Scorecard Metrics for HR

Companies that provide or promote training programs to workers must also ascertain ROI. Employing the means to measure efficiency of training programs is helpful, if not utterly essential.

Training programs are one of the largest investments of companies wanting to improve the performance of employees, especially those in the bottom line of the organizational hierarchy. However, there may be questions in the efficiency and effectiveness of training programs. It is important then to measure the efficiency of training programs to ascertain the return of investments of companies cashing out for production improvement for the attainment of organizational goals.

Efficiency is defined as the capacity or power to produce the desired result at a minimum amount of time or resources. In accounting, it refers to the costs of inputs per outputs produced. For instance, a production facility is deemed efficient in making a particular product when it meets the budgeted amount of input or less to produce the required units of output. In training programs, it may seem efficient when the management has seen a rise of productivity level of workers in correspondence to the training budget and the actual amount of expenses and the time duration of training programs.

Moreover, a training program can be considered efficient when the revenues of the enterprise increase and that the program is within the means of the training budget.

Some companies may also measure the efficiency of training programs by comparing the productivity level of an individual worker to the training budget per employee. The company checks the result of the training program by evaluating the performance of the individual worker before and after the performance-enhancement program.

Cost is also one of the determinants of efficiency measurement of training programs. Companies that provide training programs to employees can see the worth of their investments by comparing the actual cost of the training to the training budget with the production output and revenue after the training program.

There are certain tools used to measure the efficiency of training programs. They may be within the scope of production management and accounting. Accountants, particularly management accountants, measure the costs of training budget and actual expenses, as well as the return of investment of the business-improvement programs, aside from capital acquisitions. The roles of the accountants and managers have certain significance to the decision-making and performance evaluation in the management level. The HR department also has important roles in the training of employees.

Training programs are perhaps one of the viable investments an enterprise can avail. It is not only for the betterment of the company, but also for the benefit of the employees. It is important then that business owners and managers, as well as HR personnel, to relay to employees the effects and benefits of training programs.

What are the tools used to measure efficiency of training programs?

Accountants may calculate the return of investments of training programs. The HR department may also take part in measuring the performance of employees that have undergone training programs. The management level checks and evaluates the efficiency and effectiveness of the employee-improvement programs using different relative factors.

There are traditional measurement tools used by different departments of an enterprise to determine the return of investment, efficiency, and effectiveness of training programs. The electronic tools can help in delivering the measurement data. However, electronic means cannot be considered replacements to the existing tools of measurement used for training programs evaluation. Instead, they are regarded as supplements in providing the accurate or closer to precise measurement for evaluation.

Tools used to measure efficiency of training programs may vary or are somewhat similar in every company that considers training programs as vital for the achievement of organizational goals.

Cost, time and quality are common factors and criteria in deriving the certain metrics to measure efficiency of hire programs. How important are they then?

There are metrics involved in measuring the efficiency of hire programs.  HR departments of companies may use different measures in hire programs to assess the worth of HR activities and to determine the classification of expenditures of certain activities. Quality, as well as time and cost per hire, can be used to measure efficiency of hire programs.

The hire programs of companies may incur cost and expenses, which may be seen as inevitable. However, expenses and costs must not be too much that they can become overbearing and wasteful if the needed result is not accomplished nor realized. Moreover, company owners and people in the HR department must be decisive and resourceful so the objectives of hire programs can be achieved. Though costs and expenses may be inevitable, they must not be sacrificed nor should they be higher than the required budget to meet HR deliverables. That is where the efficiency measurement comes in hire programs.

Cost per hire is a common measure in assessing the efficiency and effectiveness of hire programs. Cost per hire is regarded by many in the HR field to be simple. To derive the amount of the measure, certain costs can be taken into account. These may include advertising fees, agency fees, employee referrals, travel expenses, internal recruiter costs, and other costs associated with the hiring of a certain position. Because of different positions, the HR department may have different costs per hire for every position. Nevertheless, the average cost per hire can be calculated to assess the measure in hiring costs of the HR department.

Cost per hire is indeed seen as a valuable tool. However, since it does not take into account the quality of the hire and time length taken in filling the position, it can’t be considered the only basis in measuring the efficiency of hiring programs.

Some companies in the recruitment field use an improvised cost of hire measure of hiring efficiency. Known as efficiency per hire, this measure takes into account the total compensation of hire individuals aside from the total cost to hire with the number of candidates hired.  The efficiency per hire is derived by dividing the total cost to hire by the total compensation of candidates being hired.

Time per hire is another measure in hiring program efficiency. Ironically, time is one of the important factors in hiring activity that is not included to derive the cost per hire. Hence, it is important that the time of hiring activity for a certain position must be taken into account to assess the efficiency of the HR department in filling up the position required to be in the production, to increase or meet revenue estimates, and to attain the company goals.  With these in perspective, measuring time in hiring activity is indeed an important criterion in determining the efficiency of the HR department and its people.

Quality is another factor in measuring the efficiency of hire programs. It is one of the essential criteria; however, it is neither easy to calculate nor to estimate. Companies may use different measures and equation to assess the quality factor of the HR department and its hire programs.

Companies may use other metrics to measure efficiency of hire programs. They may include send-outs and hire by recruiters and candidate quality by sourcing channels. HR departments can use different metrics as well. What important are for the common elements to include cost, time, quality, and person or persons involved in the hiring process.