HR metrics examples in recruitment
1. Time to hire (time in days)
An important metric for recruitment is the ‘time to hire’. This measures the number of days between a candidate applying for a job, and them accepting a job offer. Time to hire gives insights into recruiting efficiency and candidate experience.??
Recruitment efficiency measures the speed at which HR processes a candidate – assessment, interview, and role acceptance. If your organization has a long time to hire, it reflects that your processes are inefficient. Having a long time to hire, reflects on candidate experience. Candidates may drop out of the recruitment process if it is long. Wouldn’t you rather wait two weeks than two months to start a new job? The best candidates are in demand and do not need to wait.?
2. Cost per hire (total cost of hiring/the number of new hires)
Like the time to hire, the ‘cost per hire (CPH)’ metric shows how much it costs the company to hire new employees. This also serves as an indicator of the efficiency of the recruitment process.
Cost per hire can be time-consuming to work out. There used to be a huge variation in how companies calculated this metric until The Society of Human Resource Management and the American National Standards Institute?agreed on a standard formula.
CPH can be calculated by adding together internal recruiting costs, and external recruiting costs, divided by total number of hires. The costs and number of hires will both reflect a selected measurement period – such as monthly, or annually.
3. Early turnover (percentage of recruits leaving in the first year)
This is arguably the most important metric to determine hiring success in a company.
This early leaver metric indicates whether there is a mismatch between the person and the company or between the person and his/her position. Early turnover is also very expensive. It usually takes 6 to 12 months before employees have fully learned the ropes and reach their ‘Optimum Productivity Level’. According to?a 2018 Glassdoor survey, the average cost of employee turnover in the UK is ￡11,000 per person.
4. Time since last promotion (avg time in months since last internal promotion)
This rather straightforward metric is useful in explaining why your high potentials leave.
HR metrics examples related to revenue
5. Revenue per employee (revenue/total number of employees)
This metric shows the efficiency of the organization as a whole. The ‘revenue per employee’ metric is an indicator of the quality of hired employees. Check this?Business Insider article?to view how the top 12 tech companies in the world score on this metric.
6. Performance and potential (the 9-box grid)
The?9-box grid?appears when measuring and mapping both an individual’s performance and potential in three levels. This model shows which employees are underperformers, valued specialists, emerging potentials, or top talents. This metric is great for differentiating between, for example, wanted and unwanted turnover.
In another article, we wrote about the?qualitative and quantitative ways to measure employee performance. Metrics include Net Promoter Score, management by objectives, number of errors,?360-degree feedback, forced ranking, etc.
7. Billable hours per employee
This is the most concrete example of a performance measure, and it is especially relevant in professional service firms (e.g. law and consultancy firms). Relating this kind of performance to employee engagement or other input metrics makes for an interesting analysis. Benchmarking this metric between different departments and managers/partners can also provide valuable insights.
This metric also relates to?employee utilization rate, which refers to the amount of working time employee is spending on billable tasks.
8. Engagement rating
An engaged workforce is a productive workforce. Engagement might be the most important ‘soft’ HR outcome. People who like their job and who are proud of their company are generally more engaged, even if the work environment is challenging and pressure can be high. Engaged employees perform better and are more likely to perceive challenges as positive and interesting. Additionally, team engagement is an important metric for a team manager’s success.
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Other HR metrics examples
9. Cost of HR per employee (e.g. $ 600)
This metric shows the cost efficiency of HR expressed in dollars.
10. Ratio of HR professionals to employees (e.g. 1:60)
HR to employee ratio?is another measure that shows HR’s cost efficiency. An organization with fully developed analytical capabilities should be able to have a smaller number of HR professionals do more.
11. Ratio of HR business partners per employee (e.g. 1:80)
A similar metric to the previous one. Again, a set of highly developed analytics capabilities will enable HR to measure and predict the impact of HR policies. This will enable HR to be more efficient and reduce the number of?business partners.
12. Turnover (number of leavers/total population in the organization)
This metric shows how many workers leave the company in a given year. When combined with, for instance, a performance metric, the ‘turnover’ metric can track the difference in attrition in high and low performers.
Preferably you would like to see low performers leave and high performers stay. This metric also provides HR business partners with a great amount of information about the departments and functions in which employees feel at home, and where in the organization they do not want to work. Turnover is very useful data to know when shaping recruitment strategies.?Additionally, attrition could be a key metric in measuring a manager’s success.
For a deep dive into?how to calculate employee turnover, click the link!
13. Effectiveness of HR software
This is a more complex metric. Effectiveness of, for instance, learning and development software are measured in the number of active users, average time on the platform, session length, total time on platform per user per month, screen flow, and software retention. These metrics enable HR to determine what works for the employees and what does not.
14. Absenteeism (absence percentage)
Like turnover,?absenteeism?is also a strong indicator of dissatisfaction and a predictor of turnover.?Absenteeism rate?can give information to prevent this kind of leave, as long-term absence can be very costly. Again, differences between individual managers and departments are very interesting indicators of (potential) problems and bottlenecks.
HR metrics examples in key areas of business
Human Resource metrics are measurements that help you to track data across the HR department and the organization. The most important areas are listed below. In this list of HR metrics, we included the key HR metrics examples associated with those areas.
Organizational performance
HR operations
Process optimization
Process optimization helps to analyze how we do what we do in Human Resource Management. The HR?metrics and analytics?in this area focus on changes in HR efficiency and effectiveness over time. These HR metrics and analytics are then used to re-engineer and reinvent what is happening in HR. This helps to optimize the Human Resource delivery process. Process optimization metrics are next-level. They are still very rare in modern organizations as they require a very high level of both data maturity and analytics maturity.