When you think of big data, what comes to mind?
Is it marketing and advertising? Or maybe it has something to do with something techier, like stock trading and data security.
But there's another area closer to home that can mine and benefit from big data -- human resources.
If your HR department isn't actively tracking and analyzing metrics to make company-wide improvements, then you're running your business blind.
If there's an issue on the floor of your company, then you can identify the problem by looking at key metrics.
So which HR metrics should you be measuring right now.
Let's have a look.
What Are HR Metrics, Anyway?
Unlike in other industries, HR metrics consists of measuring how effective, impactful, and efficient HR programs are.
In other words, it helps business owners to see whether or not HR efforts are profitable or a waste of time (and money).
In turn, it allows your HR teams to gauge their effectiveness so they can make improvements where necessary. So it's not about putting anyone in the dog house.
Instead, you use these metrics to improve your organization from an HR standpoint continuously.
For instance, you'll be able to see how efficient a particular department is in your organization. This is determined by looking at workforce productivity, employee satisfaction, recruiting, and many other factors.
Why Measure HR Metrics?
Every decision you make in your organization needs to have purpose and direction. If you have metrics to back your actions, you'll have an easier time aligning your employees across all departments with your changes.
It's common for workers to paint HR in a negative light like they're "out to get them." With metrics, you can update departments on their efficiency to help them see why you're making certain moves.
It'll also help to reduce the backlash from your workers. Transparency is essential to making this work.
So what are these metrics you should be tracking?
Let's take a look.
1. Rate of Employee Absences
It happens -- people get sick, injured, and run into other life problems. There's no way around it.
But what if there's a deeper problem brewing that's causing an increased absence rate? One way to find out is to look at your rate of employee absences over a long period.
Rather than looking at it month-to-month, you should review it year-over-year. If there's a steady increase, then it could be due to multiple factors.
For example, it may be due to a deteriorating work climate or, higher workplace stress.
In this case, you'll need to look into how you can make improvements. Consider taking an employee survey or talk to managers to dig deeper.
Ideally, you want to keep your rate of absences to around 1% to 2%.
Speaking of managers...
2. Managers Per Absence Rate
What if management isn't doing an excellent job of running their departments? When this happens, you can expect to see more people calling in more frequently.
One way to determine this is to look at the absence rate per manager. If you notice more people are calling out in one manager's department, then it's worth looking into.
You don't want to keep aboard any managers who aren't going to inspire your workers. If management is terrible, then you can expect much from their understudies.
3. Productivity Rate of Your Workplace
It's good to see how your workers are performing as a whole. If your HR teams are doing a swell job, then you'll see it in the overall productivity rate of your workplace.
If the rate isn't where you'd like it to be, then consider making improvements. For example, you can get rid of repetitive tasks that HR professionals must perform day in and day out.
One way to achieve this is to eliminate paper processes involved in hiring, onboarding, and training.
Instead, you can have them use tools like eversign. This will allow them to upload digital documents, send them to new hires, and have them sign it through the platform.
HR can then manage and track documents through their virtual dashboard.
4. Employee Engagement Rate
Now, while productivity is essential, it's not the be all end all. Engagement is just as essential to monitor.
This is because the two work hand-in-hand. When you see employee engagement rates decrease, you'll soon see productivity rates do the same.
If you find that productivity is low alongside engagement, then your focus should be on improving engagement.
Surveys are excellent for identifying how your employees feel about the workplace. For example, do they like management, do they look forward to coming to work, and do they feel they have the necessary tools to perform their jobs well?
5. Overtime Expenses
You want employees who are hard workers. But not if it's hurting your bottom line. If you notice you're overspending annually, then the right place to look is at your overtime expenses.
Now, if you're consistently asking employees to work overtime, then you can expect this to affect your absentee rate.
Your body can handle only but so much stress and will need to recuperate. So you may notice workers calling out due to being tired, sick, or both.
You also have to be careful about employee turnover rates increasing. If you're overworking your personnel, then it's only a matter of time before they find employment elsewhere.
6. Employee Productivity Index
More companies are allowing their workers to perform their work duties remotely. This means HR can no longer measure productivity based on who's clocked in.
The workaround for this is to calculate productivity in the form of tasks completed.
This is a great time to throw out the time sheets and instead focus on the efficiency of your workers.
How you manage your remote workers will determine how you can collect this data. However, if you need to track their time spent working -- invoicely offers a time tracking tool.
7. Rate of Good Hires
Positions go vacant and they have to be filled as soon as possible. But this shouldn't be at the cost of your business's productivity.
If your recruiters are making a lot of bad hires, then it'll quickly reflect on your company's output. You may notice goals aren't being reached, terminations increase, and so on.
To avoid all of this, we recommend monitoring how efficient new hires are. One way to determine this is to look at their performance levels and how long they stay with the business (are new hires leaving within 12 months?).
Other important factors to consider for measuring recruitment is to look at how long it takes to fill positions, how fast new hires are onboarded, and the diversity of new hires (especially in higher ranks).
How much money you're losing per bad hire is also something you want to keep an eye on.
8. Retention and Turnover Rate
How many managers and employees leave your company each year? How about each month?
If you're regularly seeing new faces in an established company, then there's an issue. This is expected when you're dealing with a startup or expansion.
However, if all the old faces are coming up missing, then your retention and turnover rate is suffering.
This is important to measure because each worker that quits costs your company.
This is because you have to pay for ads on job boards, interview, and train new hires. In some cases, you may even have to higher a recruiting agency.
Then if you have to hire higher-level employees, then you can expect to pay even more.
9. Training Expenses and Effectiveness Index
When you bring aboard a new employee, how long does it take to train them? Surely, they don't hit the ground running on day one (unfortunately).
So it's good to know how long it takes for new hires to get onboarded and reach a high level of productivity.
The length of time it takes to train is important. For example, if you have day-long training sessions, then you're spending a lot of money per new hire.
Then you need to turn around and measure how effective training is. If you're spending a lot of money on training and performance levels are still suffering, then something's wrong.
One way to measure this is to set training goals that workers must reach. If they don't, then this shows the training wasn't adequate.
The idea is to get training in place that'll help your workers hit the floor running as quickly as possible.
Begin Measuring and Improving Your Workforce
Finding out why workers are quitting, calling in sick, or underperforming shouldn't be difficult. When you take a proactive approach to tracking and measuring key metrics, then you'll have these insights at your disposal.
But you have to start measuring them now.
Are you already tracking metrics in your HR? Which ones do you find essential?