HR Benchmarking: Top 10 Metrics
How does your company stack up? How well is your HR function serving your company’s strategic objectives?
If you are like MOST small businesses, you’ve got a decent idea, but when really pressed, you don’t KNOW with true certainty, and that can cost you thousands if not tens or hundreds of thousands. Here are the top ten HR Metrics to use as your baseline for planning and strategy development.
Cost Per Hire – This is one of the most commonly used HR metrics, and I’m willing to bet that most of you don’t calculate it, or even know how to calculate it in a real world application. This number helps you with workforce planning and planning, managing labor costs, and in many other areas of your business. Even if you have a well-defined process, depending on the position, this can be a large number when you account for all internal and external costs.
Revenue Per Employee – Assuming you know your total annual revenue, this one is easy to calculate and tells you how much your employees are making the company.
Absence Rate – Depending on your time and attendance system, this could be a headache or exceedingly simple to calculate and can be an indicator of several things including management effectiveness and employee satisfaction levels.
Benefit Costs – We all offer benefits for one simple reason – to attract and retain quality talent that will make us more money.
Satisfaction – The can be difficult to gauge, especially if you think you already know everything about your employee’s level of satisfaction. More satisfied employees are more productive, making you more profitable. Noticing a trend here?
Turnover – This metric is straight forward and gives you a good idea about the pulse of the organization and can be an indicator of several other underlying issues and liabilities.
Tenure – Conversely, this number tells you the average length of time your employees have been with the company. Generally, the longer the tenure, the better off you will be, but there are pitfalls to avoid if you have looooong time employees in place.
Turnover Cost – When accurately calculated, this number almost always shocks business owners. It will show you how much it costs you when you lose an employee based on separation costs, vacancy costs, new hiring costs, and training costs. Taking strategic actions to minimize your turnover costs has a clear impact on increasing your profitability.
Workers’ Comp – This is actually two metrics, by focusing both on the incident rate and severity as well as the premium costs, you have several tools in hand that will help with strategic planning and labor cost management.
Time to Fill – How efficient is your hiring process? This has a direct impact on several other metrics.
There are myriad other metrics that can be used to support your strategic planning decisions. An investment in a HRO system like Windsor’s will pay for itself quickly once you have the clarity provided through analytics and support from a team of experts with decades of experience in the HR realm.
If you would like help turning your HR function from an expense into a strategic asset designed to drive profitability, contact us at firstname.lastname@example.org or 800.297.4962.