Have you recently bought HR software for your business? If so, you’re probably blown away by how much data is now available at your fingertips. But you should be careful not to go crazy and measure too many metrics.
Measuring too many metrics can waste a lot of your time. Not all metrics are very useful! To help you focus your attention on the areas that matter, here are five of the most important HR metrics you should be measuring.
1. Cost Per Hire.
Understanding how much it costs you to recruit one person can be very helpful. It can help you isolate and test different parts within your recruitment pipeline, so that not only do you find out which techniques are bringing you the best candidates, but you also find out where to make cost savings for your business.
Measuring staff turnover helps you understand whether your retention strategies are working. You can go one step further than measuring overall employee turnover, too. For example, you might want to track the turnover of different demographics and roles. This can help you adjust your retention strategy in a more targeted way.
Tracking absence gives a good indication of how productive your existing workforce is. While it doesn’t tell you how productive your employees are during their active hours, it certainly tells you how many hours they are putting into the business. Your HR system should give you tools for tracking absence. For example, you might be able to use your HR software to track employees’ Bradford Factor scores. This helps you measure more problematic patterns of absence.
4. Job Satisfaction and/or Engagement.
It is good to know how your employees are feeling at work. This could help you to understand whether or not your employees are giving 100% – happier employees tend to produce better results. There is a lot of debate on how to track job satisfaction and/or engagement. One simple method is to conduct a survey asking employees whether they look forward to coming to work most days.
You can measure and track performance by conducting appraisals and performance reviews. To get a better picture, make sure you include 360 degree feedback, rather than one-sided feedback from direct managers. You should also act on the information you learn. Appraisals that gather dust 11 months out of 12 are not much good!
These are five of the most important HR metrics you should be measuring, tracking, and working on. Your HR software will help you do this.
Which other metrics do you think you should be tracking? And which metrics do you think many HR departments track which actually waste time?