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What does the term “human resource metrics” mean?  There are different approaches to defining these indicators and their essence, but the most objective understanding of this term implies that these are measurable guiding principles, which are generally applied by organizations of different sizes in order to work out cost-efficient business plans aimed at providing high workforce performance level. The main concept in the process of developing human resource metrics is personnel assessment. If you believe that evaluation of new applicants is easily done right from the start, then you are seriously mistaken. In most cases, this process appears to be a time-taking and even challenging procedure and lots of proficient human resource specialists face problems when coping with this task. Why is this procedure so painstaking? The thing is that it seems not viable to provide a proper and accurate assessment of each applicant without being aware of his/her capabilities, knowledge and experience. So, it is not surprising that even highly experienced recruitment specialists fail here. That is exactly why human resource metrics are essential in any serious organization and this is what HR departments are mainly concerned with.

Collecting and working out a system of HR metrics for your business is the task which is not done easily. In most cases, it requires patience and responsibility to be completed accurately and effectively. However, if you manage to apply proper guidelines, this can maximize your chances for success! What should you better start with? One of the most significant and time-consuming things here is the process of gathering information about your workforce, their skillfulness and current productivity.  There are several issues that have to be assessed here, but you will need time to define the most adequate number of metrics that can be applied here. By the way, experts admit that the most suitable number of indicators to be evaluated during this process is ten, so take your time to figure this out on time.

There is one more issue you need to keep in mind when comprising your human resource metrics. To provide the most effective evaluation of your business performance and personnel productivity, you need to consider versatile aspects of your business. These will obligatory involve workforce engagement, recruiting and retention, employee productivity, customer and manager satisfaction rates etc.  The number of issues to be considered here may seem astounding, but if you know your business objective and strategies, then this choice will be facilitated for you.

It is hardly a secret that each company considers the processes of personnel recruitment and retention important and highly responsible. However, they are not quite easy and therefore there are special departments that are concerned with these issues. Human resource departments perform vital functions in each organization, because their work is closely connected with further productivity and profitability of the whole company. Though there are no measures that will be 100 % effective in performing the selection of employees, there are still measures that can be undertaken to maximize chances for success. One of such systems is known and the balanced scorecard system, which uses diverse metrics to evaluate the performance of the whole HR department as well as those steps they make to choose qualified and knowledgeable applicants for vacant positions.

Unfortunately, it is not always easy to choose the most suitable metrics for your business, because some of them may not be useful for your company at a certain period of time. That is why there is a need to subdivide all metrics into those that work better for your organization and those, which may prove to be useless. So, how it is possible to differentiate between good and ineffective human resource KPIs? To start with, the best indicators are those that are aligned with the strategic mission and business objectives of your company. In other words, they should contribute to the development of your organization with regard to the goals you have defined in advance. Another characteristic feature of good HR metrics is that they should be well-defined. It means that managers of a company should be able to explain the essence and importance of each metric they are going to implement as well as to know what data sources to use in the process of its development. Furthermore, human resource metrics should be chosen and introduced on time in order to show the current condition of a company and the potential productivity of its personnel. Finally, the number of KPIs you are planning to implement should not exceed 10 metrics. It has been proven that the more indicators an organization tends to apply – the less chances to perform the productivity analysis they will have.

Experts admit that it is not that complicated to find human resource metrics in general. What causes more problems is the ability to define the most useful and crucial of them and process them on time. So, the more proficient the HR department of your company is – the more fruitful and productive the whole system will prove to be.

What is the best way to control and measure the performance of a human resource department? There are several systems that can help fulfill this task successfully, but the balanced scorecard system is reported to be the most credible and transparent at the moment. Human resource BSC is a superb way to check how the human resource department of your company is currently doing. This system comprises a set of metrics that can help focus on those issues that seem the most critical for a particular organization.  HR BSC is rightfully said to be easy to develop, use and implement, because it allows better alignment with the company’s key performance indicators.

Human resource KPIs are characterized by a number of features. To start with, they are frequently connected with the company’s corporate goals. That is why it is the top management of the organization that is responsible for choosing and developing the most critical indicators.  Secondly, these metrics are quite easy to understand, which facilitates their introduction. Finally, they do not interfere with each other, but are well-balanced to ensure a smart approach to the evaluation system. The only thing the management of a company should keep in mind is that key performance indicators may lose importance and value with the lapse of time. This means that they should be reviewed and updated from time to time.

Each human resource metric involves a particular amount of indicators to be measured. In this respect, it may be helpful to analyze the most widespread and efficient metrics (those that deal with personnel recruitment, employee development, health and safety, finance etc.) and indicators they comprise.  Thus, HR metrics, which are meant to measure the efficacy of the recruitment process include such KPIs as rate of employee satisfaction, percentage of the retention of new employees, job offer acceptance level, percentage of filled vacancies, recruitment source ratio, average cost of recruitment, average number of interviews, time to recruit etc.

HR metrics that pertain to employee development generally involve the percentage of workers who receive regular career advancement reviews, the amount of time an employee is in the same position, ratio of external vs. internal training, percentage of retention of new hires, level of employee satisfaction, percentage of workers who undergo training during a particular period of time, average training expenses per one employee, the number of training hours per each worker etc.

HR finance metrics, in their turn, comprise such indicators as accounting costs, accounts payable/receivable turnover, corporate credit rating, CAGR (Cumulative Annual Growth Rate), ratio of cost income, cycle time of payroll processing, amount of payable/debtor days, takeover value,  indirect expenses, fixed expenses, marginal costs etc.

Business performance of most organizations is mainly affected by the way the HR department fulfills its functions. And it is not really startling, because human resources are exactly what any large or small company rests on. It does not matter seriously how effective and elaborated the technological support of a particular organization is. What really matters is the personnel of a company as well as their skillfulness and contribution into its overall performance.  Consequently, it proves to be highly important to undertake special measures that will boost employee productivity and provide the workforce with superb training opportunities. This is where human resource KPIs will certainly be highly valuable.  These metrics can help turn a company into a nice platform that will allow employees exhibit their talents, knowledge and skills. The better the workforce realizes its goals and identifies them with those of a company they work for, the higher the chances for business success are.  There is no need to say that achieving that in a smart way is not easy and becomes possible with the system of balanced scorecard, which uses specific metrics that can help handle problems pertaining to workers.

Key performance indicators are non-financial and financial measures, which are applied to evaluate current progress of a company with regard to its objectives. Human resource departments can measure the following issues: attendance, staff turnover, diverse statistics and average length of servicing. It is better, however, to make use of special KPI reporting applications or software instead of making the company’s employees waste their time collecting the required data. These programs have certain features, which allow using pre-designed templates, into which you can incorporate KPI reports.

What are the advantages of measuring KPIs and how are they connected with HR performance? As a matter of fact, the number of benefits is really impressive. To start with, the process of measuring key performance indicators is one of the quickest ways to check whether the current performance of the human resource department and the company in general correspond to the strategic goal of this organization. These metrics enable HR managers to track the performance of a certain department or a company in a single place. Another benefit of this system is that it allows the whole team to work consistently trying to reach a common objective. This boosts the corporate spirit and makes the system of evaluation more transparent and trustworthy.

HR departments are mainly concerned with the assessment of personnel performance and their influence upon the productivity and profitability of a company. As far as this process is time-taking and requires financial expenditures and effort, lots of businesses have come to a smart conclusion – to develop and implement human resource metrics, which can help provide a trustworthy and deep insight into the way the HR potential is measured.

Human resource metrics are viewed with regard to the following perspectives: friendly administration, processes of personnel retention and recruiting, accountability and rewards, human resource tech servicing, smart resource application and integrity of HR communications.  Apart from this, it is up to a company to decide whether to incorporate them into the consistent balances scorecard system or not. This approach, by the way, is quite effective for organizations of different sizes and specializations because it helps evaluate overall employee attitudes, turnover rates and costs, personnel knowledgeability and skill levels etc. That is why managers often believe that this system is highly valuable and helpful.

As a rule, each human resource metric comprises from 2 and up to 5 KPIs (key performance indicators). For example, the “employee turnover” metric may consist of the following indicators: cost per hire (analysis and evaluation of the number of hires, advertising expenses, agent referrals, company fees etc.), turnover rate (the percentage of workers that leave a company during a specified period of time), turnover costs (estimation of new hire expenses, termination and training costs), duration of employment (considers the title of a job, the name of the department etc.) and time to fill (amount of time from the approval of job requisition and up to a new hire).

The “employee attitudes” HR metric may involve such indicators as manager contentment (the approximate percentage of workers satisfied with the way they are treated by their manager) and job satisfaction (the approximate percentage of workers who are satisfied with their positions and job in general).

The “retention” metric typically comprises the overall rate of employee turnover, diversity and preventable turnover (considers the major reasons that made each worker leave the company as well as steps that could help prevent the situation) and, as a result, the financial influence of personnel turnover.

Finally, the recruiting metrics will involve the performance appraisal of new hires (appraisal of new employees as compared to that of workers hired earlier), the vacant period (the amount of days during which the position was vacant), financial effect of bad hires regarding the cost per hire indicator and that, which shows the turnover expenses, level of manager satisfaction and turnover rates of recent hires.

Human resource metrics are widely applied in all spheres of business performance nowadays. Most of them have top influence upon the process of adopting strategic decisions in a company.

Human resources have always been considered one of the most significant assets of any company. In accordance with recent studies, the efficacy level of any small or large business depends a lot upon the way the human capital is managed. It is reported that about 80% of business owners believe that effective human resource management is critical for the success and better performance of their organizations. They also report that efficient measurement is a necessity when it comes to the delivery of proper human capital management. That is why experts claim that adequate and reasonable policy of HR measurement makes it possible for business managers to gather consistent and trustworthy data about their personnel and its influence upon the productivity of a company. As a result, this allows developing an adequate program of measuring HR metrics, which will ensure that all the measurement activities are relevant with the company’s strategies in general. With that said, it becomes clear that HR function notably affects the overall business performance and a company’s competitive capacity depends a lot upon the way its owners manage the most important and influential asset – employees.

As far as the process of HR measurement has serious impact upon the performance of any organization, it seems vital to view this procedure from six significant perspectives, namely retention and recruiting processes, accountability and rewards, collegial administration, reasonable and thought-out application of the available resources, proper human resource service technologies and integrity of communications.  Apart from this, it is worth mentioning that any human resource strategy should be consistent with all short – and long-term business objectives and goals a company has initially set.

When developing HR metrics, managers of any company should check if these indicators have a positive effect upon its performance and ensure a smart productivity evaluation, which, in its turn, contributes to the improvement of customer satisfaction and profitability. To make the evaluation system more effective, all HR metrics are generally classified into three basic groups, namely real-time, historical and forward-oriented. This classification is required to provide a better insight into the overall development of your business. That is why the human resource department can make use both of the available historical data and current indicators of a company’s success. HR metrics incorporated into the system of balanced scorecard can facilitate the measurement process by making the readability and accessibility of human resource data more comprehensible and well-structured.

Human resource metrics have lately become extremely popular with managers of both large and small companies. However, there is one question that worries lots of business owners today: if HR metrics are so effective, then why cannot some organizations cope well with their implementation? Experts who have explored this issue, have come to the following conclusion: the problem is that a lot of companies make a number of errors when setting up these metrics. The most common mistakes here are that HR departments of most organizations develop and introduce metrics in a certain vacuum  and apply an excessive number of them at a time. This prevents the managers from analyzing the obtained data adequately and drawing up proper conclusions. So, it certainly makes sense to have a closer look at these two errors.

Creating metrics in a vacuum… What does it mean? It just implies that HR managers try to cope with this painstaking process on their own and do not consider it important and necessary to use a collaborative approach. The latter method, however, will make it possible to analyze a complete list of the existing human resource metrics in details and point out those of them that will be understood by the company’s top managers and will allow the evaluation of its current business impact and performance.

The next error that prevents the HR department from getting the most out of these indicators is that they tend to choose and utilize too many of them. This approach is actually unnecessary and often too expensive. The most reasonable number of metrics to be utilized in most companies should range between eight and twelve. The thing is that the very process of collecting, analyzing and calculating human resource metrics may prove to be too time-taking and costly.

What KPIs are considered the most essential then? Well, the list of these metrics may seem quite extensive at first sight, but there is no need to use all of them simultaneously. Just look through them more carefully and decide what exactly needs improvement in your organization at the moment. So, the list of the most crucial human resource metrics includes: overall workforce productivity, employee engagement, retention and recruitment rates, manager satisfaction, general HR expenses, employee relations, turnover costs, employee satisfaction, cost per hire etc. This list in incomplete, however, so take your time to explore more metrics and decide whether they are essential for your current business or not.

No matter what organization you work in, you definitely realize the importance of adequate personnel management. This task, however, is not easy to accomplish, taking into consideration the size of a company and the number of its employees. That is why it becomes clear why exactly the human resource department is known as the one that performs the most responsible duties when it comes to effective evaluation of workforce productivity. The larger the company is – the more elaborate and trustworthy system should be applied to measure these issues. In this case it seems impossible for any HR department to go without specific metrics that will help make use of the measurement process.

You have probably heard that the balanced scorecard system is widely applied by different sectors of one and the same organization. Each department, however, pursues different objectives when implementing this system. The human resource section, in its turn, works out and applies HR metrics to measure the efficacy of personnel performance. No wonder, it is considered one of the best methods for evaluating the effectiveness of the working process and the efforts of the company’s workforce. This system also helps define and organize the goals of the organization that are required to ensure stability and profitability of a company.

As a rule, working out and implementing HR metrics always takes time and efforts. The whole process generally starts with a detailed analysis of the company’s productivity and performance of its personnel. As soon as the major problems are identified, it becomes easier for the HR department to set up necessary metrics. In addition, human resource managers are recommended to check whether the available volume of the workforce is enough to ensure the growth and development of a company. In case the number of employees seems to be rather small and their knowledgeability and skills leave much to be desired, the HR department should organize additional training to promote their professional growth. Human resource metrics prove to be helpful in this process as well, because some of them may show whether the results come up to the primary expectations of managers.

As far as the overall number of the existing HR metrics is quite impressive, the HR department should define which of them may be used to the advantage of the company with regard to current problems and pre-set objectives identified by the management of the organization. The most crucial metrics that need implementation in most companies are the following: turnover rate and cost, time to fill, cost per hire etc. What you should remember is that your company will benefit from HR scorecard only in case there is a reasonable goal, relevance and sufficient research.

Proper and effective workforce management is not a simple job irrespective of the size of a company. That is exactly why the human resource department is that section, which fulfills nearly the most responsible functions in any organization. Its main task is not only to hire new employees, but also to make sure they are competent, experienced and knowledgeable enough to qualify for a vacant position. The human resource department handles these processes almost every day, but this does not mean that they do that successfully. Unfortunately, even those HR experts that have years of training and experience cannot differentiate between skillful applicants and those that lack experience right from the start. Furthermore, the growth of a company often results in the increased need for a more thorough and improved measurement system that will make it possible for the HR section to assess the workforce in the best way.

One of the most widespread and popular measurement systems applied nowadays is the human resource scorecard. Though it may be used by other company departments as well, it has a truly impressive impact upon the work of the HR department. Its application implies that HR specialists use the most reasonable and reliable method of assessing and defining the efforts and value of all employees. With HR metrics, the process of management becomes easier, thus resulting in the maintenance of a stable and powerful company.

Establishing the HR balanced scorecard system, however, is much more complicated that lots of managers may think. It always takes time and money, but if you are lucky to do everything faultlessly, the result will certainly exceed your expectations. The whole process starts with the identification of those metrics that are crucial for your business. This involves a series of reviews and checkups required to point out suitable indicators. The main task of HR specialists at this stage is to research the current workforce status and decide whether the amount of hired employees is enough to contribute to the expected company growth. According to the obtained results (either negative or positive), the HR department will define a reasonable objective in establishing the scorecard.

Having decided upon all the priorities the company has, the human resource department proceeds to putting metrics into practice. The most widely implemented of them are the turnover rate, cost per hire, turnover cost, time to fill etc. Keep in mind that the clearer your goal is – the more successful the HR measurement process will be!

It is often quite tricky and sometimes even painstaking to define those factors that affect the impact of a human resource department upon your company. This is because there are many aspects that are worth considering here and it will be inevitably reflected in the excessive amount of HR metrics you will wish to implement. Well, this is not quite threatening, but the whole system may prove to be not reliable and effective in the long run just because many metrics require more precise and through analysis, thus making it difficult enough to assess performance and capabilities of your company in general. That is why it makes sense to figure out the most crucial issues that are urgent for your business and may seriously affect its advancement.

It is highly important to think about those aspects that are directly associated with your workforce productivity when setting up HR metrics. One of the most distinctive and serious measures, which affect the efficiency of the whole HR team is the success and productivity of the company employees. With regard to this, you should primarily focus upon the implementation of those metrics, which are designed to improve your personnel productivity.

One of the basic roles of the HR department is obviously employee recruitment. No wonder, each successful company is mainly oriented upon the enhancement of the HR department’s capabilities to choose the most suitable and skillful applicants that will qualify for this or that position. In fact, this is one of the first steps large businesses undertake nowadays. The truth is that they realize that effective business advancement depends a lot upon the skillfulness, goal-orientation and experience of the company workers. Furthermore, the more qualified the workforce is, the higher chances the HR department will have to replace a worker that will decide to leave out of a sudden. As a result, this will not affect the overall company performance, productivity, stability and, of course, profits.

As mentioned above, HR metrics are applied for different reasons. They do not only help analyze and evaluate the current functioning of a company and problems it faces at the moment, but also contribute to higher employee retention level. This is, by the way, a great way to save money for further company development and image protection.  So, think twice before deciding upon the quantity and essence of human resource metrics you will establish in your company.