13 HR Metrics You Need to Know

AIHR - Academy to Innovate HR

17 Nov 202205:48

Summary

TLDRThis 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.

Outlines

00:00

📊 HR Metrics for Strategic Decision-Making

This segment introduces the significance of HR metrics in strategic decision-making, focusing on 13 key metrics related to revenue, recruitment, retention, and learning and development (L&D). The metrics discussed include revenue per employee, performance and potential, engagement rating, time to hire, cost per hire, early turnover, employee happiness, voluntary turnover rate, talent turnover rate, retention rate per manager, training expenses per employee, training effectiveness index, and training efficiency. Each metric is explained with its formula and the context in which it is used, emphasizing their importance in evaluating employee performance, hiring efficiency, and the success of training programs.

05:00

🔖 Additional Resources for HR Metrics

The final paragraph serves as a call to action for viewers to access additional resources for HR metrics. It invites them to explore the 51 HR Metrics cheat sheet guide for more examples, which can be found via a link in the video description. The segment also encourages viewers to engage with the content by liking the video, subscribing to the channel, and enabling notifications, ensuring they stay updated with future content.

Mindmap

Keywords

💡Metrics

Metrics in the context of the video refer to the quantitative measures used in Human Resources (HR) to assess and improve various aspects of an organization's workforce. They are crucial for strategic decision-making, helping HR professionals to evaluate the effectiveness of their practices and to drive improvements. For instance, the video discusses 'Revenue per employee' as a metric indicating the quality of hired employees.

💡Revenue per employee

This metric is defined as the total revenue of a company divided by the total number of employees. It is used to measure the financial contribution of each employee, thereby reflecting the efficiency and productivity of the workforce. In the video, it is highlighted as an important revenue metric that HR can use to assess the quality of their hiring decisions.

💡Performance & potential

Performance & potential is a metric derived from the 9-box grid model, which categorizes employees based on their current performance and future potential. This helps HR to differentiate between high performers and those who may need development or are at risk of leaving. The video uses this metric to discuss how to identify underperformers, valued specialists, emerging potentials, and top talents.

💡Engagement rating

Engagement rating measures the level of enthusiasm and commitment employees have towards their work and the organization. It is a 'soft' HR outcome that is critical for employee performance. The video mentions using annual engagement surveys, pulse surveys, or the Employee Net Promoter Score (eNPS) to track this metric, emphasizing its importance in gauging employee satisfaction and loyalty.

💡Time to hire

Time to hire is a recruitment metric that calculates the number of days it takes from a candidate applying for a job to accepting a job offer. This metric is significant for understanding the efficiency of the recruitment process and the candidate experience. The video points out that a longer time to hire might indicate inefficiencies or a less attractive employer brand.

💡Cost per hire

Cost per hire measures the total costs associated with hiring new employees, divided by the number of new hires. This metric is essential for HR to manage the budget for recruitment and to ensure that the recruitment process is cost-effective. The video provides a formula for calculating this metric, which can help HR professionals make data-driven decisions about recruitment strategies.

💡Early turnover

Early turnover refers to the rate at which new employees leave the company within their first year of employment. This metric is critical for assessing the success of the hiring process and identifying potential mismatches between employees and the company or their roles. The video uses the formula for early turnover to illustrate how HR can monitor this aspect of employee retention.

💡Employee happiness

Employee happiness is a metric that measures the commitment and satisfaction of employees with their organization and job. It is often assessed through tools like the eNPS, weekly pulse surveys, or the employee satisfaction index. The video emphasizes that happy employees are more likely to be committed and productive, making this metric a key component of a healthy work environment.

💡Voluntary turnover rate

Voluntary turnover rate is the percentage of employees who choose to leave their job within a given period. This metric is important for HR to identify potential issues within the organization that may be driving employees to seek opportunities elsewhere. By monitoring this rate, as mentioned in the video, HR can take proactive steps to improve employee satisfaction and retention.

💡Talent turnover rate

Talent turnover rate specifically measures the rate at which high-potential employees leave the organization. This metric is crucial for HR as it indicates the effectiveness of talent management strategies and the organization's ability to retain its most valuable resources. The video stresses the importance of keeping this rate low to maintain a strong talent pipeline.

💡Training expenses per employee

Training expenses per employee is an L&D metric that tracks the average cost of training per employee. It helps HR to allocate resources effectively and to ensure that investment in employee development is justified. The video provides a formula for this metric, which can be used to evaluate the cost-effectiveness of training programs.

💡Training effectiveness index

The Training effectiveness index is an L&D metric that measures whether training goals have been met and if there has been a positive impact on employee performance. It is tracked by comparing baseline productivity with post-training performance. The video suggests that an increase in the Employee Productivity Index can indicate the effectiveness of training initiatives.

💡Training efficiency

Training efficiency is a metric that helps HR determine the value derived from the L&D budget. It is calculated by dividing the training expenses per employee by the training effectiveness index. This metric, as discussed in the video, ensures that the organization is maximizing the return on investment for its training programs.

Highlights

Metrics are essential for HR and strategic decision-making.

13 common HR metrics related to revenue, recruitment, retention, and L&D are discussed.

Revenue per employee is an indicator of the quality of hired employees.

Performance & potential is calculated based on the 9-box grid to differentiate turnover.

Engagement rating is a 'soft' HR outcome that impacts performance.

Time to hire provides insight into recruiting efficiency and candidate experience.

Cost per hire measures the financial investment in hiring new employees.

Early turnover indicates potential mismatches in hiring.

Employee happiness measures commitment to the organization and job.

Voluntary turnover rate helps identify potential problem areas within the organization.

Talent turnover rate focuses on the retention of high-potential employees.

Retention rate per manager identifies management effectiveness.

Training expenses per employee tracks development costs for smarter L&D investments.

Training effectiveness index measures whether training goals are reached.

Training efficiency ensures maximum value from the L&D budget.

Additional HR metrics can be found in the 51 HR Metrics cheat sheet guide.

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