Cutting-edge companies like Google have uncovered amazing insights and radically improved their businesses by applying a more data-centered approach to HR. Interview processes have been revamped, manager development re-imagined, and training repackaged. It's all incredibly impressive.
But if you're don't have the scale (or pocketbook) of Google it can also seem totally out of reach. Don't you need buildings full of some the country's biggest brains and months if not years to devote to data collection and analysis to gain benefits to your business?
Nope, suggests a new post on Google's consistently fascinating Re:Work blog, which shares HR insights for all to use. Recently Re:Work pointed readers to a guide from HR software company Namely that promises to show how even much smaller businesses can track and utilize key HR metrics. It's essential an idiot's guide to data-driven HR, and it makes things so simple there's no excuse not to give the approach a shot.
The guide suggests there are six essential metrics every business big enough for an HR department can and should track. Here's Google's summation:
Turnover rate = (# voluntary and involuntary terminations ÷ average headcount) x 100. Not to be confused with attrition (another metric used to track employee departures), turnover looks at the number of employees who leave in a period of time with roles that the company intends to replace. This metric can be a useful indicator of your organizational culture, health, and finances.
Average time to fill = sum of all roles' time to fill ÷ total # of openings filled. Knowing the length of time it takes to fill a position can help you assess the efficiency of your recruiting process.
HR-to-employee ratio = (HR team headcount ÷ full-time employee headcount) x 100. The size of your HR group might vary depending on the overall size of your company -- smaller companies invested in growth (and therefore need to hire a lot) will most likely have bigger HR teams relatively than larger companies. A high ratio can suggest your team is either over-specialized or technologically underserved, while a low ratio can indicate that your HR team is understaffed.
Career path ratio = total promotions ÷ (total transfers + total promotions). Although employee movement is multidirectional, many people fixate on promotion. This metric can help break out your various career ladders by measuring how many internal moves are promotions versus lateral transfers across different departments and specialties.
Revenue per employee = annual revenue ÷ full-time employee headcount. Use this metric to determine how over or understaffed your organization might be by examining the growth of your revenue over time.
Employee net promoter score (eNPS) = % promoters - % detractors. Inspired by a survey used to gauge customer satisfaction, eNPS is used to understand employees' overall engagement. Employers can annually survey their employees to calculate their eNPS. Using a 10 point scale on questions like "I would recommend my workplace to others," employees with 9+ ratings are generally considered promoters, while those with ratings ranging from 0-6 and 7-8 are labeled as detractors and passive, respectively.
Intrigued? Check out the complete guide here for a much deeper dive.