“What gets measured, gets managed.” - Peter Drucker
HR analytics is becoming an essential tool in the modern employment landscape. What organizations can calculate, they can effectively improve and hence we see company growth and employee development. However, it is imperative that we know what HR analytical metrics we need to identify and work with to cause effective improvement.
Here are some things you might not know about HR analytics metrics; these can not only help you keep an eye on what programs are underway and which ones are performing well, but also help you calculate the associated cost of these HR functions. All in all, organizational efficiency, performance improvement, and business continuity can be maintained when you are working with the right kind of HR metrics.
19 HR Analytics Metrics To Study in 2022
Whether you’re a small, medium, or large organization, your growth is directly dependent on the quality of your workforce and the infrastructure in place to generate maximum productivity. A comprehensive HR management software platform can offer deep HR analytics metrics to improve overall efficiency by reducing time spent and costs incurred for talent acquisition and management.
Here’s a curated list of HR function metrics that you must keep in check:
>> Performance and Productivity Metrics
1. Employee productivity
Measuring employee productivity is vital to the overall output and financial turnover of an organization. Usually, team morale, pay scale, job responsibilities, and many other factors impact employee productivity. However, if your company is aware, you can deploy a strategy to measure and improve employee performance over time.
Darwinbox offers a dedicated performance management framework to address the employee productivity levels of any organization. With multiple assessments, multi-stakeholder assessments, continuous feedback, and performance journals, the many benefits of a comprehensive digital HR solution can boost employee productivity.
2. Employee Absence Rate
The employee absence rate is a crucial HR analytics metric to detect early signs of a problem. CareerBuilder research stated that 40% of employees who opted for taking a sick leave, did so for reasons other than illness.
One can monitor employee absence-rate-related issues by studying the growth in overall unforeseen absences over time. Using advanced time and attendance software HR professionals can investigate and get to the bottom of employee absence issues and strategize the path to maximum employee engagement.
3. Absence Rate per manager
Another crucial analytical metric to keep track of is the absence rate of employees corresponding to the reporting manager. When you dig a little deeper into team dynamics and absentee rate of employees under particular managers, you are likely to find out where a problem lies and hence deal with it better, not to mention, quicker.
4. Goal and achievement overlap
Another productivity and performance metric to pay attention to is where the defined goals and achieved outcomes align (and more importantly where they don’t). The first step in this process would be to set achievable targets and define deliverables for a particular period of time, and hence, at the end of this time, compare the actual achievements with the plans drawn up at the initial stages.
5. Continuous feedback
“There is no failure. Only feedback.”– Robert Allen
Performance improvement is a basic given when we have consistent and frequent feedback sessions providing direction and guidelines to the employees. Therefore, it is good practice to go through the timeline and frequency of these feedback sessions to ensure that the loop of feedback is continuous and unbroken at all times.
Another productivity analytics metric is overtime. Even though overtime is a sign of the company providing flexibility to the employees (by providing a way for employees to cover absences and employers to cover work delays caused by the shortage of staff), it also has several disadvantages. For instance, research on 18 manufacturing companies in the US stated how an increase of 10% in overtime actually led to a drop of 2.4% in the productivity of employees. There’s a way to calculate average overtime. Average overtime is the number of hours worked overtime by an employee in a fixed time period. It can be calculated as:
Average overtime hours = Total hours worked overtime / Number of employees working overtime
7. Overtime expenses
In some organizations, frequent overtime can incur additional costs to the company, especially when the nature of work requires a higher payout than the task generates. Many employees work overtime to increase their earnings. But when overtime cost increases, the payroll expense skyrockets.
Studying this HR analytics metric is crucial to identifying areas where business processes can be improved, and systems can be incorporated to manage overtime successfully. Part of the HR duty is to manage employees, and the payroll is a key aspect of organizational growth. Using payroll management software like Darwinbox, companies can determine whether adding more employees is more cost-effective than overtime expenses over time.
>> Inclusion and Wellbeing Analytical Metrics
8. Workforce Demographics & Diversity
In an increasingly interconnected setting, diversity and inclusion should be the focus of every enterprise. You need to start tracking the career progression of employees and the organization's stance on diversity. Additionally, knowing the demographics of your workforce can help you plan recruitment strategies for diverse representation in the future.
Among the many ways to track diversity and demographics, you can focus on gender, age, ethnicity, tenure, and experiences. Using an applicant tracking system, companies can make more informed decisions by shortlisting candidates based on various HR analytics. An intelligent AI-powered system will shortlist candidates that are best suited to your company’s requirements.
9. Employee engagement
Knowing how committed your employees are, is essential for continued business efficiency. According to Gallup, only 36% of the workforce is engaged at work. Employee engagement directly impacts employee performance and thus is a crucial metric to analyze. HR can suggest programs, activities, and sessions to help employees excel at their roles depending on employee engagement.
Using employee engagement surveys, you can gain an insight into the mood and opinions of employees. Surveys and enterprise networking events can help gauge how well employees respond to cultural changes over their career with a company.
> Darwinbox offers tech-driven solutions like Pulse for employee surveys and Vibe for employee social networking that helps assess, evaluate, and improve employee engagement. Click here to know more about these features.
10. Employee Happiness and Satisfaction
Employee engagement strategies also involve looking out for the wellbeing, happiness and satisfaction of the employees. When you know how satisfied, engaged, and valued your employees feel, you can chart some much-needed strategies for employee happiness to improve the morale at the workplace (physical and virtual). One way to do this is to conduct frequent surveys to detect the employee sentiment pulse.
>> Retention and Attrition Metrics
11. Voluntary Turnover Rate
Sometimes an employee does not gel with the organization's culture or work policies. Thus, organizations lose out on core functions because a qualified employee leaves. By analyzing the voluntary turnover rate, you will gain insightful HR analytics that will further help you develop better ways to retain employees.
Powerful HR analytics software will help organizations monitor and assess attrition and gain key insights on employee retention. The user-friendly interface projects advanced reporting and HR analytics features for headcount, mood analytics, attrition, human resources planning, etc.
12. Attrition Rate
Before we can talk about retention HR analytics metrics, we need to talk about the possibility of attrition and the rate at which it might be happening. Knowing that there is a potential attrition approaching (or happening) would help you look for exit drivers and put some solid retention strategies into motion.
13. Exit Drivers
While analyzing retention and retention factors, you must also look for exit drivers, the factors that pushed employees to exit. One way to detect these factors is by conducting exit interviews and allowing manager-to-employee discussions on exit. Exit interviews can be a key element while rooting out factors for employees contributing to turnover, but only when they are done right. Research says that about 75% of organizations out there conduct exit interviews, however the approach to that is to give out a piece of paper and check some boxes.
It is important to understand that even when your employees are exiting, it is an organization’s job to provide them with the employee experience that they promised them. Hence, organizations need to show them that respect and make the employees feel valued and validated.
14. Retention Rate
While determining if and why there is attrition, there is also reason to observe and analyze the HR metrics on retention. Checking out and calculating the retention rate will help you be more wary of which strategies are best for your employees and which ones need some fixing (or replacing).
Retention rate can be calculated by setting a defined time frame in mind. Divide the number of employees that exist after this time frame by the number of people you had at the start and then multiply this value by 100.
15. Average Tenure
Average tenure refers to the average time an employee spends working for your organization. While you will have some people who have been working with the organization for 17 years, you likely also have people who stay for a period of mere 17 days. This is exactly why an organization needs to know about the average tenure of an employee, to determine where, and most importantly, when a problem is occurring that is pushing employees to exit the organization.
>> Hiring, Recruitment, and Training
16. Time to hire
According to Yello, the average time to hire a recruit is between 3-4 weeks, even if candidates can expect an offer letter within the first week of their interview. The HR processes include documentation, multiple interview rounds, position mapping, background verification, onboarding, and training. Hence, the ‘time to hire’ HR analytics is key to determining the ideal recruitment strategy. Using HR management software like Darwinbox, companies can streamline HR functions to hire effortlessly, quickly, and efficiently.
Conventional hiring processes take too much time and are very demanding on the HR team. A shorter time to hire using HR management software can keep the candidates better engaged and reduce the load on the HR team with innovative hiring operations. The technology used for recruitment can also boost your organization's credibility among employees and third-party associates by creating a more inclusive culture. It also helps you avoid the lost productivity costs and recruiting costs that emerge from qualified candidates to fill key positions in the company. An example would be applicant screening, where you save time in the documentation process while shortlisting numerous applicants to get the best match. Not only are you making the right choice for your company but creating a resource pool for recruitment partners and employees to keep up with the latest developments.
17. Hiring Cost
Hiring costs are an essential HR analytics metric for any agency or company. The cost per hire shows how much of the organization's resources are being spent hiring, retaining, or bidding farewell to employees. Using dedicated HR management software, companies can keep track of all the costs and hiring statistics to make the best HR decisions. A centralized system of HR functions can tell you if you’re spending more or less than intended. Thus, organizations are equipped with better workforce planning and budgeting in the long run.
Candidate sourcing and talent management can be expensive and require dedicated HR analytics to track every step along the way. To calculate hiring costs, you can divide the total cost of your recruitment process by the number of fresh recruits. Depending on the HR strategy, you must include staffing agencies, job postings, and recruiter’s time.
18. Training hours per employee
We live in an era where training and upskilling are key elements of an ideal employee experience. While orientation can help the employees understand the organization that they work for, training helps them understand their roles and responsibilities, understand best practices of their jobs, and learn the related rules, regulations, and guidelines for their select duties. Therefore, it is important to ensure that every new joinee receives proper uninterrupted training for a defined period of time.
19. Training Effectiveness
Ramp up programs and tests at the end of courses are some easy ways to learn about the effectiveness of an ongoing training program. It is important to know how effective a training module/session is for joining employees so that the organization can suggest targeted courses for the employee and also so that the manager can understand the abilities of the new joinee.
There are certain parameters that can help you decide how your organization is fairing in the industry, in the market, or among the customers who are considering you for the services. Since the operations and outcomes of a particular organization are all dependent on the workforce producing them, it becomes all the more important to analyze the employees in terms of HR functions that you have put into motion.
Here’s hoping that this article was enough to shed light on 19 of the most important HR analytics metrics that will decide how your workforce is performing in the year 2020.
If you find these metrics useful to your organizational objectives, click here to explore how Darwinbox will help you map out your HR functions and track them on the fly.