13 Best HR & Workforce Metrics Formula Examples

13 examples of human resources metrics calculations including HR yield ratio and cost per hire.

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Best HR Metrics for Human Capital Management 

A couple weeks I wrote about HR Metrics being the key to HR’s seat at the executive table given the fact that the HR and recruiting departments are non-income generating, having solid metrics are key to demonstrating to senior leaders and executives how strategic HR initiatives can help affect an organization’s bottom line.  But HR is more than just CPM or cost per hire so while the SHRM task force debates another two years, I thought it would only be fair to share with you some of my favorite human resources measurement examples, metrics, and formulas to help demonstrate and capture the value that your team brings to the table.

Strategic HR Metrics Examples

  • Monthly Turnover Rate = (number of separations during month / average number of employees during month) x 100).
  • Revenue per Employee = total revenue / total number of employees.  This is especially important when evaluating the cost of a lost employee due to voluntary or involuntary turnover.
  • Human Capital Cost = Pay + Benefits + Contingent Labor Cost / Full Time Equivalents.
  • HR to Staff Ratio = Employees / Human Resources Team Members.  This ratio is important since during the recession HR departments have reduced in number dramatically.  HR serves as the internal customer support staff just like call center customer service employees serve as external facing.
  • Return on Investment = (total benefit – total costs) x 100.
  • Promotion Rate =  Promotions / Headcount.
  • Percentage Female at Management Level = Female Management Level Employees/Management Level Headcount.  This formula can also be used when evaluating executives at a female level and other diversity categories like veterans and race.

Human Resource Metrics Examples

  • Employee Absence Rate = number of days in month / (average number of employees during month x number of days).  I have used this analysis to look at employee absence rates for different departments and managers.  Sometimes the best way to determine if their is a culture or manager opportunity is through evaluating the percentage of absences by department or manager.
  • Worker’s Compensation Cost Per Employee = total workers compensation cost for year / average number of employees.
  • Worker’s Compensation Incident Rate = (number of injuries and/or illnesses per 100 full-time employees  ∕  total hours worked by all employees during the calendar year) x 200,000.
  • Overtime per Individual Contributor Headcount = Overtime Hours/Individual Contributor Headcount.
  •  Average Employee Age = Total Age of Employees / Headcount.  This is an important metric in my mind when looking at succession planning and forecasting staffing areas of opportunity as older workers begin to consider retirement.  Also an important metric when calculating benefits cost for your organization.

Some people call leveraging metrics as part of your HR strategy an evidence-based HR practitioner.  I like to think of it as a smart organizational business partner who specializes in workplace analytics to drive these type of business decisions.  Part of being a well-rounded human resource professional who has the entire organization in mind when developing people strategy and other HR programs uses metrics, examples, analytics, and formulas to determine a program’s success or as part of any type of analysis, SWOT included.

Are there any metrics you use on a regular basis that I may have missed?  Leave a comment below, and let’s start a conversation on how you leverage HR metrics as part of your human resource and recruitment department.

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Comments

  1. The posted “Return on Investment” formula is incorrect.

    ROI = (Gain from Investment – Cost of Investment)/(Cost of Investment)

    The “x 100″ only applies when expressing ROI as a percentage. ROI is frequently expresses as a multiplier – e.g. “3.7 x” or “3.7 times” rather than as 370%.

    Note: ROI does not consider the time value of money or any uncertainties, as to the the costs or benefits and, consequently, can overstate the attractiveness of an investment.

    r.melrose@vision21.us

    Reply
      • Jessica,

        You’re welcome.

        The right set of metrics can bridge between CEO/C-suite perspectives and enterprise talent management practices, to directly connect TM initiatives and people manager behaviors to strategic outcomes.

        There’s plenty of upside (i.e. >10x ROI) available in every company — through the application of systematic processes that cut deleterious employee expenses (e.g. turnover, employee theft, workplace accidents, etc.), while boosting performance (e.g. productivity, innovation, employee engagement, customer loyalty, talent access/retention, etc.).

        As Peter Drucker noted: “What’s measured improves.” Some rather common metrics like “Time to Hire” and “Cost per Hire” have no strategic value, whatsoever.

        r.melrose@vision21.us

        Reply
  2. Interesting info. As a former HR professional, I can say that you have covered a lot of basis in your article. When it comes to overtime, also good to calculate standard vs. time and a half OT pay. Good info!

    Denise Turney
    Author – Love Pour Over Me
    http://www.chistell.com

    Reply
  3. Although it does not represent a “standard” metric, I believe it’s important to capture and report Efficiencies Achieved, or Cost Savings as a result of HR operations, particularly when reporting on a change in operational procedures.

    For example, if you make a change from external to internal recruiting, you report Recruiter Fee Savings Realized vs the Manpower Costs to provide those services in-house. This can be cumulative for the year vs previous year or previous method, or can be reported as a separate costperhire comparison metric. (( If you make a change the other direction, and spend more money, be prepared to find the positive metric – reduced time-to-fill, or improved manager-satisfaction-with-quality-hires, or something positive. If you look at it and can’t find ANY positive, that’s a sign to reverse direction, and at least report that the hypothesis failed, but lessons were documented and learned.))

    Likewise, if you invest resources in a significant change in your “benefits shopping due diligence”, and achieve a significantly lower rate for the same level of benefits, or hold the line on rates but achieve more benefits for the employees, then this should be reported as well.

    Ditto for Workers compensation insurance negotiations, safety efforts, training costs, etc.

    If you are activily seeking changes and cost reductions, you need to report these accomplishments in the metrics of other C-team members. These may not be on-going on a consistent manner, but I would rather report 3 or 4 big “wins” than 12 months of less significant trends.

    Everything we do for savings, goes straight to the bottom line ( well, almost “straight to” according to my previous CFO), so Capture the data on these Wins and publicize it at the Executive meeting !

    Paul N Benson SPHR |
    Reply
  4. Good post. This is a nice set of basic Human Resources Metrics.

    One favorite HR metric of one of our clients is ‘Regrettable Turnover’ (measuring how many people left the organization that were deemed to be effective or high potentials, taking into account performance ratings, peer and manager endorsements, 9-box reviews, etc).

    Reply
  5. please i want to know if what are the hr metrics we shoud meassure as an organization

    shirley |
    Reply

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