8 Key HR Metrics SME Must Track

There are some data that the HR needs to track, so they'll know how your organisation's doing. These data are known as HR metrics.

 

What are HR Metrics?

HR metrics are key numbers that help companies track their human capital. They also measure how effective their human resources initiatives are—for example, turnover rate and cost-per-hire. 

When HR managers measure this kind of data, they will find out which aspects of the organisation that are doing well or need improvement, and what trends to expect in the future. All of this helps organisations figure out their people strategy. 

 

1. Vacancies

It can be hard for HR to know about current and upcoming vacancies when the ones who are responsible for recruiting for their teams are line managers. But, there are good reasons why it's a figure that HR needs to know. Staff needs to be inducted, trained and supported. If HR isn't informed, it will be a waste of time and money. 

One way to manage recruitment effectively is to have a clear view of future recruitment requirements. Here's how HR can help:

• HR can negotiate better rates with recruitment agencies.
• HR can make use of HR software that posts vacancies online and to free job boards.
• HR can save time by streamlining the candidate selection and communication process.

Please make sure the metrics you're tracking can help the organisation reach its goals.

2. Time and cost to hire

Every employer wishes that the recruitment process can be as quick and cost-effective as possible. They also want their candidate to perform well. These are the three essential parts of finding out the time and cost to hire:

• The cost of filling each position
• The route you used to recruit them
• How long it took to fill the position

As new employees get hired, find out how quickly they adapt and settle in with the team. With employees that come through agencies, you should have a system that prompts for regular performance checks. This way, you will know early on if the new employee isn't the right fit.

 

3. Absences

Unplanned absences affect the business. Most absences are genuine, but you should always be on the lookout for employees who are taking advantage of the system. 

If you can track absences correctly, and map them against different areas of the organisation, you will have the metrics you need to find out if you have a problem, and if so, what you can do to solve it. 

It's also useful to know how many days of holiday entitlement employees have 'in hand' at any time. Two reasons why: it affects resourcing, and it helps with financial reporting. 

 

4.  Performance

The best way to help everyone focus on growing people and the business is to set specific development and performance goals. But, if employees and their managers don't track their goals or progress, performance management initiatives will lose its purpose. 

When you have a clear view of goals and progress against employees, it means that you will be better positioned to provide help. If development planning is part of the performance review, then it's crucial that HR is aware of what has been suggested or agreed, and can easily report on delivery and outcomes too. 

 

5. Compliance

HR is responsible for a wide range of employment problems. Depending on the industry you're in, there will be essential facts and data that you need to understand.

One example is health and safety.

• Do you know how many of your staff have mandatory training requirements, or critical training that is up for renewal?
• Can you easily track health and safety incidents and look for patterns?
• Who is responsible for risk assessment, and when was it last carried out?

Tracking employee costs will help the organisation in managing its finances and budgeting.

6. Employee costs

HR needs to know how much they invest in their employees—for example, salaries, benefits, bonuses, compensation and training.

This baseline allows HR to estimate the cost of unplanned absences, staff development and new hires, as well as model the impact of a potential pay increase.

 

7. Headcount

Did you know that there are companies that don't know how many people they employ? Some departments even have different definitions of headcount. Should you include temporary staff or not?

If all departments don't have a shared definition and the right baseline figures, it makes it hard to trust any of your other metrics. For example, if you manage contractors in a different way to permanent staff, the right move is to add them to your HR system. That way, you can run headcount reports with, and without, these staff. It will be easier to understand the 'real' resourcing needs and employment costs. 

It's also easier to keep track of key info such as:

• When contractual periods end,

• The training you've had to provide,

• Previous experience,

• Or how to contact them if you have to.

 

8. Turnover rate

Employees will inevitably leave. When you regularly track who's quitting and who's joining, you might notice potential issues before they become a big problem. 

A 5% or 10% turnover rate may be suitable for your industry, but if there's a sudden spike of turnover from a specific department, it may indicate there's a problem that needs to be addressed. 

 

A human resources department's work is vital to the organisation's success. But without measuring and tracking the HR metrics that matter, it can be hard to pinpoint how your work makes a difference or how you can improve your efforts.

If you aren't measuring any HR metrics, you should talk to your executive and HR team to identify what data you should be tracking to help your organisation reach its goals. Start simple; no need to track all of these data right away. 

Want to learn more about AJobThing and how we help SMEs hire? just click here!

Source: Cezanne HR

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