes to running a business and managing employees, there’s no doubt that personnel forms and other paperwork can be time consuming.
Not to mention, energy draining! All those personal records are often difficult to keep track of even with an electronic employee record keeping program.
With a history of inability to provide analytics that resonate with management, the time has come to manage the way we translate metrics into actionable insight. Doing so will prove the value of Human Resources in a more tangible way so executives can properly grasp it as easily as their afternoon cup of coffee.
Many activities fall under HR metrics, but the ones that show tangible numbers with dollars attached are the ones that matter most to a team of executives. The following are categories that matter most when it comes to showing executives the, often overlooked, value of HR.
Turnover & Tenure
Both turnover and tenure combine to create what is known as employee retention. When these values are looked at alongside new hire metrics, the hard costs give insight. As you consider the turnover in your company, the focus should be on what types of employees you are actually losing.
At the end of the year when you look back at ex-employees, ask yourself if it’s the top performers you lost or a handful of people who weren’t right for the company anyway. If you lost 2 or more top performers, then it’s time to look deeper into employee turnover.
Understanding why employees leave and making the necessary adjustments to keep your best employees around is priceless to your company and morale of your staff. Plus, think of all the money and time you’ll save in going away parties.
Next, consider the average length an employee sticks with your company. Keep in mind there is both good and bad turnover so don’t just focus on the pure number. Along these lines is understanding the metrics behind employee satisfaction. Even if they don’t leave and instead stick it out with the company, an unhappy employee will be far less productive than one who is satisfied with their job and the company as a whole.
Read: They will be on Facebook most of the day.
By keeping your top employees from leaving and keeping your current employees satisfied, you will reduce the hard costs associated with recruiting and onboarding. Top performers are difficult to find, so focusing on these HR metrics is beneficial.
Metrics For New Hires
When there is an unfilled position it throws a wrench in the metrics. Being short-staffed causes others to work overtime which can cost the business more money and employee morale. Eventually an overworked employee will be too tired to come in and even get sick.
Consider the cost per hire and how your recruiting costs tie into employee retention. Upon hiring, training and the time it takes for an employee to work at full capacity are factors which are often overlooked. After all, from the interviewing process to travel expenses and relocation costs, all of this real money adds up to serious internal and outsourced recruiter costs.
After establishing reasons why your top employees are not staying and performed the necessary changes to increase their tenure, you’ll ultimately be saving the hard costs associated with new hires.
Having these numbers allows you to better explain to executives exactly what it means to be out a particular employee for a certain amount of time and how much money you’re losing as a result. Again, the numbers and dollars associated with them are what will get their attention.
Revenue Per Employee
Of course we can’t forget the importance of revenue per employee. Creating the right time and labor management solution will help you better understand what your employees are working on and where.
Software programs are available to specifically give accurate metrics for how long an employee is working on a particular take and if they achieved their project goals. Knowing this information is crucial to keep employees accountable and company expectations for high quality work.
Organized Data Presentation
Analytics is now an essential HR competence. Research has proven that companies with HR departments utilizing analytics are outperforming their competition. As with any department, staying organized and knowing where everything is at all times, makes life much easier in the workplace.
For those working in HR, the role of staying organized is even more crucial as your job involves keeping track of dozens, sometimes hundreds of employees. By having the data presentation at your fingertips, the guesswork is taken out and gives you the feeling of always being prepared – be it a manager question or government audit.
Why Are HR Metrics Important?
In the hectic world of human resources it’s easy to get distracted by to-do lists, and lack of time. For that reason, among others, HR departments often fail when it comes to the ability to report to management. The right metrics not only help track and quantify HR efforts, but they can also provide valuable insights to help drive growth and company success.
Check Out Our Free HR Reporting Template To Help You Get Started With Better Organizing Your Own HR Metrics.