10 HR Metrics That Matter to Your C-SuiteMay 24, 2022
HR professionals use human resources metrics to guide decision-making every day. But when it comes to taking your data to the C-suite, make sure you’re presenting the HR metrics that matter most.
Go into your next meeting strong by knowing the top 10 HR metrics that matter most to your C-suite. As a human resources professional, you could spend hours looking at data to help guide your next big decision. But when it’s time to present to your company leadership, it’s helpful to know your audience.
What Are HR Metrics and Why Do They Matter?
HR metrics are key data points that help companies evaluate their human capital efforts and determine how effective their HR programs and initiatives are. Employee attrition, benefits participation, engagement, cost-per-hire, and more are examples of critical HR metrics.
The use of human resource KPIs has become a key component of making workplaces better in the past few years. In today’s cutthroat labor market, where 74% of companies are underperforming in their recruiting efforts, companies use the vital insights provided by HR statistics and metrics to measure which programs are working well—and which ones could use improvement. Plus, they empower organizations to make informed workforce decisions.
Key HR Metrics To Track
When it comes to using HR metrics to influence recruitment and retention efforts, it’s critical to track the effectiveness of your human resources initiatives throughout every stage of the employee lifecycle. This means starting with data points like time-to-fill and cost-per-hire. It also involves evaluating turnover rate, measuring performance and promotion rates, and examining the programs that can impact the employee experience, including diversity and inclusion, utilization, engagement, and pay equity. By doing so, not only will you find ways to improve your organization’s bottom line—you’ll set your company up to attract and retain the most qualified workers.
1. Employee Turnover and Retention Rates
When your employees leave, your company takes a hit – in both finances and morale. In fact, each departure costs about one-third of that worker’s annual earnings. And when your employee turnover rate is high, these expenses can add up to be quite a costly problem – a problem that your C-suite is noticing. People metrics can provide critical insights into potentially costly problems
Hiring and retaining great employees is vital to building and sustaining a successful business. Make sure you keep an eye on employee retention rate in conjunction with turnover rate. While these two HR metrics examine opposite behaviors, both provide valuable insight into employee satisfaction and problems throughout the employee lifecycle that may cause workers to leave.
Start looking beyond – and before – the exit interview to find the root cause of employee turnover. A modern workforce solution can utilize HR analytics derived from employee metrics to help you predict trends and flag employees at-risk of departure.
2. First-Year Turnover Rate
Losing an employee at any time can be a challenge. But consistently losing employees during their first year of employment should put a red flag on your revolving door. In fact, early turnover rate can especially impact your brand, recruitment budget, and team balance.
Considering the money, time, and resources it takes an employee to settle into a position, the astonishing fact that more than one-third of newly hired employees quit within their first year means your return on investment quickly diminishes if your first-year turnover rate isn’t under control. Look to common places of improvement, such as HR onboarding software and learning management systems to ensure your new hires are getting the support they need during their critical transition period.
3. Cost per Hire
As you look to replace your open roles with top recruits, it’s crucial for your team to bring a thorough estimate of your cost per hire to your company leadership.
Knowing your line-item expenses including internal and external costs, salaries, and total number of hires during a set period can not only help you make informed employee recruitment decisions, but can also help you plan ahead when it’s time to evaluate employee performance to see how your investment has truly panned out.
4. Time to Hire and Time to Fill Open Positions
You’ve all heard the phrase “time is money.” Well, that phrase has never been more true than when you’re trying to fill open roles (have we mentioned yet to have your cost per hire numbers handy?)
On average, it currently takes 36 days to fill an open role. But considering most good candidates are off the market within 10 days, it’s critical to hone both your time-to-fill and time-to-hire processes to small a window as possible.
While time-to-hire and time-to-fill are sometimes used interchangeably, there are key differences between these two HR KPIs. Time-to-fill refers to the time required for the entire hiring process, from creating the job opening to the time a candidate accepts the role. Time-to-hire begins the moment a candidate enters the pipeline and ends at the time they accept the job. While time-to-hire reflects the efficiency of your recruiting process, time-to-fill reflects how efficient your organizational hiring process is.
The longer a position stays open, the more money you’re spending on job board listings, your current employees taking time to interview and cover tasks, and your own team sifting through resumes. Employing a recruitment dashboard backed by an all-in-one modern workforce solution will give you a bird’s-eye-view of your reach while still collecting and evaluating data. You can also get creative with your strategies, like connecting with your number one candidates through a video interview to leave a lasting impression.
5. Diversity, Equity, Inclusion, and Accessibility (DEI&A)
Do your employees feel included? The value of diversity, equity, inclusion, and accessibility (DEI&A) in the workplace not only makes good people sense but business sense, too. That’s because diversity, equity, inclusion, and accessibility strategies are no longer “nice to have.” Candidates, employees, and clients are making decisions on who to work for and with based on these strategies. In fact, according to a Deloitte survey, “94% of executives and 88% of employees believe a distinct workplace culture is important to business success.”
By looking at your company’s company demographics, and gathering people metrics, you can empower your C-suite to make sound, data-based decisions rooted in a progressive strategy to remain competitive.
6. Pay Equity
A rising trend in HR is pay transparency, also known as pay equity – with some states already making this trend into law. As your company prepares to align with equity in the workplace, it’s important to make sure you don’t have any pay discrepancies that could highlight gaps due to gender identity, race, or other reasons.
Diving into your payroll metrics beforehand to analyze where you need to adjust will help you solve pay equity issues and get back on track with your overall diversity and inclusion goals.
7. Employee Performance Metrics
When it comes to performance reviews, your company leadership is looking at the big picture. How are employees performing? Are teams measuring up to their goals? How can data analytics improve the measurement of employees' performance? Naturally, it would make sense to look at a metric like percentage of performance goals met or exceeded and call it a day – but you also want to make sure human resources metrics like these are accurate.
Because most companies only do performance reviews once a year, goals can massively change due to reasons beyond the employees’ control – leaving 95% of employees feeling dissatisfied with their company's appraisal process, and 90% believing the process provides inaccurate information. Don’t dust off performance reviews once a year. Instead, make it a continuous process for both managers and employees, employing 360-degree feedback. Use a performance management tool that includes review and self-evaluation capabilities, to consistently monitor feedback and course-correct as needed.
Another tactic to track performance is through goal tracking and training completion within an HRIS. Many learning management systems (LMS) provide organizations with data points on how employees are engaging with mandatory and optional training. These HR metrics allow managers to see where workers are for learning and development targets, and where they could use support.
8. Internal Promotion Rate
Successful employee development not only leads to job satisfaction and retention, but it can also lead to an increased internal promotion rate when your top performers continue to grow their skill levels.
Employees – and managers – who are committed to high achievement can utilize a modern workforce solution and monitor progress with tracking linked directly to each employee record via an LMS. A continuous, on-the-go learning experience with the ability to incorporate peer-to-peer options could lead to a much more effective training program and a higher internal promotion rate.
9. HR Software Utilization
Your C-suite is always looking at the bottom line. If you’re using an HCM solution, are you getting the biggest bang for your buck by maximizing adoption and utilization? Take a look at how your employees are — or aren’t — using it. If they aren’t, it could be a sign that there’s an issue with poor experience or feature availability. A good, all-in-one HCM suite will highlight these key HR metrics and guide you on the best steps to improve the employee experience.
10. Employee Satisfaction
When you think about employee engagement, your mind might not gravitate to the hard numbers. But when people like their jobs, are proud to do it, and are more engaged, they’re likely to a) deliver on their goals mentioned above, and b) stay at their company longer.
Encourage an environment of open dialogue, where employees know that their voices are being heard. An employee survey tool for new hire check-ins, employee satisfaction, and exit analysis can help you measure the sentiment of your workforce, opening the door for continuous feedback and conversations to help you improve.
How HR Metrics Inform Strategy
Find the sweet spot between the data and your people. Use these human resource metrics to help paint a picture for your C-suite of the full scope and help move the needle forward. Monitoring HR KPIs is critical for building business cases and data-driven strategies.
As Josh Bersin puts it, “In a diverse world of workers, companies have to diversify their sourcing, create a holistic employment brand, prioritize internal mobility, simplify the candidate experience, and use AI and technology strategically.”
The good news? This is more than possible with the actionable HR metrics and strategic direction provided by data driven insights. With the right HR suite, you can easily identify trends, pain points, and determine the business impact of the challenges facing your workforce. HR KPI dashboards will help you continually monitor these key data points, so you can be proactive instead of reactive.
If you need assistance with finding a modern workforce solution that can create HR dashboards to visualize key performance indicators (KPIs), analytics reports, and much more, request a demo with Paylocity. We partner with you right from the start to ensure that your human resources KPIs and departmental priorities are met today, and that you’re set up for success well into the future.
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