What HR Metrics Should Your Company Be Tracking?
HR metrics are a specific set of figures that measure the performance of an organization’s HR function. There are many different metrics, but what are the important ones and how do you make sense of them?
One of our 2021 blogs discussed two important HR metrics – turnover rate and retention rate. Click here to read up on those two metrics which remain top on the list of statistics to know and analyze for your company.
The Society of Human Resource Professionals (SHRM) recommends that HR professionals also track the following additional four metrics.
This is the number of days from when a candidate applies for a job, or is contacted by a recruiter, to when the individual accepts an offer. This figure can be displayed as a per-person average.
Time-to-Hire averages will vary by industry and by level of position so there is not a standard you should necessarily be shooting for, but it’s important to know what your company’s number is. Time-to-hire for entry-level positions is normally less than for management roles.
If your company is frequently losing good candidates to other job offers, it could be time to look for bottlenecks in the recruiting and hiring process.
- Are hiring managers making it a priority to evaluate candidates?
- Are candidates being interviewed in a timely manner?
- Are there too many interviews in your hiring process, or are they spread too far apart?
Benefits Participation Rate
Tracking which of your benefits offerings are being utilized is useful in two respects – ensuring that employees’ needs are being met and that the company’s money is being spent wisely and on the right benefits.
Formula: divide the number of employees enrolled by the number of employees eligible, then multiply by 100 to get a percentage.
Consider surveying your employees about what benefits are most important to them. Offering personalized benefits, as much as is feasible, can be very effective in retaining current employees and attracting qualified candidates.
Companies should regularly assess employee satisfaction – how happy employees are with the work they do and the organizations they work for.
There are outside companies that can conduct objective surveys on behalf of the company, or companies can simply use the tool “Employee Net Promoter Score” to survey their own staff. To calculate that number, first ask employees how likely they are, on a scale of 0 to 10, to recommend the organization as a good place to work. Then subtract the percentage of “detractors” (employees who choose 6 or below) from the percentage of “promoters” (employees who choose 9 or 10). A score between 30 and 50 is considered good.
Employees should be encouraged to provide comments that back up their ratings. HR and management should strive to respond and act on the findings to increase employee satisfaction levels which have a direct correlation with employee turnover and retention rates.
As companies strive to foster cultures that reflect a commitment to diversity, equity, and inclusion, many are tracking their progress in hiring a diverse workforce.
Gender and racial diversity can be measured as a percentage of the overall employee population, or it can be reported as a ratio comparing, for example, males to females or white employees to nonwhite employees.
Once employees are on board, it’s useful to capture qualitative diversity data around employee experiences. These types of insight are best attained through discussions and surveys to identify if employees are having different experiences in processes that should be equal such as promotions, average salary, and other areas.
As the saying goes – “Numbers don’t lie”. HR metrics can provide critical data to help companies make positive changes in their company culture and hiring and retention objectives. When companies consistently track the same metrics over time, the numbers will tell their story.
SHRM’s HR Week, 7/23/2023. “5 Key HR Metrics to Track”, by Kate Rockwood, May 31, 2023.
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