HR Trends

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HR Analytics – Validate Human Capital ROI

HR dashboard
HR metrics, ratios and statistics have enabled me gauge the effectiveness of the HR departments I have headed and defined HR impact on the bottom line of the organisation. I usually settle for up to 12 metrics that are most important for the organisation and ensure that these are easily understood and considered strategic by top management and the board. Also these 2 groups of decision makers are more interested in “dashboards”. Give them statistical evidence – data based driven case and your strategy papers will be passed.

The metrics and statistics are analyzed to generate ANALYTICS  that provide insights that inform fact based decision making.  The analytics describe predict, and improve business performance.  Analytics often involve studying past historical data to research potential trends to analyze the effects of certain decisions or events. The goal of analytics is to improve the business by gaining knowledge which can be used to make improvements or changes.

The key issues have been the capacity to track and calculate metrics   while benchmarking against best practice in the local and global industry. Some common errors that should be avoided are developing and implementing HR metrics in a vacuum and developing more metrics than it is feasible to maintain and utilize. Also HR practitioners need to avoid creating and then storing the data without using it.

I maintain monthly and eventually year on year metrics and statistics whose trend I analyze periodically. What are your statistical trends telling you and how are they likely to impact on the orgainsation at the end of the year? Can you do something about it sooner than later? Graphical representation creates more impact as it is easier to understand and interpret the data. The final figures are usually generated from employee records, the Finance department and employee engagement and satisfaction survey results, among others.

Bottom line Accountabilities
1. % of key HR performance indicators met or exceeded
2. Average revenue/profit per employee
3. Average sales turnover per employee
4. Total employee cost
5. Employee costs as a % of revenue
6. Employee costs per employee
7. Employment costs as a % of operating costs
8. HR budget variance
9. Return On Investment (total benefit – total costs) x 100
10. Human Capital ROI; Revenue – (Operating Expense – [Compensation cost + Benefit cost +?]) / (Compensation cost + Benefit cost)
11. Human Capital Value Added; Revenue – (Operating Expense – ([Compensation cost + Benefit Cost]) / Total Number of FTE
12. The shilling/dollar value of the increased workforce productivity between this year and last year
13. Turnover %; Number of employees exiting the job during 12 month period (in FTE) ÷ average actual number of employees (in FTE) during the same period
14. Talent Retention %: measure the turnover percentage from the group of identified top talents
15. Turnover costs; total costs of separation + vacancy + replacement + training
16. % of employees who are willing to recommend the organization as an employer of choice
17. The percentage of employees who “look forward to coming to work” everyday (from survey results)
18. Employee satisfaction survey Index/rating
19. Employee engagement survey index/rating
20. Percentage of HR staff with appropriate Professional Qualification.
21. HR headcount ratio – Number of staff per individual HR official
22. Average response time to routine HR inquiries.
23. Average time to update employee records if changes in employee information occur.

Recruitment
1. % of job vacancies; Number of job vacancies (in FTE) relative to the total number of employees (in FTE)
2. Number of applicants attracted per method
3. Ratio of qualified to unqualified applicants attracted
4. Average lead time to recruit employees from time vacancy is created to time employment contract is signed
5. The number of overall days that key positions remain vacant
6. % of vacancies filled internally/Ratio between internal promotions and external hires for open vacancies
7. Number of applications received per vacancy
8. Total recruitment costs per employee hired
9. Average cost of recruitment per employee (FTE)
10. The shilling/dollar impact of a bad hire in key positions
11. Job performance of employee attracted by method
12. Tenure of employee attracted by method
13. %of those recruited against those interviewed
14. %of selected candidates who accept job offers; Number of accepted job offers versus the total number of job offers
15. % of vacancies filled that followed internal recruitment procedures.
16. % of new hires achieving 12 months service or % of new hire retention; Percentage of new hire retention after certain period (e.g. 12 months); Number of new hires that still work for the company versus the total number of hires
17. Percentage of new hires achieving satisfactory appraisal at first assessment
18. Cycle time (e.g. in days) from job acceptance until new hire begins in the agreed position
19. % of actual vs target new employee compensation
20. Percentage of CVs that are worth screening compared to the number received for an advertisement posting. Gives an idea if the advertising is targeting the right audience and attracting the right caliber of people
21. % of contracts extended beyond retirement age

Performance
1. % of high performing employees
2. % of low performing employees
3. Percentage improvement in employee productivity (as compared to last year)
4. Percentage of employees with their performance decreased compared to last review
5. Percentage of low-performing employees who are on a performance management program
6. Percentage of employee probation reports completed x time (e.g. 1 week) before the due date

Remuneration
1. Average salary paid vs. competition / industry and geographical location
2. Benefits provided vs. competition / industry and geographical location
3. Management compensation as a percentage of total compensation
4. % of employees who are earning below or above their salary band
5. Ratio of female to male salaries including bonus, etc. per hierarchy level
6. Bonus payout as a % of the total possible within the measurement period (e.g. quarterly)

Training and Development
1. % of required skills/competencies available within the organization
2. Average lead time to close skills/competencies gaps
3. % of employees who have post graduate qualifications…
4. Expenditure on training and staff development per employee in a given period
5. % difference in the rate of productivity before and after training
6. Proportion of training programmers resulting in quality improvements (reduction in defects)
7. % of training course participants that are satisfied/highly satisfied with the course or program
8. % of employees that fully execute their Individual Development Plan
9. Average lead time for promotion from bottom grade to senior management
10. % of managers/senior managers who have been promoted internally

Turnover
1. Average number of years of service at the organization across all employees
2. Voluntary turnover rate (resignations and retirements)
3. Involuntary turnover rate (dismissals, death…)
4. Turnover in key jobs/levels e.g. Management turnover rate – as a percentage of management headcount.
5. % Turnover per grade
6. Preventable turnover in key jobs (exit survey results)
7. Percentage of top-performing employees who resigned for compensation-related reasons

Attendance and absence
1. % of total leave days taken
2. % of leave days not taken as scheduled
3. Absence rate: Percentage of days that employees are absent from work.
4. % of employees who report late to work
5. % of staff who leave work late
6. Total time lost due to late reporting
7. % of staff on short-term sick leave
8. % of staff on long-term sick leave
9. Average overtime hours per person

Monthly Statistics and trends over time
1. Total headcount/total number of employees
2. % of full-time employees (FTE)
3. % of part-time employees
4. Number of entries
5. Number of exits
6. Number of staff per duty station/department
7. FTE/Temporary staff per location/department
8. Number of staff per grade
9. Number of staff per job category
10. Gender distribution within the whole organization/locations/departments…
11. Age distribution using different age groups
12. Number of staff by highest Qualifications
13. Tenure/Years of service distribution
14. Nationality distribution
15. Ethnic distribution
16. % of employees with disabilities
17. % of senior managers as a percentage of employees

Share with us any other metrics or statistics that you consider vital…thanks

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This entry was posted on 14/05/2013 by .