HR Metrics

HR metrics provide leaders with point-in-time and trend data to assess the performance effectiveness of their human capital.  The human capital data focuses leaders on the business intelligence gained by examining directly the connection between employee performance and business results.  The measurements provide data needed to design or redesign company benefit programs, target performance improvement efforts to a specific issue, and quickly identify turnover and staffing areas creating unnecessary expense to the organization.  The size, business issues and objectives of a business will likely influence the number and choice of metrics that are used.



Note: Total FTE is used in many of the HR metrics.  Ideally, FTE represents the full-time equivalent of all full-time and part-time employees as well as contingent labor hours. If contingent labor data is not readily accessible or relevant to your business, it can be excluded from the FTE calculation.

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Business Literacy

METRICFORMULARELEVANCE
REVENUE FACTOR$ REVENUE / TOTAL FTECreates a productivity measurement to indicate how much time was spent generating a given amount of revenue.
INCOME FACTOR($ REVENUE – OPERATING EXPENSES) / # TOTAL FTECreates a productivity measurement to indicate how much time was spent generating a given amount of profit.
HUMAN CAPITAL ROIREVENUE – [OPERATING EXPENSE – (COMPENSATION + BENEFIT COST)] / (COMPENSATION & BENEFIT COST)Helpful in analyzing whether staffing costs are optimized against organizational revenues.
HUMAN CAPITAL VALUE ADDED[REVENUE – (OPERATING EXPENSE – REGULAR AND CONTINGENT EMPLOYEE COMPENSATION & BENEFIT COST)] / # TOTAL FTECalculates the value added to the organization with the workforce’s knowledge, skill, and performance.


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Compensation & Benefits

METRICFORMULARELEVANCE
TOTAL COMPENSATION REVENUE RATIO$ COMPENSATION & BENEFIT COST / $ REVENUEIncludes compensation & benefit costs for both employees and contingent workforce. Indicates workforce spend as a percentage of revenue. May add cost of turnover and absenteeism to gain insight into total cost of workforce as a percentage of revenue.
HEALTH CARE COSTS PER EMPLOYEETOTAL HEALTH CARE COSTS / TOTAL EMPLOYEESHelpful with ongoing assessment of healthcare costs and program assessment.
BENEFIT COST FACTORBENEFIT COSTS / TOTAL NUMBER OF EMPLOYEES ON PAYROLL HEADCOUNTHelpful with ongoing assessment of benefit costs and benefits administration.
AVERAGE TOTAL COMPENSATION PAID TO LABOR FORCETOTAL COST OF COMPENSATION & BENEFITS FOR REGULAR AND CONTINGENT WORKFORCE / # TOTAL FTECONTINGENT EMPLOYEE COMPENSATION & BENEFIT COST)] / # TOTAL FTEUseful metric for consistently measuring cost of compensation regardless of utilization of contingent workforce.


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Employee Relations & Staffing

METRICFORMULARELEVANCE
ABSENCE RATE[(# DAYS ABSENT PER MONTH) / (AVE. # OF EMPLOYEES DURING MONTH X # OF WORKDAYS)] X 100Useful for assessing level of employee engagement as well as potential benefit derived from wellness initiatives.
ABSENCE COSTCOMPENSATION PER EMPLOYEE PER HOUR X HOURS ABSENTCan also be calculated as a percent of the revenue per employee per hour rather than compensation per employee per hour. Helpful in understanding the financial impact of absenteeism.
TURNOVER COSTTOTAL COSTS OF SEPARATION + VACANCY + REPLACEMENT + TRAININGProvides a cost to understand the value of retaining high performing employees.
TURNOVER RATE(# OF EMPLOYEES EXITING THE COMPANY DURING THE PERIOD / AVERAGE ACTUAL # OF EMPLOYEES ON STAFF DURING THE PERIOD) X 100Helpful gauge for monitoring an organization’s current versus turnover as well as conducting industry comparisons.
INVOLUNTARY TERMINATIONS AS A PERCENTAGE OF HEADCOUNT# INVOLUNTARY SEPARATIONS / REGULAR EMPLOYEE HEADCOUNTCan be a useful indicator for assessing leadership skills, hiring practices, and employee development.
VOLUNTARY TERMINATIONS AS A PERCENTAGE OF HEADCOUNT# VOLUNTARY SEPARATIONS / REGULAR EMPLOYEE HEADCOUNTCan be a useful indicator for assessing leadership skills, hiring practices, and employee development.
SEPARATION RATE# TOTAL SEPARATIONS / REGULAR EMPLOYEE HEADCOUNTCan be a useful indicator for assessing leadership skills, hiring practices, and employee development. Also, useful when combined with turnover rate to understand cost of turnover to the organization.
FIRST YEAR RESIGNATION RATENUMBER OF RESIGNATIONS WITHIN 1 YR OF EMPLOYMENT / HEADCOUNT FOR SAME 1 YEAR OF EMPLOYMENTUseful in assessing quality of hiring, training and onboarding programs.
CONTINGENT PERCENTAGENUMBER OF NON-PERMANENT FTE / # TOTAL FTEUseful in maintaining an awareness of the balance of the workforce that is contingent versus regular employee.


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Diversity

METRICFORMULARELEVANCE
AVERAGE EMPLOYEE AGETOTAL AGE / HEADCOUNTUseful in maintaining awareness and proactively managing an age diverse employee population.
FEMALE PERCENTAGENUMBER OF FEMALE EMPLOYEES / HEADCOUNTThis metric can also be applied specifically to categories of employees, such as management and executive level employees.
RACIAL MINORITY PERCENTAGENUMBER OF RACIAL MINORITY EMPLOYEES / HEADCOUNTThis metric can also be applied specifically to categories of employees, such as management and executive level employees.


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Organizational Development & Employee Development

METRICFORMULARELEVANCE
READINESS# CRITICAL JOBS WITH A READY REPLACEMENT / TOTAL # CRITICAL JOBSMeasures the percent of important positions where a qualified team member is prepared to step in.
CAREER PATH RATIOPROMOTIONS / (PROMOTIONS + TRANSFERS)The number of employees moving upward in the organization as a percentage of all employee movement. Useful in assessing quality of hiring and employee training programs.
MANAGEMENT RATIO# TOTAL FTE / # MANAGEMENTUseful reference for number of management compared to employees. Can be especially helpful when compared to industry benchmarks or historical company data.
MANAGEMENT SPAN OF COUNTROL# TOTAL FTE / (# MANAGEMENT + # EXECUTIVES)Useful reference for number of management compared to employees. Can be especially helpful when compared to industry benchmarks or historical company data.
TRAINING HOURS PER EMPLOYEETRAINING & DEVELOPMENT HOURS / # TOTAL FTEMetric that is broad indicator of amount of training effort that is occurring.
PERCENTAGE OF EMPLOYEES TRAINEDNUMBER OF EMPLOYEES / # TOTAL FTEMetric that indicates how much of the organization is participating in training. Number of employees may also include contingent employees.