If you are a business entity, then you must understand the importance of data. It is at the core of various business operations and acts as one of the most valuable resources. No business activity can be imagined without considering the role of data in it. HR processes are no exception. Many HR operations today across the globe are adopting data analytics capabilities to give a boost to business strategies. Research shows that 95% of 126 Asian organizations believe that HR analytics is crucial.
However, an effective HR analytics system should be based on the right data metrics. The right metrics enable accurate performance measurement of various HR functions to ensure effectiveness.
Here are ten important HR data analytics metrics that you should consider for various HR dimensions:
- TAT (Time to hire):This HR analytics metric helps recruiters measure the recruitment process’s efficiency. It assesses if a candidate is the best fit for an organization, by referring to the time between the application day and the day candidate considers accepting the job. Moreover, it identifies the positions that are difficult to fill.
- Cost per hire: This metric provides the cost the organization may incur while hiring new people. It takes consideration of the cost during recruitment, official expenses, and transport. It assists the TAT metric in measuring the efficiency of the recruiter team.
- Applicant to Offer ratio:This metric helps decide the preferability of candidates to join the company. For that to do, it calculates the number of offer letters sent to the selected candidate divided by the number of applicants who accept the offer letter.
Most often, a lower applicant to offer ratio is related to compensation issues. However, providing the salary listing at the beginning of the recruitment process help address a low score.
- Turnover rate:It is the percentage of employees leaving the organization within a particular period. The period referred for calculation is usually a year.
Turnover can be voluntary or involuntary. While voluntary turnover includes better opportunities or dissatisfaction, involuntary turnover may be due to bad reviews, poor performance, or behaviour. A company can analyse employee engagement through turnover rate. Thus, it is one of the critical metrics.
- Turnover cost:Whether an employee leaves an organization voluntarily or involuntarily, it incurs some costs. The vacancy generated can lead to delays and halts in the existing workflow.
Turnover costs include the costs of recruitment, selection, and training of the new that replace the ones who left. This metric is useful in analysing employee engagement policies to reduce the cost in the future.
- Organizational targets achievement:This metric help companies to analyse workforce performance. Suppose employees are performing well, it is good for the company as well. However, if this score is low, then this metric help to find out the reasons for it. It also helps HR in implementing a strategy for improving performance.
The reasons for low performance could be several, including lack of a specific skill or motivation. This means that the employees might need to be equipped with additional resources as in better tools and technology.
- Compensation revenue ratio:It is the ratio between the amount spent on salaries and compensation to the annual sales. With the help of this metric, HR can decide if it is feasible to make a specific raise or to offer bonuses and other benefits.
- Absence rate: It indicates a lack of employee attendance. If an employee remains, absent for a considerable amount of it, it could have several issues. It includes detrimental work culture, stress, or illness. While an absent rate of 1-2% can be regarded as normal, it is not favourable if this rate remains high for an extended period.
- Performance and potential measuring metric: This tool is critical in measuring the performance of an employee. It helps to indicate which employees are improving, which of them are still struggling to give their best and whom all the best performers are. Based on the data provided by this metric, companies can take necessary measures to improve the poor performers while retaining the best performers.
The 9-box grid is one of the popular tools that measure employee performance.
- Employee involvement: It is critical to assess employee productivity. This metric indicates if employees are involved well with their job or not. It includes surveying employees, asking their opinions. This survey is linkedto the company turnover, its outlook, revenue and overall performance.
The insights derived from HR Data metrics help HR personnel realize an efficient HR process. However, an evolved HR analytics is inevitable for improved workflow management of an organization. It becomes even more crucial when businesses need to adopt new skills and talents to beat the challenges of the global pandemic. In this context, ONPASSIVE’s new HRMS portal, O-Staff, offers personalizedfully automated and cost-effective HR solutions for companies to renovate their staffing operations.