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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