It also can track key metrics that provide vital insights to help you make better human capital decisions and process improvements to realize their full potential.
Here are 11 essential HR metrics, from the Society of Human Resource Management (SHRM), that will help you manage your best asset.
1. Time to Start (Average time it takes to fill a position)
Time to start is calculated by taking the total days positions are open and dividing them by the number of positions filled.
This metric can provide insights on the effectiveness of your employment brand, marketing efforts, and application process. "High" numbers can also provide perspective on your interviewing process. You may have too lengthy of an application process, too many interviews, or a weak candidate experience.
2. Time to Productivity (Average numbers of days to satisfactory productivity)
Time to productivity is calculated by taking the number of days between the new employee's start date and the point at which he or she reaches satisfactory productivity and dividing it by the number of positions filled.
This metric is a vital indicator of how well your onboarding program is performing. Also, outcomes can be an indication of the quality of your recruitment process and the caliber of the applicants you're attracting.
3. Turnover Rate (Rate at which employees are leaving the organization)
Turnover rate is calculated by taking the number of departures during a specified period (a year, quarter, or month) and dividing it by the average number of employees during the same period, and then multiplying by 100.
When focused on a target group (e.g., high performers, Millennials, low performers, or critical positions), this metric provides insights into the effectiveness of your performance management, development, or culture initiatives.
4. Cost Per Hire (Average cost incurred with a new hire)
Cost per hire is calculated by taking the cost (marketing spend, recruiter fees, or relocation costs) and dividing it by the number of new hires.
Too high of an external cost could be an indicator that you need to invest in internal recruiting resources such as training or technology, hire an extra recruiter, or reevaluate the mediums you've selected to market your positions.
5. Acceptance Rate (Percentage of candidates who receive offers and accept)
Acceptance rates are calculated by dividing the total number of candidate acceptances by the number of offers extended, and then multiplying by 100.
This number will let you know if you need to improve your candidate experience, benefit packages, or the competitiveness of your offers.
Learning and Development
6. Readiness (How ready the organization is from a human capital perspective to execute the business strategy)
Readiness is calculated by taking the total number of vacant positions divided by the total number of approved positions and then multiplying that number by the total number of employees with desired competency ratings divided by the total number of employees who have received a competency assessment. Then multiplying the answer by 100. Let me simplify: (Vacant Positions/Total Positions) x (Employees With Desired Competency Rating/Total Assessed) x 100.
SHRM recommends you only perform this calculation for key roles. It's a vital metric for determining whether your workforce is aligned with your business trajectory.
7. Training Participation Rate (Percentage of employees participating in development opportunities)
Training participation rate is calculated by dividing the number of employees who participated in a training opportunity by the number of employees who were eligible, and then multiplying by 100.
Results will help you determine if you're offering the "right" type of training, if you're using the best delivery medium, or if you've effectively communicated the opportunity.
8. Average Performance Rating (The average performance rating for a selected group of employees)
The average performance rating is calculated by dividing the sum total of all performance ratings by the number of employees who received a rating, and then multiplying by 100. I would suggest taking this number and comparing it against a larger distribution.
Tracking this metric will let you know if your performance management programs are working effectively and if any teams are falling behind the curve.
9. Benefit Participation Rate (Percentage of employees participating in a particular benefit plan or program)
Benefit participation rates are calculated by dividing the number of employees enrolled in a plan or benefit by the number of employees eligible, and then multiplying by 100.
Every employer benefit comes at a cost. If employees aren't using some of them, then cut ties and move on. Reinvest the money into plans that are more widely used.
10. Employee Engagement (Degree to which employees are engaged with and committed to the strategy and objectives of their organization)
Calculating engagement is tricky. Most organizations invest in a third-party resource that typically includes an extensive survey -- it's worth it. A high level of engagement is a critical trait found in high-performing organizations.
11. Workers' Compensation Claims (Measure of workplace safety)
Analyzing your workers' compensation claims (amount and cause) will ensure you provide and maintain a safe working environment for your employees.