HR productivity has to be measured to ensure the effective performance of the HR department as a whole. Here are some tips on how to measure this aspect.
The HR department may be one of the silent departments that operate in the background of a business or organization. However, this does not mean that the HR department does not play a crucial role in achieving success for the business. This is because the HR department primarily focuses on hiring the very people that will shape and mold the business towards success. Thus, it comes as a must to measure the productivity of the department itself. And there are actually top 10 tips to measure productivity that can greatly assist you here.
However, before we do discuss these relevant tips, it would be better to understand first the very reason why HR productivity has to be measured. There are so many reasons underlying this facet in any business or organization.
What first comes to mind when you hear the phrase HR department? For the most part, people would probably think about the HR department being responsible for recruitment and selection for any given company. This is indeed one major responsibility of the HR department; however, it is most certainly not the only responsibility that the department has on its shoulders. Aside from recruitment, the HR department also focuses on payroll, compensation, benefits, employee relations, and other legal matters. These are very important aspects HR personnel deal with every single day for all the employees in the company.
These and more are just some of the reasons why it is very important to measure HR productivity. Here are some tips that can come in handy for this endeavor.
#1. Focus on percentage improvement in terms of productivity. This pertains to the money spent on people costs for every generated revenue in terms of dollar. Compare the improvement, if there is any, between the present year and the previous year.
#2. Focus on quality of recruiting. For this, you should check the performance appraisal of scores of the new hires. Just check for the average here. If a lot of new hires have been promoted to higher positions, then recruiting is of much quality here.
#3. Focus on retention. Is the turnover rate high or low? How is the performance turnover when it comes to key positions in the company?
#4. Focus on compensation and benefits. Check for the percentage outlining the employees’ pay that is quite risky, especially when based on job performance.
#5. Focus on employee relations. Determine the turnover percentage of the managers that are rated at the bottom of the pile. How are employee relations between these bottom-rated managers and the employees they handle?
#6. Focus on training and development impact ratio. Determine the difference between the employees who take jobs offered due to development opportunities and the employees who leave the company because of a lack of said opportunities.
#7. Focus on the give away or take away ratio with your competition.
#8. Focus on the impact of HR on the business results of the managers. A survey is conducted here where the overhead functions of all managers are ranked according to importance. This helps managers focus on business performance goals.
#9. Focus on HR expenses per employee. If expenses are at an all-time high without significant results, then HR productivity becomes questionable.
#10. Focus on employment brand strength. Another survey is conducted to check if the applicants do view the management practices of the company as positive.