On the back of the COVID-19 pandemic and the Great Resignation, the working world is finally starting to understand that people that are instrumental to growth and success.
Power has shifted from companies to the people—with talented professionals more than willing to quit their jobs if their needs aren’t met. Alongside this power shift, the role of HR has also evolved dramatically. Today’s HR professionals are responsible for curating people-first business strategies that answer the needs of today’s workforce.
Data-driven insights are key to increasing businesses’ bottom line. Let’s take a look at some of the most important HR metrics businesses can consider when upgrading their strategy to fit the modern working world.
How HR metrics can help boost your company’s bottom line
The data gathered by HR software such as HRIS or HCM systems are key to analyzing your business’ performance. Here are 10 important human resources metrics you can consider when looking for insights into your teams—with the ultimate goal of helping you drive forward as a successful company that puts its people first and has a healthy bottom line.
1. Time to hire
The first HR metric to consider is time to hire. The faster HR professionals can take a candidate with the right culture fit through the hiring and onboarding processes, the better you can support your teams. Optimizing your company’s time-to-hire process can help give your candidates a positive, professional experience. It can also help you boost the new joiners’ productivity and engagement with their new co-workers, and decrease the cost per hire.
2. Cost per hire
Hiring people is expensive and time-consuming. Tracking this metric can help you spot where the inefficiencies in your process lie—allowing you to tweak the underperforming stages. It also allows you to improve the experience for candidates and hiring managers, and decrease the overall hiring costs.
3. Engagement and retention rates
These two HR KPIs are inextricably linked—a high retention rate would indicate a good level of engagement, and vice versa. And with the general business world struggling to retain and engage its people, studying these metrics can help identify where and how you can improve engagement (and retention, by extension). This, in turn, can help lower costs associated with attrition and recruitment.
4. Rate of attrition correlated with risk
Data gathered on individual team members can help indicate their risk of attrition. The data used for this can be anything from the size of people’s teams, how long they’ve been with the company, how long since their last raise or promotion, or even the amount of time off they’ve taken recently. Insights into individuals’ risk of attrition can help you address any underlying issues before your valuable team member decides to resign, boosting retention rates.
5. ROI of learning and development programs
Having a healthy learning and development program shows that you’re willing to invest in the future of your people. Recent research shows that 45 percent of professionals would be more likely to stay with their current employer if they were offered skills training. This goes up to 87 percent for Millennials.
By investing in learning and development through upskilling, training programs, and internships, your company can help talented team members with high growth potential flourish. What’s more, your team will be content in the knowledge that they’re bettering themselves and are valued by their company.
From a financial point of view, the average cost of L&D is $1,071 per team member. Compared to the average cost per hire of $4,425, the benefits couldn’t be clearer.
6. DE&I of your recruits and teams
Progressive DE&I programs provide value to individual teams and overall companies. Diverse workforces bring new ideas and fresh perspectives to the table. This helps companies stay ahead of the competition: Recent studies found that diverse and inclusive companies are 35 percent more likely to outperform their competitors.
By studying your company’s DE&I rates, you can keep track of how inclusive and welcoming your workplace is for everyone, all while reaping the social and financial benefits diverse and inclusive workforces provide.
7. Job costing
Job-costing data can help you figure out the cost of individual jobs within your company structure. By assessing job costing, you can spot which departments and teams across your company incur higher costs and strategize on how you can reduce unnecessary spending.
8. High-performer productivity differentials
Studying the trends and productivity levels of your highest performers can give you insights into team members’ productivity levels and performance. It can also help you understand why levels vary between people and how to improve the performance and productivity of your entire team, one individual at a time.
9. Healthcare and wellness benefits
It’s always a good idea to benchmark your healthcare and wellness benefits—and their accessibility—against the competition. This will help you improve your own offerings—which can benefit your people and save costs in the long term.
Investing in programs that incentivize healthy behavior, normalize mental health discussions, and emphasize preventative care can help prevent burnout, foster team relationships, and keep your people’s energy up. Fixing or preventing these issues will translate into higher productivity and engagement.
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10. Effectiveness of your HR tech
Every effective HR department needs effective HR tech to automate processes and collect the data to gather deep insights into your people’s needs. Most importantly, great HR tech can help you minimize costs and maximize a people-first strategy. All while enhancing the experience of your team, ensuring you hire the right people, and providing you with data-driven insights about how to improve across all areas of the business.
The bottom line: HR metrics can help build a cost-effective, people-first business strategy
HR metrics are an invaluable resource for improving your company’s bottom line and driving success. People data is critical to building a successful modern business strategy. It can help you fine-tune programs and benefits that attract and retain the best talent, save on costs, and boost your bottom line—all while keeping you far ahead of the competition.