Lots of employers can be forgiven for not utilizing data effectively to achieve desired business outcomes. This is because it may not be immediately apparent that there is a large array of data that can be used by Human Resources Management to objectively measure performance in many different areas of an organization. Many will be familiar with how useful Key Performance Indicators (KPI’s) are when tracking sales targets for instance; but not as many employers will be aware that there is a similar system, known as HR Metrics, which are capable of unlocking crucial information which can aid business decision making immensely.
There is a plethora of modern data analytical tools and technology out there which can really help you keep on top of the information you are trying to measure. However, the exercise does not need to be complicated: and even with the simple use of Microsoft Excel to track basic information over a period of time, it’s possible to ultimately predict the success or deficiency of a business function.
The below are just some HR Metrics which can be extremely beneficial for employers. Even adopting only some of these can lead to more positive performance and results in the workplace.
Time Taken to Hire
A simple, yet valuable, metric for recruitment strategy is the time taken to hire an individual (in days). If you track the number of days between a position being posted and a candidate accepting the position, it’s an excellent way to assess the efficiency of the recruitment process and can indicate how difficult it is to fill a certain job position. Knowing this can allow an employer to know how long they may need to dedicate to the recruitment process for this role in the future and for how long their operation may have to do without someone performing this role while a replacement is found.
Most employers should be interested in how many employees leave their roles after they are hired. An employer can determine which time period they want to track, but it can be helpful to keep a closer eye on how many employees leave after their first year. It takes time and training to bring an employee up to speed in a position, not to mention the monetary cost of doing so, therefore identifying any particular reason why employees may be leaving soon after they join the organization may be crucial to ensure that steps are taken to rectify any issues for the future. Thought should also be given to performing exit interviews with these ex-employees, if they are agreeable, in order to gain a deeper understanding behind their reason for leaving.
Revenue per Employee
Moving away from the area of recruitment, a metric that can help identify the overall efficiency and performance of the organization as a whole would be to track the revenue each employee brings to the organization. For professional service firms like law firms and accountants, tracking billable hours is useful. This also allows managers to pick out top performers, assess the quality of hires, and to assist with the development of an employee performance improvement plan if needed.
As experienced HR professionals, we can attest to the fact that happy, stimulated and engaged employees are more likely to produce positive results for an organization, even if a position is high stress or pressurizing. As such, it can be very helpful to keep track of employee satisfaction and engagement by asking them on an on-going basis, perhaps during performance reviews. It should also be mentioned that the level of an employee’s satisfaction in their job can be a great metric for assessing a manager’s performance as it relates to coaching and developing staff.
Absenteeism in the Workplace
Keeping track of absenteeism can be incredibly helpful in understanding whether there are any areas of the business with high dissatisfaction rates. Understanding why long absences are occurring may assist an effort to focus time and energy on improving the practices of a particular department.
As can be seen, data can almost be infinitely used to measure key areas of an organization and inform decision-makers of the best way to move forward with strategies. If you cannot understand why a certain trend has been happening to your business recently; or you wish to implement a business strategy to improve an area of your business, it really can pay to start adopting some HR Metrics to give you some invaluable, objective data to work with. Please contact the HRPAR team today to discuss how we can assist you in developing a Human Resources Management strategy that will help grow your business.