10 Important HR Metrics: What Analytics Should HR Be Tracking?
- October 7, 2022
- Posted by: Chukwuyem Mokwunye
- Categories: For Employers, General, HR
At Proten International, we believe HR metrics are the best key performance indicators (KPIs) for keeping track of and managing an organization’s staff. The success of an organization depends on how well its employees do their jobs. So, every company should use HR metrics to keep track of how well employees do their jobs and make sure they are doing them.
The HR metrics could also be used by HR departments to show their executives how valuable their business is. Finding the right person for the job is one of the hardest things that HR departments have to do.
What are the most important analytics that HR should be measuring and tracking?
Proten as an HR organization that performs several services cut across the HR field, here are 10 important HR metrics we suggest you should be tracking:
1. Revenue per employee
The amount of money each employee brings in is one of the most important metrics that HR should measure and keep track of.
Income per employee = Total income divided by the number of employees.
This indicator shows how well the company is doing as a whole. The “revenue per employee statistic” shows how well the people who are hired are doing their jobs. It gives an estimate of how much a company makes per employee. So, the first item on the list of HR analytics should be revenue per employee.
2. Employee Loyalty
Companies must give considerable benefits to maintain and recruit personnel with changing priorities. Because of changing goals, losing talent to a competitor with better offers is simpler. Cultivate employee loyalty.
First, set a benchmark and compare your company’s performance to rivals. Most firms employ internal boosters vs. critics as a starting point.
Good indications and questions for using this strategy are:
- How can we earn your trust?
- How satisfied are you with your job?
- What’s your take on our brand?
By asking such questions, you may measure client loyalty more accurately and easily.
3. Benefits Usage
Given the pandemic, societal instability, and other worldwide concerns, firms have expanded workplace perks to meet the requirements of their varied employees. Individuals, communities, and organizations have been affected in recent years. Intentional organizations provide workers with a comprehensive benefits package. In recent years, more companies have offered flexible/unlimited paid time off, mental health services, and financial assistance.
Leaders must examine the utilization and effect of these enhanced resources on staff retention and wellness. Evaluating benefit consumption will highlight in-demand resources and underutilized resources owing to communication, service delivery, seasonality, or another reason.
4. Employee Satisfaction
Employee Satisfaction is one of several indicators that HR should track and monitor because it is a crucial one. Overall employee and organizational happiness may be measured by counting the number of workers who would suggest your firm as a great place to work and keeping track of the number that wouldn’t.
5. Headcount Net Balance
People are an organization’s lifeblood, so it’s important to evaluate gains and losses in the workforce. Headcount net balance adds new employees and subtracts terminations from the beginning headcount. This may be expanded by gender, function, job, etc. Consider moves (e.g., transfers, promotions, demotions, etc.). The headcount net balance waterfall chart is the greatest way to measure net growth or shrinkage in a company.
6. Employee Engagement
Employee engagement is one of the most important metrics that HR should measure and keep track of. Employee engagement is a way to measure how connected and interested employees are in their work and their company. Companies should use a measure that works best for their business, but measuring employee engagement can tell a lot about how connected employees feel to their work and the company at large. Additionally, A high level of engagement has also been linked to better performance results, so keeping track of this metric can help you spot problems early and fix them.
7. Employee Retention
Even if employees’ wages go up by a small amount, their real purchasing power is going down because of inflation. For many, the only way to get a real increase in their income is to switch jobs. With a competitive job market, it will likely be much more expensive to replace them, and there may be pay differences that cause even more long-term employees to quit.
Employers can determine this by referring to one metric: the YOY percent change in median base pay when comparing new hires (with less than a year of service) to long-term employees (with more than a year of service). If new hires are paid more than the inflation rate and employees who have worked there for a long time are paid less, this downward spiral is more likely to start. Before this cycle starts, use this knowledge to open the eyes of leaders, make smart targeted changes to compensation, and use other levers to improve retention.
Turnover is one of the most important HR metrics. Turnover isn’t just about keeping track of how many people leave. It’s also about figuring out why and where people leave, which will let you make a targeted, actionable plan.
When you take a close look at your turnover numbers, you can learn important things about the connections between employees who are leaving and the reasons why, such as position, management, pay, tenure, performance, work-life balance, etc. After finding these risk factors, we can figure out who is likely to leave in the future and put them into risk groups that leaders can watch more closely.
By understanding the many factors that affect employee turnover, we can take advantage of the opportunities and engage employees through actionable and targeted plans. This makes turnover a must-have data point for HR teams.
9. Engagement After Candidates Apply
I’ll provide a less clear response than the number of qualifying applications. That’s how engaged recruiters and hiring managers are with quality applications. Depending on the role’s severity, the recommended practice is one to three business days.
Creating an internal procedure to monitor when recruiters contact prospects, when hiring managers interview them, and when the preferred candidate is offered a job. This will reveal inefficient places where outstanding prospective workers are lost.
10. Employer Commitment to Employee Needs
Lastly, preventing and avoiding difficulties is important. The Great Resignation revealed how miserable our coworkers were. Organizations have asked individuals to bring their “true selves” to work, we must create an environment that reflects and supports such statements. With doing the work comes evaluating how we are performing in this area and asking difficult questions such as how are we supporting our employees through trauma/traumatic events?
How successfully do we let workers be themselves? Asking challenging questions garners greater feedback and demonstrates our interest in doing better. Our input and engaging our staff to produce better ideas demonstrate our commitment to doing better.
In conclusion, we believe that these HR metrics would have a different impact on different organizations. Also, we know not all organizations have the same capacity to utilize all the needed HR metrics Proten has compiled.
Kindly, leave a comment if we have missed any key HR metrics that could be measured.