13 HR Metrics You Need to Know

Summary

This Learning Bites episode explores 13 key HR metrics crucial for strategic decision-making, covering revenue, recruitment, retention, and learning & development. Metrics include revenue per employee, engagement rating, time to hire, voluntary turnover rate, and training efficiency. The video encourages viewers to access a comprehensive 51 HR Metrics cheat sheet for further insights and advises subscribing for more HR-related content.

Takeaways

• 📈 HR metrics are crucial for strategic decision-making in an organization.
• 💼 Revenue per employee is a key metric indicating the quality of the workforce and can be calculated by dividing total revenue by the total number of employees.
• 📊 The 9-box grid is used to assess employee performance and potential, helping to differentiate between wanted and unwanted turnover.
• 🔍 Engagement rating is a significant 'soft' HR outcome, with tools like annual surveys, pulse surveys, and eNPS used to measure it.
• 🕒 Time to hire is a critical recruitment metric that reflects the efficiency of the recruitment process and the candidate experience.
• 💵 Cost per hire measures the financial investment a company makes to recruit new employees, calculated by dividing total hiring costs by the number of new hires.
• 🔄 Early turnover is a significant metric for assessing hiring success and can indicate mismatches between the employee and the company or role.
• 😊 Employee happiness, measured through eNPS or pulse surveys, reflects employees' commitment to the organization.
• 🏆 Voluntary turnover rate helps identify potential issues within the organization by measuring the percentage of employees leaving by choice.
• 🌟 Talent turnover rate focuses on the retention of high-potential employees, which is vital for organizational growth and development.
• 👨‍🏫 Retention rate per manager identifies potential managerial issues by measuring employee retention under each manager's supervision.
• 💼 Training expenses per employee is a common metric in Learning & Development (L&D), helping to track and optimize investment in employee training.
• 📊 Training effectiveness index measures whether training goals are met and can be assessed through productivity improvements post-training.
• 💼 Training efficiency ensures the L&D budget is well-spent, calculated by dividing training expenses per employee by the training effectiveness index.

Q & A

What are the primary categories of HR metrics discussed in the video?

The primary categories of HR metrics discussed in the video are revenue metrics, recruitment metrics, retention metrics, and L&D (Learning and Development) metrics.

How is the revenue per employee calculated according to the video?

Revenue per employee is calculated using the formula: Revenue per employee = Revenue / Total number of employees.

What does the performance and potential metric indicate in HR?

The performance and potential metric, based on the 9-box grid, indicates which employees are underperformers, valued specialists, emerging potentials, or top talents, and helps differentiate between wanted and unwanted turnover.

Why is the engagement rating important in HR?

Engagement rating is important as it measures the 'soft' HR outcome of employee engagement, which correlates with better performance. It can be tracked through annual engagement surveys, pulse surveys, or the Employee Net Promoter Score (eNPS).

What does the time to hire metric reveal about a company's recruitment process?

The time to hire metric reveals the efficiency of a company's recruitment process and the candidate experience by measuring the number of days between a candidate applying for a job and accepting a job offer.

How is the cost per hire calculated and what does it signify?

The cost per hire is calculated using the formula: Cost per hire = Total costs of hiring / Number of new hires. It signifies the financial investment a company makes to hire new employees.

What does early turnover indicate in terms of hiring success?

Early turnover indicates whether there is a mismatch between the person and the company or the person and their position, and it is calculated as: Early turnover = (Total number of leavers in the first year / Total number of employees in the first year) * 100.

How is employee happiness measured in the context of HR metrics?

Employee happiness is measured using the eNPS, a weekly pulse survey, or the employee satisfaction index, which reflects employees' commitment to the organization and their job.

What is the significance of the voluntary turnover rate in HR?

The voluntary turnover rate signifies the percentage of employees that leave their job of their own choice, and monitoring this metric can help identify potential problem areas within the organization. It is calculated as: Voluntary turnover = (Total number of voluntary leavers in a period / Total number of employees in a period) * 100.

Why is the talent turnover rate important and how is it calculated?

The talent turnover rate is important as it measures the turnover rate for high-potential employees, which should ideally be low. It is calculated using the formula: Talent turnover rate = (Total number of high potential leavers in a period / Total number of employees in a period) * 100.

How does the retention rate per manager help in managing teams?

The retention rate per manager helps identify managers who may be overstretched or lack the necessary tools or training to be effective. It is calculated as: Retention rate per manager = ((Total number of employees per manager – number of employees who have left per manager) / total number of employees per manager) x 100.

What does the training expenses per employee metric help track?

The training expenses per employee metric helps track development costs to make smarter investments in Learning and Development. It is calculated using the formula: Training expense per employee = Training budget / Number of employees who need training.

How is the training effectiveness index used to measure the success of training programs?

The training effectiveness index is used to measure the success of training programs by setting training goals and checking whether employees have reached those goals after the training. It can also be tracked by comparing baseline productivity with the impact of training over a longer period.

What does the training efficiency metric indicate and how is it calculated?

The training efficiency metric indicates the value obtained from the L&D budget. It is calculated using the formula: Training efficiency = Training expenses per employee / Training effectiveness index.