Unit V (HR 03)
Unit V (HR 03)
Unit V (HR 03)
HR Metrics
HR Metrics are used to gauge the effectiveness of various HR responsibilities and initia-
tives such as hiring, employee retention, training, and labor costs. Human resources de-
partments can use these metrics to improve their efficiency and demonstrate the value of
their activities to upper management.
Time to hire.
The average length of time that it takes for you to hire a new employee, from the time of
the job posting to their acceptance of an employment offer. You can calculate this by
adding up the time for each individual hire and dividing it by the number of new hires in a
given period.
Employee turnover.
Every business wants to have low employee turnover rates. If you are frequently losing
employees and having to hire new ones, there might be an issue with your hiring or
staffing process. Pay close attention to this number.
Absenteeism.
Absenteeism is the amount of time that your employees are absent from work for any rea-
son (vacation, sick days, other). Metrics for absenteeism are given as a percentage of the
total amount of available working days.
Employee engagement.
Employee engagement is one of the most difficult metrics to obtain because it cannot be
found using your financial records. You can issue company-wide surveys to your employ-
ees and ask questions rated one to five about their experience working in the company.
The results can be averaged to rate your level of employee engagement.
Diversity/EEOC numbers.
The diversity of your workforce is more than an arbitrary number - it could be the key to
your success. Diversity includes race, ethnicity, job type and salary. If your business is re-
quired to file an EEO-1 report with the Equal Employment Opportunities Commission, then
you should already have access to these metrics.
Making the right recruiting decisions is important. This image shows the employee’s life-
time value as the sum of all the HR decisions made about that employee.
Using this image, we can see that hiring someone who is more suited for the job has the
potential to create an enormous return on investment (ROI).
This is why recruiting the right people is so important. Whether you’re starting off by mea-
suring recruitment data or fine-tuning your recruiting metrics, this list will give you a great
overview.
1. Time to fill
This refers to the number of calendar days it takes to find and hire a new candidate, often
measured by the number of days between approving a job requisition and the candidate
accepting your offer. Several factors can influence time to fill, such as supply and demand
ratios for specific jobs as well as the speed at which the recruitment department operates.
It’s a great metric for business planning and offers a realistic view for the manager to as-
sess the time it will take to attract and hire a replacement for a departing employee.
2. Time to hire
Time to hire represents the number of days between the moment a candidate applies or is
approached and the moment the candidate accepts the job. In other words, it measures
the time it takes for someone to move through the hiring process once they’ve applied.
Time to hire thus provides a solid indication of how the recruitment team is performing.
This metric is also called ‘Time to Accept’.
A shorter time to hire often enables you to hire better candidates, preventing the best can-
didates from being snatched up by a company that does have a short time to hire. It also
impacts your candidate experience as nobody likes a recruiting process that takes a long
time. You’ll be able to see where the bottlenecks are in your hiring process and you can
work to remove them.
3. Source of hire
Tracking the sources which attract new hires to your organization is one of the most popu-
lar recruiting metrics. This metric also helps to keep track of the effectiveness of different
recruiting channels. A few examples are job boards, the company’s career page, social
media, and sourcing agencies.
Having a clear understanding of which channel works and which doesn’t, you’ll be able to
double down on the channels that are bringing you the most ROI and decrease spending
on those that aren’t. For example, if you see that most of your successful hires are not
coming from LinkedIn but your internal job board, then that’s the channel that you want to
be focusing on.
4. First-year attrition
First-year attrition or first-year / new hire turnover is a key recruiting metric and also indi-
cates hiring success. Candidates who leave in their first year of work fail to become fully
productive and usually cost a lot of money. First-year attrition can be managed and un-
managed.
Managed attrition means that the contract is terminated by the employer. Unmanaged attri-
tion means that they leave on their own accord (this is also referred to as voluntary
turnover). The former is often an indicator of bad first-year performance or bad fit with the
team.
The second is often an indicator of unrealistic expectations which cause the candidate to
quit. This could be due to a mismatch between the job description and the actual job, or
the job and/or company has been oversold by the recruiter.
This metric can also be turned around as ‘candidate retention rate’.
5. Quality of hire
Quality of hire, often measured by someone’s performance rating, gives an indicator of
first-year performance of a candidate. Candidates who receive high-performance ratings
are indicative of hiring success while the opposite holds true for candidates with low-per-
formance ratings.
Low first-year performance ratings are indicative of bad hires. A single bad hire can cost a
company tens of thousands of dollars in both direct and indirect costs. To read more about
how to assess these costs, check out our article on HR costing.
9. Selection ratio
The selection ratio refers to the number of hired candidates compared to the total number
of candidates. This ratio is also called the Submittals to Hire Ratio.
The selection ratio is very similar to the number of applicants per opening. When there’s a
high number of candidates, the ratio approaches 0.
Cost per hire consists of multiple cost structures which can be divided by internal and ex-
ternal cost. Internal costs include compliance cost, administrative costs, training & devel-
opment, and hiring manager costs. External costs would be background checks, sourcing
expenses, travel expenses, or marketing costs.
The Developer tab gives you quick access to some of the more advanced features and
functions available in Excel. By default, the Developer tab is hidden, but unhiding it is quick
and easy, and I’ve outlined the steps below.
The great news is that you only have to follow these steps once. Then, every subse-
quent time you open Excel, the Developer tab will be displayed for you.
How to Enable the Developer Tab
The steps to add the Developer tab are super simple.
1. First, we want to right-click on any of the existing tabs on our ribbon.
2. This opens a menu of options, and we want to select Customize the Ribbon.
3. Then, select the Developer checkbox and click OK.
SUMIF Function
The SUMIF function is a premade function in Excel, which calculates the sum of values in
a range based on a true or false condition.
It is typed =SUMIF:
=SUMIF(range, criteria, [sum_range])
AVERAGEIF Function
The AVERAGEIF function is a premade function in Excel, which calculates the average of
a range based on a true or false condition.
It is typed =AVERAGEIF and has three parts:
=AVERAGEIF(range, criteria, [average_range])
The condition is referred to as criteria, which can check things like:
• If a number is greater than another number >
• If a number is smaller than another number <
• If a number or text is equal to something =
The [average_range] is the range where the function calculates the average.