3 HR metrics your HRMS should track
HR metric tracking is a key benefit of any HRMS. If you’re new to HR systems or reviewing your current reporting, here are a few best practice reports which should be a cornerstone of any HR organization’s metrics.
1. Recruitment metrics
Recruiting costs are often expensive, especially if you need to use outside niche consultants to fill a specialized or niche role. ‘Time to hire’ is a heavily requested metric, as it’s often seen as an indicator of the effectiveness of your recruiting organization. As well, it’s helpful to analyze where your new hires are coming from, as certain sources may be a cost-effective means for further recruitment. For example, I’ve seen a company that relies heavily on engineering talent, which is often costly to recruit. They decided to try a pro-active campaign to recruit in engineering students as interns who ultimately became employees after a few years with the company. Effective reporting of HR metrics allowed the firm to identify this recruitment need and to fill in in a cost-effective manner, with engaged employees.
2. New hire metrics
There are various estimates of the ‘true’ cost of a new hire to an organization, in terms of the new employee’s salary as well as getting the person up to speed in the new organization. These estimates range from six months to two years of a person’s salary, depending on the source. Therefore, new hire reporting within your HRMS is essential to be able to understand a holistic view of the employee. Not only should you know the basic job details about a new employee, but it is also helpful to know their education, skills and competencies in order to be able to slot the person into a long-term development plan and add context to the HR metrics you are tracking.
3. Termination metrics
Many companies produce monthly term lists and some try and perform exit interviews to try and determine if organizational changes are needed. Termination is often an underused HR metric, when you consider the cost of a replacement employee. When looking at terminations, it is helpful to analyze the data as a whole, as well as slicing by details. Are terminations often in a certain age group or salary band? Or are there other data features that define terminations? If the data can predict terms, then corrective action can be taken in advance, to possibly avoid the situation overall.
HR metrics can be a complex topic, but if you focus on these three areas in-depth, you will start to reap some of the benefits of storing data in your HRMS. Applying context to these metrics is what will turn your jumble of data into lower termination rates and reduced onboarding costs.
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