HR City

9 Metrics Every HR Must Know

By Pradeep Shankar, SiliconIndia   |   Monday, September 3, 2012
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Bangalore: The potential, value and effectiveness of HR are measured on how they hire, train, develop and lead a team in his organization. Hiring should be in-focus with the mission of the company. HR should take these eight basic metrics in to consideration and implement them for the well being and improvement of the organization.

1. Desired Action Percentage (DAP):
It is similar to conversion rate. It can be calculated by the formula DAP = visitors who execute the desired action / total visitors.
It depends on how good your market in targeted visitors. Analyzing your results over time is a great way to evaluate DAP

2. Monthly Turnover Rate:
(Number of separations during month / average number of employees during month) x 100) gives the Monthly Turnover Rate. In a HR context, turnover is the rate at which an employer gains and losses employees. So if an employer is said to have a high turnover relative to its competitors. This makes the employees of that company have a shorter average tenure compared to other companies in the same industry.

3. Revenue per Employee:
It is the total revenue / total number of employees. Evaluating the cost of a lost employee due to voluntary or involuntary turnover is the main purpose of this. "Revenue Per Employee is the only metric that makes sense when viewing the performance of an HR Leader If it's about the business, there's no better measurement than revenue" as written by Kris Dunn back in his article Revenue Per Employee: The Only Performance Goal You'll Ever Need for HR Leaders published in the web site hrexaminer.com

4. Human Capital Cost:
Pay + Benefits + Contingent Labor Cost / Full Time Equivalents is the formula to evaluate Human Capital Cost. Equilibrium can be achieved in between the required resources. The reason is Quantification of the Human Resources value helps the management to cope up with the changes in its quantum and quality.


5. HR to Staff Ratio:
It can be calculated by the formula Employees / Human Resources Team Members. During Recession times when employ number is greatly reduced this ratio is very important.

6. Return on Investment:
(Total benefit - total costs) x 100 is the formula to calculate this. The investment should not be undertaken if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should not be undertaken. So ROI plays a crucial role.

7. Percentage Female at Management Level:
Female Management Level Employees/Management Level Headcount gives the Female Percentage at Management Level. HR's need to examine their levels of support offered to women to fall in line with quotas on female board representation, a solution currently in discussion in some countries as written by April Mackenzie, Global head of public policy and external affairs in the News article Proportion of women in senior management falls to 2004 levels published in the web site of internationalbusinessreport.com

8. Promotion Rate:
Promotions / Headcount is the formula to determine Promotion Rate. "Promotion of qualified employees is a people-management strategy used to retain staff as a direct response to continuing improvements in the economy." according to the SHRM 2006 U.S. Job Retention Poll Findings published in shrm.org

9. Visitor Engagement Degree (VED):
The formula is VED = unique visitors/ total pages viewed. It a metric intended to determine how "engaged" site visitors are.
"If the visitor arrived with the intent of getting your phone number, the fewer pages they have to click the better" says Jeff Haden in his article "2 Web Metrics Every Entrepreneur Should Know" on inc.com.

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