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Three Critical Human Resources Metrics for Employers

Many employers routinely watch key financial metrics, such as current ratio and gross profit, but these are not the only measures you should consider monitoring. Recent years have seen the emergence of vital human resource (HR) metrics. These measures can help your organization make better-informed decisions about human capital, operations, and overall strategy. Here are three examples of critical HR metrics:

  1. Turnover. The turnover percentage is calculated by dividing the number of terminations (voluntary and involuntary) for a specified period by the average headcount and multiplying that number by 100. Turnover is a good indicator of your company’s culture and health overall, but you also can apply it on a more granular demographic level.

Looking at turnover for your high performers or Millennials, for example, can give you valuable insight on how well you are managing these employees. High turnover among new hires could suggest problems with your recruiting or onboarding processes.

  1. Average time to fill. This metric is useful in assessing the efficiency of your recruiting process. It is calculated by dividing the amount of time it has taken to fill all roles (that is, the total days all positions were open) by the total number of openings filled.

Higher numbers might signal that the application or interviewing process is too long or that the candidate qualifications are subpar. They also could reflect the need to improve your employer brand.

  1. Average time to productivity. It is one thing to get the right people in the right jobs; it is another to get them contributing to the company. Time to productivity tells you the average number of days it takes for a new hire to meet a satisfactory productivity level.

The measure is determined by totaling the number of days from start to the minimum desired level of productivity and dividing that figure by the number of positions filled. Time to productivity provides not only a window on your recruiting and onboarding but also useful planning information regarding, for instance, how quickly you can ramp up production of a new product, service, or project.

The appropriate HR metrics for an employer to track will depend on its individual circumstances and goals. Once you identify the most relevant ones, you can move forward on a proactive, real-time basis — as today’s fast-moving, data-driven world demands. We can help you identify and accurately calculate the optimal HR and financial measures for your organization.

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