Scorecard Metrics for HR

The Human Resource Department (HRD) is indeed one of the departments in the business that would fall in the background. This is because the HRD is not really that visible, as when compared to the Managerial department or the Accounting department. However, what a lot of people fail to keep in mind is the fact that in spite of the HRD being in the background, it still plays a very important role in the overall success of any business. This is because the HRD is the department that handles the most valuable asset any company can have, and that is, its workforce, its very employees. This is precisely why there are indeed costs entailed in running the HRD, and to determine the efficiency of the department in running these costs, it is but apt to implement the HR Costing Scorecard.

You may be wondering to yourself, is there really a need to implement such a scorecard? There have been so many theories and studies conducted about the implementation of the balanced scorecard. These studies clearly show that there is much promise in the role that the balanced scorecard plays. However, it is quite easy to ignore this importance and significance of the balanced scorecard as a managerial tool in the HRD. Add to the fact that the costs entailed in the HRD are not too visible in nature at all.

The HRD handles people, right? Just how do you quantify human value here? How do you quantify the value or the worth of a particular employee? There are so many factors at play here that it is quite difficult to place a numerical figure on the worth of a certain employee, let alone the thousands of employees under the wing of, let us say, a multinational call center. The typical call center would be handling a number of accounts, which means there are hundreds of employees for these accounts. Now, learning is a lifetime process, so there would inevitably be a need to hold training sessions or programs for the call center representative, to enhance their knowledge and skill sets. This alone is already an expense that the HR has to deal with. Costs are entailed in hiring the trainer, for instance, as well as in booking the venue, plus the food and beverages offered to both the trainer and trainees. These are visible costs; however, the return of investment, or ROI, would be intangible here. This is because the ROI here would be dependent on whether or not the trainees are able to assimilate the new knowledge and skill set that comes after the training program. This should then be included in the HR Costing Balanced Scorecard.

This is just one of the many costs that the HRD has to deal with. Other costs would pertain to the new hires themselves, with retention in mind. The thing to look for here is the percentage of new hires that make it through the probationary period and achieve regular status. As for the regular employees, you should also look for the percentage of employees who have been promoted to higher positions. Performance appraisal is another aspect you should include on the HR Costing Scorecard.
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Each and every department in any business would always have costs to contend with. The HR department is no exception here. It is quite easy to assume that the HR department is devoid of costs, since the costs here are not all that visible, like that of the accounting department, or the IT department. Still, the HR department has costs and expenses, which should be analyzed to ensure that there is promising return of investment here. After all, the HR department is that division of the company that deals with the employees, the very human assets of the company. Thus, there should be a formal system to determine the return of investment for each cost the department makes. And for this, there has to be certain HR costing metrics to be implemented.

Of course, it is easy to assume and even say that the HR department does not really entail that many costs. This is because the department itself actually operates more on the background. But if you really think about it, if you get down to the nitty-gritty roles of the department, you will soon see the many costs that the HR department has to deal with every single day.

For instance, the mere activity of hiring new people entails a lot of costs already. Let us place this in the context of call centers, for instance. The call center industry is just laden with a lot of stiff competition nowadays. One call center offers such an attractive compensation and benefits package. But do not sign that contract right away because there just might be another call center that can match, or even better, that offer! Thus, the HR department of any call center would have to come up with the most attractive compensation and benefits package to grab the attention of potential employees. And how else can the department do that? By conducting research, studies on the preferences and current trends of call centers in the industry. This obviously entails costs for the department.

And if that is not enough, what about the many times that the HR department has to hold job fairs? Booking venues clearly entails a lot of costs already. How would you determine the return of investment here? A number of factors would have to be considered, such as the percentage of people hired over the span of the job fair, the percentage of these new hires that can make it to the probe status, as well as the ones who can achieve regular status after the probationary period. All of these should be included on the metrics scorecard.

As always, the number of metrics to be included here should be pegged at a minimum. It would seem sensible and even tempting to include many aspects as metrics here, but do not give in to the temptation. This is because it would only make the analysis and interpretation of the acquired data all the more complicated. Thus, your HR costing metrics should be pegged at a minimum still. If you are not too sure about the factors to include as metrics here, do not be alarmed. There are so many sources that you can check, as a guide to implement the different metrics that are ideal for your business.
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If you are interested in hr costing metrics, check this web-site to learn more about hr costing kpi.

admin Articles hr costing dashboard, hr costing kpi, hr costing metrics, hr costing roi, hr costing scorecard