Numbers speak louder than words, especially when it comes to tracking performance and making strategic decisions that drive growth. So, the question becomes: What numbers should HR teams focus on?
The most important human resources metrics are the ones that tie into the company’s high-level goals and bottom-line numbers. Executives want to get a pulse on the company culture, they want to know how efficiently the HR department works, and they want to know where revenue is being lost and where it could be gained.
Here are some HR metrics examples that speak to executives.
1. Turnover Rates
The number of employees who left the company within a given timeframe, quarterly or yearly, divided by the total number of employees. Replacing employees—especially top performers—is very costly, so it’s crucial to know which departments or managers experience the most turnover, and which departments/managers have the highest retention rates.Replacing employees—especially top performers—is very costly. Click To Tweet
2. Early Turnover Rates
The percentage of employees who left the company or were terminated within their first 6-12 months. Early turnover usually indicates a failure within the recruiting and hiring process. Replacing a new employee sets back an already expensive process; lost productivity during new hire training costs nearly $44,000 over the employee’s first year.
3. Time to Hire
The time that it takes the HR team to fill a position—from the date an employee leaves the company to the date that a new employee starts. It’s important to track and compare the time-to-hire across different positions to determine why a specific role was harder or easier to fill.
4. Revenue Lost Due to Position Vacancy
The total revenue that’s lost within that time-to-hire window. This is one component of the total cost of replacing an employee and another indicator of the HR team’s efficiency in filling open positions.
5. Cost Per Hire
The total cost of hiring a new employee, factoring in recruitment, lost revenue, training, and onboarding. Knowing this HR metric can help you to set a recruiting budget, identify inefficiencies, and project costs moving forward.
6. Number of Applications Per Position
How many qualified candidates applied for each open position? This metric illustrates the strength, or weakness, of the company’s brand and its desirability to potential hires, as well as the outreach efforts of recruiters.
7. New Employee Performance
Performance metrics will give you a picture of how a new hire is progressing throughout the onboarding process, while helping you to identify top talent and assess how the new hire’s performance compares to the rest of their department.
8. Revenue Per Employee
The company’s total annual revenue divided by the number of full-time employees. Revenue-per-employee is a great metric for assessing the overall health of your company YoY; quality new hires should generate higher revenue than their predecessors.Revenue-per-employee is a great metric for assessing the overall health of your company. Click To Tweet
This metric is also a good tool to compare against other organizations—even if there are size or revenue differences, you want your revenue-per-employee numbers to align with or exceed your competitors.