Choose the right human resource indicator to measure HR performance
It is well known in the business world that any business, company or organization needs to be constantly developing. This statement is just unquestionable. Once you decide to stop, your business will be surely wiped out by competitors. Markets are very volatile these days, and competition is very tough. No development means that you are standing at some point while your competitors have moved forward. They managed to make production cheaper and thus are ready to offer cheaper products/services to potential customers.
In order to develop your business, you first need to know how well it is performing now. Indeed, it is useless to plan anything without basic understanding of current business performance. This is like translating a poorly written text. First you need to correct original, and only then produce translation. The same applies to business. If you are having small problems now, you will have big problems in future if you choose to expand your business.
Use correct human resource indicators to measure HR performance
Evaluation of business is not an easy process. There are several general indicators of business performance like net profit or total loss. However, you need to know exactly what influences well being of a company.
We recommend that you start with a HR department. You need to understand that your company is the people who work there, but not offices, computers, production facilities etc. Your personnel needs to be properly manager.
Balanced Scorecard system measures different human resource indicators
All companies want to have the nest specialist. “Headhunting” is very popular now. One of the main jobs of HR department is to find and employ professionals, at the same time spending minimum amount of money for these purposes.
Using Balanced Scorecard and HR metrics you will be able to locate weak and strong point in the work of a HR department. There are several KPIs (key performance indicators) which are especially important in evaluation of a HR department performance. Let’s review some of them.
Cost per hire. This indicator is considered as one of the most important KPIs. Such costs usually include expenses for advertising, agent’s fees, relocation, recruiter pay and some others. Logically, the less money HR department spends for a professional employee, the more efficiently it works.
Length of employment is a very interesting indicator. It can represent several KPIs referring to organization climate. If people refuse to work for your company for a long time, then they are not satisfied with something. Thus, if this indicator shows a low value, try to find the root of the problem.
