A measurement system is important for every aspect of a business. We use metrics to ascertain what is and isn’t working, allowing us to ensure that everything runs optimally. Since human resources is the element of an organisation that makes sure that employees are working efficiently and effectively, the metrics involved here are extremely useful.
In this post, Natural HR explains the importance of HR metrics, as well as the key performance indicators for HR. Keep reading to find out more about how to measure HR and use these metrics to take your business forward.
What are HR metrics?
Human resource metrics are important figures and information that allow organisations to track their employees’ value (human capital) and measure how effective their initiatives are. The data that this information provides allows organisations to see what is working, what needs to be improved, and what to expect from their workforce. This, in turn, empowers businesses to create a well-organised and comprehensive people strategy.
Why HR Metrics Matter
Information enables us to improve and make informed, strategic choices for the future. HR data makes it possible to improve a business and its specific factions in the specific directions that you want to grow. Detailed HR metric data and a great people strategy will help your business grow sustainably with a satisfied workforce. In other words, HR metrics are invaluable.
What are examples of HR metrics?
There are a number of important HR metrics that you can consider for your business. You may find that only a few are applicable to your organisation if you have a small business. If you are part of a larger organisation, it is likely that you’ll require all of these metrics to compile practical reports and to ensure that you are working towards success.
Here are 15 HR metric examples to consider:
- Time used to hire
- Cost per hire
- Quality of hire
- Absenteeism rates
- Time between promotions
- Salary changes
- Revenue earned per employee
- Performance and potential
- Training and development
- Effectiveness of HR software
- Cost of HR per employee
- Pay gap
- Gender and race diversity ratio
- Goal tracking
- Company performance
What are the most important HR metrics?
As we have seen, there are many HR metrics that can help identify issues within your workforce and company. After browsing through them, however, you may want to consolidate these KPIs to form more broad performance metrics that encapsulate HR succinctly. So, what are the 5 key performance indicators for HR?
- Retention and engagement
- Diversity, equality and inclusion
- Employee value and performance
- Training and development
How do you measure HR metrics?
With the aid of HR software, measuring and reporting on HR metrics is easy. Our people management tools suite includes features that encompass all of the important HR metrics that we have looked at above. In addition to this, our reporting feature makes it simple to present the information in an actionable, easy to understand format.
Natural HR makes use of HR analytics instead of standard reporting, as this has a predictive element that is not found in traditional reporting. The predictive analytics will help you to make important decisions to reach your goals faster.
If you would like to know more about our software, contact us today. We are always happy to help businesses fulfil their potential.
You may also be interested in…
What does HR reporting mean, and how could staying on top of it benefit your business? We take a look at the key HR reports a business needs to evaluate to succeed.
Wondering how you can learn to better understand your employees? Find out more about how ‘people analytics’ can boost staff retention, reduce the skill gap, improve business performance and much more.