HR metrics are quantitative measures that track and analyze various aspects of an organization’s human resources to drive informed decision-making and improve the success of the organization.
Are you ready to unlock the power of HR metrics and take your human resource management game to the next level? From employee turnover to training costs, data analytics can provide valuable insights to help you make informed decisions and drive your company’s success. So without much ado, let’s deep dive into top key HR metrics to track in 2023.
HR metrics are measurements that identify how effective the human resources practices and processes are within an organization. They make it easier to track recruiting, onboarding, and other HR-specific activities. It also helps obtain valuable data about employees such as employee satisfaction, salary, and tenure.
● Employee Absence Rate: Percentage of workdays missed by employees due to unplanned absences.
● Employee Growth Rate: The rate at which the organization’s workforce is expanding or contracting
● Staff Diversity and Inclusion: Level of representation and inclusiveness of diverse individuals within the organization.
● Healthcare Costs per Employee: Average cost of healthcare benefits provided to each employee.
● New Hire Turnover Rate: Percentage of newly hired employees who leave the organization within a certain period, typically measured within the first year.
These metrics can help HR professionals identify areas for improvement, track progress, and make data-driven decisions for the growth and success of an organization.
Hiring and retaining skilled employees is the hallmark of a successful company. A high employee retention rate indicates a stable workforce and that employees are satisfied with the job.
To apply the right retention strategies, HR needs to track employee retention rate, one of the most important HR metrics in 2023.
Measuring this key performance indicator helps you monitor and improve the onboarding process, leadership or employee engagement, satisfaction issues, and problems with employee productivity.
Do you keep your hiring costs in check? Is your recruitment process efficient? If not then cost per hire (CPH) is one of the timeless HR metrics to measure recruitment expenses.
CPH gives you the details of the average amount spent to acquire new talent as well as reach out to all new prospective candidates. Included are both internal and external costs such as interviewing costs, advertising, relocation fees, and more. CPH is a great indicator of cost-effectiveness. So, keep a track of your expenses and optimize over time.
Does it take too long for your company to hire a new employee? Then, it is a sign of a poor talent acquisition process! Reasons could be anything from bad promotion to unclear job descriptions or ineffective screening of prospective candidates to time-taking onboarding process.
And, this is why ‘time to hire’ is the crucial one on the list of HR metrics. Measure this KPI to quickly fill in an open position and avoid losing a star employee to your competitor.
How valuable are your new hires? Are they contributing well to salary hikes and client satisfaction? About 43% of HR professionals find it difficult to hire the right candidates because of competition from other employers.
The ‘quality of hire’ is the right HR metric to gauge this. It encompasses several parameters like retention rates, performance appraisal scores, and other employee indicators. Measure this KPI to get a clear idea of your return on investment.
If you want to make sure that your team stays on track, measure the absenteeism rate. Start tracking and managing attendance.
Whether it is poor management, work dissatisfaction, or poor workplace policies it is sure to spike unscheduled absences and drop your company’s productivity. Taking the help of a data analytics firm and their Power BI experts can smoothen the tedious job of analyzing large datasets like patterns of missed time with the help of sophisticated software.
This is the right metric if you are trying to figure out which employees are productive and which ones need more training. As an HR manager, tracking this key performance indicator is a must to address poor work output issues.
Keep an eye on employee turnover – it shows how many people are leaving and why. Treat high rates as red flags. To keep costs low and productivity high, create strategies to retain employees. To track turnover, simply record departures over a period of time and divide them by the average number of remaining employees.
Does your company offer rewards and recognition? Are they serving your employees’ needs? Are you aware of your underutilized benefits? Or what benefits to keep, add or remove? Here comes the role of the benefits administration metric – one of the core HR metrics to track how effective are your company’s benefits.
Hire a data analytics company for easy tracking and management of employees’ health insurance and other benefits.
Your employees represent your organization to customers, business partners, and vendors. Tracking employee Net Promoter Score (NPS) measures employee loyalty and their likelihood to recommend your company to others.
A high NPS indicates a strong company culture, and it lets you know if your employees enjoy working with you. Improving this metric can help you attract top talent and make your company culture even better.
Training programs are crucial for improving employee productivity. How much do you invest in training each employee? How effective is your employee training program? To measure this, training cost per employee is an important HR KPI.
And you can better analyze the return on investment for employee training programs. You can then take action to change the program if it is not worth it or doesn’t fetch desired outcomes.
Are you planning to build a diverse and inclusive workplace? Then assess your organization’s diversity with HR metrics and analytics.
HR professionals analyze workforce demographics to identify diversity gaps and take action. Measuring the diversity rate is vital, but complicated. Look at metrics like women in management and employees from diverse backgrounds. Use software or consult a data analytics firm to better track progress and identify areas for improvement.
HR metrics are grouped as follows –
It refers to metrics that help you gauge how well you are recruiting and retaining your employees. Key talent management metrics include:
Recruiting and hiring metrics such as offer acceptance rate, new hire turnover rate, cost per hire, and time to hire help you assess how much it costs to find and hire new employees. Accordingly, you can make changes to your hiring and onboarding processes.
Metrics such as employer net promoter score, total turnover rate, attrition rate, and retention rate help HR professionals track employee satisfaction and spot and prevent the company’s workforce shrinkage.
The performance of employees can be measured by metrics such as goal setting, average performance ratings, and time since the last promotion. It helps identify good or at-risk performers, employee engagement, and an overview of performance at all levels.
With the help of metrics like training completion rate, employee training cost, and skills assessment, HR teams can spot skills gaps, and the effectiveness of existing training programs and take necessary actions to future-proof the workforce.
Core HR practices are considered essential for HR professionals as they provide critical information about workforce management. They include:
Time tracking metrics inform HR about employee work hours and costs, enabling strategic time off policies for the company and its employees. Some of the time-tracking metrics are:
● Absence Rate – involves checking if employees are taking more leaves than allocated, which can lead to a fall in productivity.
● Overtime Hours Percentage – measures overtime hours in the total number of hours worked, which can help in improving workforce planning and staff scheduling.
● Percentage of Vacation Days Used – by employees within 12 months, which helps detect employee burnout.
Payroll HR metrics are measurements that help HR professionals track and analyze the financial aspects of employee compensation. These metrics provide insights into the cost of employment, payroll processing efficiency, and compliance with regulations. Some of the key payroll metrics are –
● Cost of Payroll – Measures the total cost of payroll administration. Tracks the return on investment for tools and services a company uses to run payroll.
● Time to Run Payroll – Monitors the total time it takes to calculate and distribute paychecks to workers. Useful to know the effectiveness of payroll processes.
● Accuracy Rate – Tracks the incorrect payments to employees out of the total number of payments. Helps prevent compliance issues.
A good benefits package is essential for attracting and retaining top talent. But how do you know if your benefits are actually working? By tracking this HR metric, you can assess the effectiveness of your benefits program and identify areas where you may need to make changes or improvements.
Tracking HR metrics helps HR teams to:
● Make data-informed decisions
● Improve efficiency and effectiveness
● Identify areas for improvement in recruitment, retention, and development
At the same time, HR experts can ensure compliance with payroll and benefits administration. Above all, tracking HR metrics saves time, resources and money.
Identify specific HR metrics that are most relevant and important for your organization and ensure they are aligned with your business goals.
Invest in HR software platforms that help you collect, organize, and analyze HR data more efficiently.
Regularly survey employees to gather feedback and data on important HR metrics, such as employee engagement, job satisfaction, and diversity and inclusion.
Keep track of employee turnover and conduct exit interviews to identify patterns and potential areas for improvement.
Establish clear goals and benchmarks for your HR metrics to help you track progress and measure success.
Regularly analyze HR data to identify trends, patterns, and potential issues, and use this information to inform decision-making and improve HR strategies.
Share HR metric results and insights with key stakeholders, including senior leadership, to promote transparency, accountability, and continuous improvement.
In conclusion, tracking the right HR metrics provides invaluable insights into your organization. By doing so, you can identify areas of improvement, optimize your workforce, and ultimately drive greater business success. A data analytics company can help you harness the power of HR metrics by deploying data-driven solutions.
Let’s unlock the full potential of your HR data together.