What HR Metrics Should I Use?

Someone setting up will ask the question “what should I measure?”. There is not an all encompassing answer. Each company will be different depending on their business type, data capability and where HR is at in terms of being part of the business, and HR strategy. It is really dependent on your business, what you can do and what you can influence.

While this might not be helpful, there are standard metrics that anyone can be measuring to add value to their business.

Turnover is one of the big measures. It can be a simple health check to see whether people are happy working at the organisation – the happier they are, the less likely they are to leave.

To improve this metric, the separations can be categorised by reason to determine what voluntary turnover you have (ie the employee deciding to leave, mainly resignations) and involuntary turnover where the organisation initiates the turnover (eg dismissals, retrenchment etc). By doing this you get a better understanding of your turnover and what you can and cannot control.

Standard formula – total separations in the period/average head count.

Similarly, absenteeism can be a measure of how happy your employees are. Measuring sick leave events can show whether employees have investment in the company. It can be an indicator of whether your productivity levels and perhaps indicate whether there are potential separations ahead.

Standard formula – total sick days/total head count.

Workforce profile
Knowing your workforce is very important. Knowing about the location, salary levels, gender, age, tenure of your workforce can help understand who is doing your work, whether you have the appropriate resources in the right parts of the business, and how you need to adjust your people strategies to either take advantage of your profile, or to readjust your plans to ensure that you are able to compete with a well balanced workforce.

When looking at the workforce profile, it is good to have a baseline for comparison across time. This may be compared to actual numbers, or as a proportion of total workforce, depending on metrics and what your targets are.

Different ways that you can split your workforce includes:
Age, gender, tenure, location, department, salary/organisation level, employment status, job family

You can use these employee categories to make other measures more meaningful. For example, if you can measure turnover by location, you can more easily understand the separation patterns across the organisation.

These are very simple metrics, so I am probably not telling you much that you don’t already know. If you can understand these simple measures, then you can build on them to establish a more meaningful set of measures.


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