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HR Metrics: 08 fundamental indicators for any business

Métricas de RH que toda empresa deveria ter

HR Metrics: 08 fundamental indicators for any business

HR Metrics: 08 fundamental indicators for any business 2448 1632 Bluke

Establishing, analyzing and understanding HR metrics is one of the most important tasks to build a healthy company, with good performance indexes and team productivity.

By tracking these KPIs (Key Performance Indicators), the HR team can base decision-making within its strategies.

Of course, to define the main HR metrics, one must have well established the objectives and goals of the sector. Examples of Human Resources objectives are:

  1. Attract and retain the best talent;
  2. Increase team engagement;
  3. Develop a robust career plan model;
  4. Foster a healthier corporate environment.

These metrics and goals may require plans that involve developing short- to long-term dynamics for the entire enterprise. Therefore, they are fundamental for every company that wants to achieve its HR goals.

The Human Resources area and its metrics

For any area, paying attention to metrics is a smart way to track growth and the development journey to achieve goals. This allows you to ensure that the defined planning is followed, facilitating the possibilities of achieving the goals. Or if necessary, it gives inputs to pivot strategies.

Metrics are indicators that provide parameters for performance analysis of a given action. It will be the starting point for the HR team to monitor different stages of the process, having a clearer and more objective view of the actions applied and their respective receptivity.

Thus, there are numerous benefits of working with metrics in HR management. It is possible to measure the engagement of people with projects, the performance of professionals from each area, positive and negative points of internal processes. And the indicators that can contribute to the analyses. Here, we list 9 that can contribute a lot to the construction of Human Resources reports.  

1. Headcounts

This, perhaps, is the most practical indicator of measuring. For HR, headcounts are the metric that evaluates the number of employees in the company during a given period. It is possible to determine how the company has developed. 

For example, if the numbers lead to employee growth, it could mean that the company has evolved and is on the right track in its decision-making.

This information, when crossed with other metrics, such as productivity, turnover indexes, and employee satisfaction, for example, can provide numerous. Also, analyzing this indicator allows the development of accurate organization charts, a review of job descriptions and a better evaluation of the demands of each position.

To calculate this indicator, it is enough to add all professionals who have a contract with the company.

2. Turnover

One of the main goals of an HR team should be talent retention. This is the basis of the turnover metric (a term used to designate personnel turnover rates within the company).

The turnover rate implies analyses of the work environment in general and the reasons why an employee leaves the company. From it, one can extract information that directly implies the reason for an employee not wanting to remain in the organization.

Having a team that stays in the company for longer cycles strengthens the work environment and employee productivity. Therefore, from turnover metrics, it is possible to calibrate aspects such as:

  • Positions and salaries;
  • Benefits;
  • Review of goals and objectives;

Besides, from turnover analysis, measures should be taken to:

  • Build a more productive work environment;
  • Create a stronger brand image for employees;
  • Develop and maintain a desire of employees to be part of the company;
  • Reduce ancillary and administrative expenses arising from the processes of dismissal and hiring of new professionals.

When developing turnover metrics can be separated into voluntary turnover,  involuntary turnover,  dysfunctional turnover, and functional turnover.  

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3. Investments in benefits

To determine this indicator, we will count on the support of headcount indexes. From it is possible to determine the values allocated to benefits per professional.

To calculate the per capita cost of benefits just follows the following equation:

Cost per capita = Total invested in benefits/headcounts

Understanding this index helps build a more robust and competitive portfolio of benefits, contributing to the maintenance of happier teams, attracting new employees and decreasing turnover rates.

4. Productivity and performance

Metrics for measuring employee productivity can be different depending on the company and its business model. Generally, they apply to companies that have professionals who have activities directly linked to revenue generated in a given period. Therefore, they vary from company to company.

Productivity-related HR KPIs are relevant for assessing the ability to meet goals and objectives in each area. Besides, they make it possible to estimate the performance of your company concerning others in the market.

Here, data collection should take place with the support of resources for performance evaluation management, which, in the thesis, use scales to assign a weight to the competencies and executions of the employee.

We can use as an example the following scale:

  1. Note 1: Delivered tasks out of time and with quality out of the expected;
  2. Note 2: Delivered tasks on time, but with quality out of the expected;
  3. Note 3: Did not deliver the tasks on time, but with the quality within the expected;
  4. Note 4: Delivered the tasks on time and with the quality within the expected;
  5. Note 5: Delivered the tasks on time and with the highest quality than expected.

Therefore, it is simple to complete the percentage of growth, period by period, of the productive capacity of the employee. Just take the maximum scale value as a splitter by the note value. For example: 2/5= 0.4 or 40%.

5. Absences and absenteeism

The indicator of absences and absenteeism, or frequency, assesses the number of absences of the employee in each period.

Work absences are natural and may occur due to personal issues, diseases or family matters pertinent to employees. However, high absenteeism rates imply lower employee productivity and, in many cases, teams.

In addition to these issues, for companies that have more fixed schedules, analyzing the punctuality of the employee can act as a diagnosis to understand the engagement and commitment of the professional with his team and company.

Identify the reasons for employee shortages and focus your Human Resources team’s energies to combat absences due to demotivation, tiredness, lack of engagement, or disconnection with the company’s culture.

6. Recruitment and selection indicators

Recruitment and selection processes are the starting point in building the relationship between employees and the company. From the first exchanges of information, the link is built that can be fundamental to bring an engaged professional with the ideal fit,   not only for the job description of the vacancy but also with the culture of the company.

Within the recruitment and selection indicators, there are numerous items to consider and that can contribute to the definition of stronger strategies to deal with candidates. We suggest that you include in the report:

  • Number of resumes received and their main origins;
  • Average hiring time;
  • Cost of hiring;
  • Number of cases completed on time;
  • Turnover in recent signings;
  • Recruitment funnel conversion rate.

From these metrics it is possible to evaluate the effectiveness of contractions, detecting possible gaps in the operation that if diagnosed and treated can contribute to the attraction of professionals increasingly aligned with the organizational culture of your company.

7. Employee satisfaction

Use internal surveys to measure employee satisfaction with the various aspects of your company.

View your employee as a client, who has longings, pains, comments and suggestions about the management of the company. Climate surveys, NPS (Net Promoter Score) and other formats can contribute to the analysis. 

Determine a research objective, then establish the best approach method. And remember: it is important to create methods that allow employees to present their opinions. Often, questionnaires with identification or face-to-face interviews with internal figures of the company generate discomfort in the manifestation of employees.

8. Indicator of labor complaints

These metrics deserve a lot of attention. This index may be worrisome, as it evidences the possible non-compliance with the basic rights of the professional, often provided for in CLT.

This is a harmful index for the company. In addition to implying unnecessary financial expenses, they can also provide a stain on the brand before the market.

Here, often, outsourcing the activities of the personnel department and payroll can ensure legal compliance with all labor aspects since they are carried out by specialists.

How to use HR metrics

Although there are numerous human resources metric models, the ideal is not to use them all indiscriminately. The ideal scenario calls for HR teams to adhere to two metrics to the objectives and goals of the area in the face of planning. Otherwise, the time devoted to building reports that do not talk to goals and objectives will be an ineffective resource allocation.

Another point of attention is the timing of the periodicity of the indicators. In many scenarios, shorter periods do not correspond to reality, for example.

Be transparent with the construction of your indicators. Do not manipulate data to avoid results that look unpleasant. By doing so, it ensures that reports deliver a ready-made vision for decision-making that involves changing or maintaining strategies.

To conclude, always seek the help of digital tools to automate the process of building reports, reducing the chances of failures. Good software allows you to manage amounts of data with more quality and dynamism.

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