No one has time to track every HR metric in their business – there are simply too many! Learn what the four key HR metrics are and how to determine which is most important to focus on for your business.
The internet has an exhaustive list of HR metrics, and depending on which article or blog you land on, they all seem equally and critically important to measure. It’s overwhelming!
Who has time to track ’45 must-have metrics’?
Yes, tracking and analyzing various information about your workforce is important. With good metrics, you can make better-informed decisions about your employees and your business.
But, one can certainly get carried away measuring for the sake of measuring and producing statistics up the ying-yang. What matters is what you do with the data you are collecting, how you use the data to guide strategies and actions to improve your ways of working.
Are some HR metrics more important to measure than others?
This is not an easy answer – there is no one set of metrics that fits every organization.
Instead, ask yourself, “What is important to your organization right now? Now, how can HR metrics make a difference in aligning your goals to meet current business goals?”
Be careful not to choose too many HR metrics to measure at once. Instead, stay focused on the company goals and identify 3-4 key areas of current relevance that will add value once you have gathered the data and interpreted the results.
The idea is that by tracking and analyzing certain information about your workforce, the resultant insights and understanding will improve management and leadership decision-making.
Examples of Key Metrics
Goal: Streamline the hiring process to save time and money.
Recruitment is a crucial HR function. Typically, the cost per hire is usually measured. This includes the resources used, such as advertising methods, marketing costs, length of time to hire, and the number of employee referrals. The goal of this metric is to track hiring success and optimize the hiring process.
- Employee Turnover Rates
Goal: Lower turnover rates – this means less money and time spent hiring and training new recruits.
Measuring the number of employees resigning and their reasons will give you an idea of how well the company can retain their top employees.
This can help you determine what improvements need to take place to stay ahead of competitors regarding salaries and benefits. One can break it down further by job function, department, and manager.
- Employee Engagement
Goal: Get employees more engaged! Better engaged employees are happier, more productive, and stay with the company longer.
One of my personal favourites is measuring metrics that contribute to employee engagement. You can do this through employee satisfaction surveys and stay interviews.
Questions can focus on some of the key areas you want to gather employee feedback on, such as the quality of training, benefits, culture and overall satisfaction.
Implementing measures to address key concerns helps boost employee engagement, especially if they feel their voice isn’t being heard. Keeping your employees engaged and satisfied will certainly help reduce turnover rates.
- Leaves of Absence
Goal: Decrease number of sick days, stay on top of vacation days accrued.
Measuring various leaves of absence can help you collect and analyze information such as absenteeism rates, reasons for absence, sick leave and vacation time taken and accrued.
Overtime and lieu time accrued is often a hot topic and is sometimes not monitored as carefully as it should be. The process of keeping accurate records of who has accumulated lieu time and when it should be taken can be tedious and very often gets out of hand if not properly managed.
Which HR Metrics Should I Start With?
There is certainly no shortage of things to measure in HR! And all can be beneficial to your organization.
But not everything is immediately important.
For example, recently, I had the urge to make drastic changes to a company’s career site to determine if the number of job applications would increase. My partner correctly pointed out that this might not be a high priority for this business as very few positions are advertised, and the tenure is so high – benefits of high employee engagement.
I realized this was not an immediate need and that perhaps I should be focusing on other HR metrics that would add more value.
So, where should you start?
Go back to those questions I asked in the beginning, “What is important to your organization right now? Now, how can HR metrics make a difference in aligning your goals to meet current business goals?”
Make it easy and keep it simple. Start with one goal or problem your organization has, like decreasing turnover rates. And follow these simple steps…
- Research. Discover what potential causes could be and what data you should look for.
- Determine your data points and lay a simple and consistent plan to collect them. Also, have an endpoint (i.e. a period of time which you will need to hit) before you have enough information to make a decision.
- Follow your plan, then assess.
- Make an actionable plan with the changes that need to be made to lower your turnover rates and stick with it!
Whatever you do, don’t jump to conclusions!
Very often, it is easy to jump to conclusions about why turnover is high or why employees are not engaged. The benefit of using HR metrics is that you can make decisions backed by facts to help you put practices in place that drive the improvements needed.
If you have too much on your plate already or need expert help determining what data points you should be measuring, contact Bridge Legal and HR Solutions for guidance and direction. For more information, call (647) 794-5442 or email us at email@example.com.