Does the human resource department of your company measure its performance regularly? If not, then it seems vital to underline the importance of this procedure, because some measurement tools may be really powerful when it comes to defining areas that need improvement. This will eventually help your company realize special needs of your employees and do everything you can to come up to their expectations.
The choice of human resource metrics you can implement these days is endless. Some of them are effective when measuring the rates of retention and recruitment, for example, while others should be analyzed to span payroll, revenue, compensation and engagement rates etc. Nonetheless, all of them help provide a helpful and meaningful insight into the performance of the human resource department. At the same time, it is worth underlying that some indicators are more significant and, hence, widely used as compared to others, which generally depends upon the goals of your organization, its strategies, effectiveness etc. With regard to this, HR experts are recommended to consider the following issues when designing and implementing metrics: information that has to be tracked, the ways of analyzing the data, the use of this information for further strategic planning, problem-solving, performance improvement etc.
Nowadays, most HR departments make use of the following common metrics: absence rate, cost per hire, engagement rating, return on investment, yield ratio, revenue per one employee, tenure and annual turnover, time to fill etc. Absence rate, for example, is calculated by means of dividing the number of days an employee is absent during one month by the overall number of workers multiplied by the number of working days. This metric is essential when there is a need to find out the percentage of employees who are absent for this or that reason and improve the result if necessary. To calculate the cost per hire, you need to summarize all recruitment expenses in general, the sum of benefits and the cost of compensation.
Satisfaction rating is another metric to be calculated if you intend to determine the percentage of employees who are satisfied with their job and work place in general. The higher this indicator is, the more productive the personnel performance becomes and the higher the rate of customer satisfaction is.
These are only several HR metrics that may be potentially beneficial for your organization. You can implement much more of them depending on the current needs and efficacy of your company.