How HR metrics guide you towards business success?

HR teams not only work on hiring and retaining top talent, they also make a critical contribution to business success. Since recruiting quality talent is a top priority for most HR teams, it makes sense to make the most of data, analytics, and metrics to get the most out of a company's human resources. Human resources can be scarce, especially during the hiring process for positions that require highly specialised skills. This scarcity is a fact that 77% of all CEOs recognize.

One of the biggest threats to their business, they say, is limited access to key skills, innovation, and creativity they want to bring in with highly skilled employees.

Meanwhile, 47 % of HR teams recognise employee retention and turnover as their biggest challenge. As such, a key understanding of what attracts potential employees (and what keeps them happy) is crucial for meeting business goals and increasing ROI.

To address these challenges, HR teams must be fully equipped with data on what exactly contributes to employee satisfaction. For example:

These data can help refocus their hiring and employee engagement strategies. It is also important to understand organisation-specific data that can help HR managers and key executives address unique problems and leverage strengths within their talent pool.

This is where HR metrics come in handy. With a deep understanding of HR metrics, KPIs, and employee performance, HR teams can turn statistics into pathways for solid change through actionable insight.

What Are HR Metrics and Why Are They Important?

Human Resource metrics, or HR metrics, are data that allow organisations to track their human resource capital and measure the effectiveness of HR initiatives.

Some examples of critical metrics that can contribute directly to business success are:

  • Cost per Hire
  • Time to Hire
  • Absence Rate
  • Retention Rate
  • Employee Performance
  • Employee Turnover
  • Training Effectiveness
  • Employee Motivation
  • Employee Engagement

Traditionally, businesses have measured KPIs such as sales and production figures, but modern enterprises also track key human resource management indicators closely. Moreover, personnel-related data has become an ever-more valuable resource for strategic decision-making. Executives are also becoming increasingly interested in seeing reports from HR teams to include insights from these reports in their overall business strategy.

Among the top benefits and advantages of tracking your HR metrics are:

Improving an organisation's strategy

Clear, solid data about an organisation's workforce helps executives make informed, strategic decisions for the company's future.

Measuring employee experiences

We briefly mentioned above how employee retention and turnover is HR's biggest challenge. In this context, more and more HR teams are relying on HR metrics to prioritise measuring and tracking the employee experience.

This ensures that their employee engagement efforts and recruitment strategies translate into employee satisfaction and higher retention rates.

Lowering costs and increasing profit

An understanding of HR metrics can clearly show executives where to reduce costs and increase profits.

For example, data shows that a company can save as much as $22,000 annually per remote worker. Revealing that a large percentage of employees are more productive from a remote work setting may allow a company to reduce costs on rental office space, electricity, and other costs related to in-office reporting, depending on what their metrics show specifically.

 

How do HR metrics help successful companies?

Leadership has traditionally been depended on tracking a full range of KPIs, such as sales, marketing, manufacturing, and finance. However, more and more companies are recognising that modern workforce management metrics are just as important as their established counterparts.

These indicators allow HR directors, managers and teams to track changes in organisational performance and well-being in real time. Reporting can be automated to better support operations and management. The metrics support employees' work toward the organisation's business goals and empower executives to make data-driven decisions.

The focus should be on improving business-critical activities while alerting senior members of the management team when indicators are lagging behind. Identifying strengths and weaknesses is easier when key HR data is readily available to view and compare.

These comparisons can be, for example, between business units or between customer satisfaction and employee satisfaction.

 

 

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