Are you Struggling to manage and calculate your organisation’s data effectively? We have the perfect solution for you!
With the right HR metrics and measurements, managing your employees becomes easy, and it can be more robust to show areas where you can improve and meet the requirements of your organisation and employees. You can also create meaningful reports that will help you to make decisions for your department and organisation.
In this blog, we have listed 20 common HR metrics and their formulas that you can use, spanning compensation, engagement, training, retention, payroll, performance, and others that can provide insight into your performance.
Here is what we are covering:
What are HR metrics?
HR metrics measure the efficacy of HR roles and responsibilities, such as recruitment, training, retention, labour cost, and more.
What are the benefits of using HR metrics?
The following are the benefits of using HR metrics, which help to review the workforce data so that you can measure the effectiveness and improve it accordingly.
- Minimise compliance risks related to overtime, minimum wage, exempt vs. non-exempt classification, payroll-based journal, Family Medical Leave Act, and the Affordable Care Act.
- It helps Improve the ROI concerning the HR plan, such as performance, financial planning, engagement, etc.
- Helps to improve employee resource allocations, compensation, scheduling, recruitment, and others.
- It helps to develop the team makeup, benefits policies, time off policies, location and additional shifts, and other policies.
20 common HR metrics and their formulas
The following 20 common HR metrics and their formulas are there that you can follow to predict the strength and vulnerability of your current strategy. And along with this, you can save time.
But before following the metrics and formulas, you need to consider and analyse when using hr metrics includes, such as what data needs to be gathered and calculated, what metrics are necessary to the organisation, how you can analyse to use for development, planning, decision making, and problem-solving, how will be analysed the data and set the benchmark.
Let’s see what the basic formulas are for HR.
|Absenteeism||1. Individuals Absent rate = (No.of absent days / no. of working days in a month)* 100
2. Team Absent = (No. of absent days / average no. of employees) * 100
|Employee’s unplanned absence due to some emergency, sickness, or any other reason.|
|Cost of employee, program, or benefits||The total cost of employee, program, or benefits / total number of employees||The number of employees who participated in the program and got the benefits from the organisation, such as rewards, recognitions, and others.|
|Turnover Rate||Total Turnover Rate = (No. of the left employee during the specific time / No. of remaining employee specific time) * 100||The percentage of employees who left the organisation includes voluntary resignations, retirement, dismissal, and non-certificate.|
|Retention Rate||Employee Retention Rate = (No. of employees staying across the time period / No. of employees at the start of the period) * 100||Percentage of the employees who remained on employees from the beginning to the End of a period.|
|Cost Per Hire||Cost per hire = Internal + external / Total no.of recruitment||The average amount that you have spent on recruits in a specific period.|
|Revenue Ratio||Revenue Ratio = Annual revenue / no. of employees||It measures how much profits are generated by the employees.|
|Employee satisfaction||Employee satisfaction = (score sum / 3) – 1) / 9 X 100||It is calculated to improve their work environment, culture, retention, productivity, and others. Based on the following factors – how satisfied employees are, how well your current workplace perform and meet your expectation,
and How close you are to your ideals at your workplace.
|Return on Investment||(ROI) = (Net revenue – total costs) * 100||It reflects the financial value of the workforce as a result of the amount spent on the employee.|
|Employee training hours||Employee’s training hours = total training hours / no. of total employees * 100||It shows the average number of hours required to train the employees because it helps find accurate data to understand the training effectiveness.|
|Employee training cost||Employee’s training costs = Total training costs / no. of total employees * 100||It shows the total costs your organisation spent on employee training.|
|Time to hire||Total no. days taken to fill the position / total number hired||It shows the average days to recruit a candidate for a job role. Starting days of hiring are when the job role is approved, and the ending date and first date are when the candidate starts the job role.|
|Tenure||Length of the time period an employee has served an organisation.||Basically, job categories are short and long to measure the essential criteria for hiring a new employee.|
|Turnover costs||Total turnover costs = Total cost of Termination + Replacement + Vacancy + Training||You can analyse the hiring practice that can help you to incorporate accurate data and calculations to generate the turnover costs.|
|Benefits Rate||Total no. of employees utilising benefits / total no. of eligible to utilize benefits * 100||It identifies the total number of employees who enrolled in specific benefits through the company.|
|Utilisation Rate||Utilisation Rate = employee’s total billable rate / total available hrs * 100||It measures the total billable hours per employee and is a common practice that provides the service.|
|Worker’s compensation Cost per employee||Cost per employee = Total worker’s compensation cost for the year / average number of employees * 100||you can determine the cost efficiency of workers’ compensation.|
|Employee referral||Employee referral = Total no. of referrals recruited / no. of vacant jobs resulting in referrals||You can offer an employee referral program and track its success.|
|Overtime Rate||Overtime Rate = (overtime payment / total payroll) * 100||Analyse the organisation’s overtime percentage so that you can easily maintain an appropriate schedule.|
|Workers’ compensation incidence rate||Workers’ compensation incidence rate = (no. of injuries or illness per 100 full-time employees ∕ total hours worked by all employees during the year) * 200,000||It helps to analyse the common base and a specific time involved that rates can help to measure both the problem areas and develop in preventing work-related injuries and illnesses.|
|Yield ratio||Total percentage of applicants from the recruitment moving from one level to another level of the selection process.|
This ends our discussion on 20 common HR metrics and their formulas. Let’s know your other questions and opinions on this topic. Mention below the comment box.
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