Common HR Metrics and Their Formulas
Having large amounts of date to manage is common in companies. And if you have not been called by a large company to provide some valuable metrics, you will be soon. It is time to dip your toes into the pool. But you can start with the shallow end, delving into the deep end will come later. You can start with the common HR metrics which give essential information that will enable you to do some basic analytics. The basic HR metrics include:
Employee Absence Rate
Number of days in a month/ (number of employees × number of days)
You can use this formula to know the rate of absence of the employees in your company, including managers. You will have to look for departments, months or jobs with the highest rate of absenteeism to know the areas of concern.
Monthly Turnover Rate
Monthly Turnover rate = number of separations in a month/ number of employees
Using this formula you can determine how often employees quit or get fired, and the need to have new employees replace them. Unlike the employee absence rate, monthly turnover rate gives more insight into what is happening in the company. Better investigative measures, such as employee surveys, can be used if you find that a department has high turnover. And it will help to determine the root causes of the problem.
Recruiting Source Yield
Recruiting Source Yield = number of applicants hired/ number of the applicants from the recruiting process
Using this formula can help you to improve your recruiting process. In cases where you have multiple job boards, you can use this formula to identify which boards are performing best, and those that are not performing at all.
Tenure = combined years of service / total number of employees
The tenure metric can tell you how employees are remaining in a specific department and what you can do to improve retention. If you want to determine retention in the sales department, you will need a more complicated metric because employees will move in and out of the company more in sales department than in any other.
Sales by tenure
Sales by tenure = amount of sales / years of tenure
With this formula, you can tell how well your sales department is working, as a function of retention. It can determine if it is new sales recruits who keep your business profitable or if it is the experience that leads to an increase in profit. You can also determine if your seasoned sales staff are working hard or not to keep your company afloat. Other factors that you can use include sale success by those with a degree and those without.
Utilization percent = total number of employees that are using this benefit / total number of employees who are eligible for the benefit
The utilization process illustrates the amount of benefits utilized. After identifying the benefit that employees are not choosing, you can research if the benefit is worth keeping or not or if you need to add value to the benefits package. If your employees do not use the benefits program, then it is a waste of money trying to add value to it.
The discussed metrics are just the tip of the iceberg about HR metrics that you can perform. The HR professionals have access to numerous data, but the key factor is to convert that data into relevant information by applying analytics.