HR Metrics
Absence Rate [(# days absent in month) Measures absenteeism. Determine if your
company has an absenteeism problem. Analyze
÷ why and how to address issue. Analyze further for
effectiveness of attendance policy and
effectiveness of management in applying policy.
(Ave. # of employees during
mo.) x (# of workdays)]
x 100
Cost per Hire (Advertising + Agency Fees + Costs involved with a new hire. Use EMA/Cost per
Employee Referrals + Travel Hire Staffing Metrics Survey as a benchmark for
cost of applicants and staff + your organization which is available on the
Relocation costs + Recruiter pay SHRM.org Web site. Cost per Hire can be used as
and benefits) a measurement to show any substantial
improvements to savings in recruitment/retention
÷ costs. Determine what your recruiting function can
do to increase savings/reduce costs, etc.
Number of Hires
Health Care Total cost of health care Per capita cost of employee benefits. Indicates
Costs per cost of health care per employee. Go to
Employee ÷ www.bls.gov for benefit data from the Bureau of
Labor Statistics (BLS). See BLS's publications
entitled Employer Costs for Employee
Total Employees Compensation and Measuring trends in the
structure and levels of employer costs for
employee compensation for additional information
on this topic.
HR expense HR expense HR expenses in relation to the total operating
factor expenses of organization. In addition, determine if
÷ expenditures exceeded, met or fell below budget.
Analyze HR practices that contributed to savings,
if any.
Total operating expense
Human Capital Revenue - (Operating Expense - Return on investment ratio for employees. Did
ROI [Compensation cost + Benefit organization get a return on their investment?
cost]) Analyze causes of positive/negative ROI metric.
Use analysis as opportunity to optimize
÷ investment with HR practices such as recruitment,
motivation, training and development. Evaluate if
HR practices are having a causal relationship in
(Compensation cost + Benefit positive changes to improving metric.
cost)
Human Capital Revenue - (Operating Expense - Value of workforce's knowledge, skill, and
Value Added [Compensation cost + Benefit performance. This measurement illustrates how
Cost]) employees add value to organization.
Total Number of FTE
Prorating Number of months actually The basic steps to calculating an employees’ pay
Merit worked increase appropriate to the period of time worked.
Increases
÷
number of months under the
current increase policy
increase percentage the person
would otherwise be entitled to
Revenue Revenue Benchmark to indicate effectiveness of company
Factor and to show employees as capital rather than as
÷ an expense. Human Capital can be viewed as an
investment.
Total Number of FTE
Time to fill Total days elapsed to fill Number of days from which job requisition was
requisitions approved to new hire start date. How
efficient/productive is recruiting function? This is
÷ also a process measurement. See EMA/Cost per
Hire Staffing Metrics Survey for more information,
available on the SHRM.org Web site.
Number hired
Training Total training cost Training cost per employee. Analyze training
Investment function further for effectiveness of training (i.e.
Factor ÷ Has productivity increased as a result of acquiring
new skills and knowledge? Have accidents
decreased?). If not, evaluate causes.
Headcount
Training (ROI) Total benefit The total financial gain/benefit an organization
realizes from a particular training program, less
- the total direct and indirect costs incurred to
develop, produce, and deliver the training
program (see white paper Training ROI:
Total costs Answering the Return-On-Investment Puzzle for
more information on this topic).
x 100
Turnover Total of the costs of separation The separation, vacancy, replacement and training
Costs + vacancy + replacement + costs resulting from employee turnover. This
training formula can be used to calculate the turnover cost
for one position, a class code, a division or the
entire organization. Exit interviews are a useful
tool in determining why employees are leaving
your organization (see SHRM white paper
Employee Turnover Hurts Small And Large
Company Profitability for more information on this
topic). Implement retention efforts. Evaluate if HR
practices are having a causal relationship in
positive changes to improving cost of turnover.
Turnover Rate # of separations during mo. Calculate and compare metric to national average
(Monthly) using Business and Legal Reports at
÷ www.bls.gov/jlt/home.htm. This measures the
rate for which employees leave a company. Is
there a trend? Has metric increased/decreased?
Avg. # of employees during mo. Analyze what has caused increase/decrease to
metric. Determine what organization can do to
x 100 improve retention efforts. Evaluate if HR practices
has a causal relationship in positive changes to
improving metric (See SHRM white paper entitled
Employee Turnover: Analyzing Employee
Movement Out of the Organization).
Turnover Rate # of employees exiting the job Calculate and compare metric to national average
(Annual) using Business and Legal Reports at
÷ www.bls.gov/jlt/home.htm. This measures the
rate for which employees leave a company. Is
there a trend? Has metric increased/decreased?
avg. actual # of employees Analyze what has caused increase/decrease to
during the period metric. Determine what organization can do to
improve retention efforts. Evaluate if HR practices
x 12 has a causal relationship in positive changes to
improving metric (See SHRM white paper entitled
÷ # mos. in period Employee Turnover: Analyzing Employee
Movement Out of the Organization
Vacancy Costs Total of the costs of temporary The cost for having work completed that would
workers + independent have been performed by the former employee or
contractors + other outsourcing employees less the wages and benefits that would
+ overtime - wages and benefits have been paid to the vacant position(s). This
not paid to vacant position(s) formula may be used to calculate the vacancy cost
for one position, a group, a division or the entire
organization.
Vacancy Rate Total number of Vacant Measures the organizations vacancy rates
positions as of today resulting from employee turnover. This formula
can be used to calculate the vacancy rate for one
÷ position, a class code, a division or the entire
organization
Total number of positions as of
today
x 100
Workers' Total WC cost for Year Analyze and compare (i.e. year 1 to year 2, etc.)
Compensation on a regular basis. You can also analyze workers
Cost per ÷ compensation further to determine trends in types
Employee of injuries, injuries by department, jobs, etc. HR
practices such as safety training, disability
Average number of employees management, and incentives can reduce costs.
Use metric as benchmark to show causal
relationship between HR practices and reduced
workers compensation accidents/costs.
Workers' (Number of injuries and/or The incident rate is the number of injuries
Compensation illnesses per 100 FTE ∕ Total and/or illnesses per 100 full-time workers.
Incident rate hours worked by all employees 200,000 is the base for 100 full-time equivalent
during the calendar year) workers (working 40 hours per week, 50 weeks
per year.)
x
The calculated rate can be modified depending on
200,000 the nature of the injuries and/or illnesses. For
example, if you wished to determine the lost
workday case rate, you would include only the
cases that involved days away from work.
Workers' (The number of days away from The severity rate is the number of days away
Compensation work per 100 FTE∕ Total hours from work per 100 FTE. To calculate the severity
Severity rate worked by all employees during rate, replace the number of injuries and/or
the calendar year) illnesses per 100 FTE from the incident rate
calculation with the number of days away from
X work per 100 FTE.
200,000 More information is available regarding the types
of injuries, incident rates, and comparison to other
SIC codes are available at the following website:
http://www.bls.gov/iif/oshdef.htm#incidence
Yield Ratio Percentage of applicants from a A comparison of the number of applicants at one
recruitment source that make it stage of the recruiting process to the number at
to the next stage of the the next stage. (Note: Success ratio is the
selection process. (i.e. 100 proportion of selected applicants who are later
resumes received, 50 found judged as being successful on-the-job.)
acceptable = 50% yield.)
churnover Formula: The metric tells you at which rate your staff is
leaving the company
Attrition rate (%) = (Number
of employees resigned
during the month / Average
number of employees during
the month) x 100 where
Average number of
employees during the month
= (Total number of
employees at the start of the
month + Total number of
employees at the end of the
month) / 2.
