Scorecard Metrics for HR

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.

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For a company to be successful in its operations, the performance of its HR department should also be monitored. There are aspects to remember in measuring such performance.

In any company, regardless of the industry you belong in, there are actually a lot of departments in existence. This is because there are many responsibilities and functions entailed in running a business, so you can never do without a little bureaucracy these days. And the performance, as well as the productivity, of each and every department is constantly monitored. This is to ensure the overall success of the company. When it comes to performance and productivity, it is actually the HR department that is responsible for assessing these. But even the HR department is not exempted from being monitored. This is because the performance of the HR department is also assessed.

A lot of people may think that the HR department is not one of the major departments in any company. But this is quite the opposite of what’s true, you know. The HR department primarily focuses on hiring the very people that would make up the workforce of the company. If this department is not productive or not performing up to par, then the mere act of hiring and recruiting will be questionable for any company. Thus, the HR department is indeed vital in the overall performance of the company.

There are certain aspects to keep in mind in measuring the performance of HR departments. These aspects are also known as indicators. One of these is workforce productivity. Now, it is very important to note here that how companies view workforce productivity can be different from one another. This is inevitable because companies have different visions, operations, and goals, to begin with. But when your employees are very productive, then your HR department is indeed performing well in this aspect.

Another aspect that you should bear in mind is employee engagement. This actually refers to the professional relationships your employees have amongst themselves, as well as with the different levels of management. If the score for this aspect is high, then this is a strong indicator that your employees do hold their jobs as very important. Employee satisfaction is the key concept here. For an employee to perform well at his job, he should be satisfied with everything his job entails. To determine the level of satisfaction of your employees, you can actually conduct surveys and interviews. These are the perfect avenues for your employees to share whatever thoughts they have.

Recruitment is an important thing to consider as well. To monitor this, you have to check out the performance appraisal scores of the employees that have been hired. It would be so much better if you see that a lot of your employees have been promoted to higher positions at a reasonable timeframe. This way, you are sure that your HR department is recruiting the right people for the job.

Employee retention is the last aspect to appraise. You should determine the turnover rate that your company experiences on the average. It cannot be helped because there are always better opportunities in the world of business and trade. But if your company’s turnover rate is low, this means that the employees hired are dedicated to their jobs and to the company itself. Low turnover rates actually mean that the HR department is performing satisfactorily.

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