We’ve created a list of 3 interesting and different ways to look at your HR department performance that you can use as part of your overall business strategy.
Employee Retention Metrics
Tracking employee retention metrics is a good indicator of employee satisfaction and overall management of hiring and recruitment. A high employee retention number means the cost of recruitment and onboarding is lowered.
To calculate employee retention you would add all the years of service for your full staff complement, this number should increase year to year. For example, if you have 5 employees with 3 years in their roles each, then your seniority level is 15 years and the following year should have increased to 20 years.
Cost of recruitment
Cost per hire is arguably one of the most important recruitment metrics you need to know about. Why is this important? Cost per hire will show you how effective your recruitment processes are, and for tracking your recruitment budget. You can compare this number with data from each year to spot any significant changes and plan ahead for growth within your company. Multiply the figure with how many new employees you plan to hire in the coming financial year.
External recruitment is easy to calculate as you already have a price you’ve paid for each candidate (usually around 15-20% of their annual CTC.)
For Internal recruitment calculate how many hours it takes you to recruit internally and add an hourly price tag to the search. For example: if your HR Generalist’s hourly rate goes at R200 and they used 40 hours of their time for the search, that position cost you R8000 to recruit for.
Calculate your overall recruitment expense and divide it by the number of total new recruit salaries. If this number is lower than the agencies asking (15 – 20%) it means you managed to save on your recruitment efforts.
Training provided vs promotions given
Upskilling is a wonderful benefit to attract employees to your company, but they also need to make sense to the overall business strategy you are working towards. How many of the employees that you trained have been promoted during the year?
A healthy ratio to look for is 1 out of 3 employees who got training for the opportunity to be promoted.