5 Best HR Metrics To Improve Strategic Business Objectives
At Helios, we are constantly looking for ways to help our clients grow their business by attracting, retaining, and developing exceptional talent. One way to improve operations is through analyzing a company’s human capital data. Through the use of HR metrics, an organization is provided with insights for how to effectively streamline the management of their human capital with business goals and objectives.
HR metrics point out opportunities for improvement in terms of how the Human Resources department is supporting the business and meeting the needs of the employees. By identifying strengths and weaknesses within a company, HR metrics have proven to be a great tool for assessing the current state of a business, predicting future performance, and formulating strategies for growth and improvement.
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Here are five of the best HR metrics to help you to improve your business and streamline your strategic objectives:
1. Employee Satisfaction
While this is one of the more difficult metrics to gauge, understanding and analyzing employee satisfaction is vital to employee engagement and business performance. Measuring employee satisfaction, and then taking the necessary steps to increase it, is essential to attracting and retaining, and engaging the high quality talent that is needed to drive a successful business. Satisfaction metrics can be measured through employee engagement surveys.
2. Turnover Costs
Do you know how much money you lose each time an employee separates from your organization? There are significant costs to the business every time an employee leaves. The costs of recruiting external candidates, productivity losses due to vacant roles, and training new employees can really add up. When calculating turnover costs, some expenses, like the cost of job advertising or COBRA continuation, are easier to determine than others. Productivity loss and employee morale issues may be more challenging to determine, but are essential for understanding the effect of employee turnover on your business.
3. Quality of Hire
In addition to cost per hire, which tells you how much it costs your company when you hire a new employee, the quality of hire metric is even more important. While it is not an easy metric to determine, it provides a great deal of insight into your recruiting function. To calculate quality of hire, take a look at the average job performance rating of your new hires, the percent of new hires reaching satisfactory productivity within a standard time frame, the retention of new hires after one year, and the amount of recognition that new hires received.
4. Turnover Rate Differences Between High and Low Performers
Compare employee separations of high performing and low performing employees by looking at their performance review ratings. Evaluating the turnover differences between your high and low performers will help you to determine if there are any evident patterns that should be addressed. For example, are a good percentage of your high performers leaving?
5. Employee Evaluation Rating Compared to Salary
In order to stay one step ahead of your voluntary separations, and reduce your turnover costs, consider measuring the performance ratings of your high performing employees against the average salary for their position. Ensuring that your top performing employees are paid above the average market salary for their position will help you to stay competitive and retain your high performers.