Question

Please conduct research on HR metrices and select 5 key metrices that you would use to track the value add of the human resources in your business as an entrepreneur. Explain how each works and how it will add value to your business.

Answer 1

Human Resource (HR) metrics are parameter used to know the cost value and impact of HR initiatives. The HR metrics reveals the efficiency and effectiveness of the HR policy.

There are many types of HR metrics but the below 5 metrics are most critical parameters,

1) Hiring Time – It is very much important metrics. It is number of days between a position opening up and a candidate signing the job contract. It’s an best way to measure the efficiency of the recruitment and provides insight into the difficulty of filling a certain job position.

Benefit - If the hiring is done on time than there would be no obstacles in the processes and all the work of the organization will run smoothly.

2) Costing of employee- The ‘cost per hiring metric shows how much it costs the company to hire new employees. This also serves as an indicator of the efficiency of the recruitment process.

Benefit – If the organization hire a person with suitable allowance than there would be benefit to both the organization and employee. If the employee is hired above the suitable amount than company would waste there resources and if the employee is hired below suitable amount than employee can leave the job.

3) Early left out ratio - Early leaver metric indicates whether there is a mismatch between the person and the company or between the person and his/her position.

Benefit - Early turnover is very expensive. It usually takes 6 to 12 months before employees have fully learned the ropes and reach their Optimum Productivity Level. Less the early left out ratio more the productivity of the organization.

4) Benefit per employee: This metric shows the efficiency of the organization as a whole. The revenue per employee metric is an indicator of the quality of hired employees. Basically the metrics tells about the revenue upon the total number of employees engaged.

Benefit – If the benefit per employee is more than what the company is paying than it is good hire but the benefit per employee is less than what is been paid than there is problem in hiring or problem in the business environment.

5) Absenteeism -, absenteeism is also a strong indicator of dissatisfaction and a predictor of turnover. This metric can give information to prevent this kind of leave, as long-term absence can be very costly. Absenteeism of the employee can be for many reasons like not liking the jog, stress environment, monotonous working rather than actual valid reasons. Organization losses the productivity if there are much absenteeism in the company.

The above are the main HR metrics which helps to increase the organization performance and process optimization.