What are the most important analytics that HR should be measuring and tracking?
To help HR focus on the right metrics in managing their workforce, we asked HR managers and business leaders this question for their best insights. From revenue per employee to headcount net balance to employer commitment to employee needs, there are several important metrics that HR needs to track and analyze to best address the needs of the workforce.
Here are 10 important metrics HR should be tracking:
- Revenue Per Employee
- Employee Loyalty
- Benefits Usage
- Employee Satisfaction
- Headcount Net Balance
- Employee Engagement
- Employee Retention
- Engagement After Candidates Apply
- Employer Commitment To Employee Needs
Revenue Per Employee
One of the most critical metrics that HRs should measure and track is revenue per employee. Revenue per employee = Total revenue / Total no. of employees.
This indicator demonstrates the effectiveness of the company as a whole. The "revenue per employee statistic" serves as a benchmark for the effectiveness of recruited staff. It gives a rough figure of how much an organization makes per employee. Therefore, the HR analytics list should start with revenue per employee.
Madhurima Halder, Content Manager, Recruit CRM
In times of shifting priorities, companies must offer significant benefits to retain and attract talents. It is because of these shifting priorities that it is even easier to lose talents to a competitor that can make more attractive offers. Therefore, it is recommended to cultivate employee loyalty.
The first step to measuring it is to establish a standard and compare competitors to evaluate how your company performs. Since most companies use the % internal promoters - % internal detractors, this is a great place to start.
Good indicators and questions that can help you apply this method are:
- Trust - What can we do to make you continue to trust our company?
- Satisfaction - How likely are you to build a long-term career here?
- Respect - What is your opinion about our brand?
By asking your customers such questions, you will be able to get real numbers and start measuring customer loyalty in an easier and more effective way.
Ricardo von Groll, Manager, Talentify
The last few years have profoundly impacted individuals, communities, and organizations. Given the pandemic, social unrest, and other global issues, companies, in particular, have broadened workplace benefits to address the amplified needs and desires of their people — who represent diverse populations. Intentional companies make efforts to offer a holistic benefits package that covers various areas that employees value. The past few years have seen an uptick in employee benefits and wellness offerings such as flexible/unlimited paid time off, access to mental health resources, and financial support.
As we look to the future, leaders must assess the use and impact of these expanded resources on employee retention and wellbeing. Evaluating benefit usage will accentuate those resources most in-demand and shed light on those resources that may be under-utilized due to communication, service delivery, seasonal necessity, or another reason.
Chelsea C. Williams, Founder & CEO, Reimagine Talent Co.
There are many metrics that HR should track and measure, but a significant one is Employee Satisfaction. Counting the number of employees who would recommend your company as an excellent place to work and monitoring the amount who wouldn't helps indicate overall employee and company-wide satisfaction.
Wendy Makinson, HR Manager, Joloda Hydraroll
Headcount Net Balance
The lifeblood of organizations are people and understanding the gains and losses to the workforce is vital to understanding the health of that lifeblood. The headcount net balance looks at the starting headcount and adds in new hires and subtracts terminations. There are many different ways to augment this: by Gender, by function within the organization, by specific job, etc. You can also consider movements (e.g., transfers, promotions, demotions, etc.). The headcount net balance is best displayed as a waterfall chart, but it's power to gauge net growth or shrink in an organization is unparalleled.
Dan Lapporte, Leader, People Analytics, Lucid Motors
One of the most important analytics that HR should be measuring and tracking is employee engagement. Employee engagement is a measure of how connected and invested employees are in their work and their company. Companies should of course use a measure that is best suited to their business, but measuring employee engagement can provide deep insights into whether employees feel meaningfully connected to their work and company. Additionally, a high level of engagement has been linked with better performance outcomes, so tracking this metric can help you identify issues early on and take corrective action.
Linda Shaffer, Chief People Operations Officer, Checkr
Given current inflation, even with modest wage growth employees' real purchasing power is eroding and many will see switching companies as the only path to meaningful income growth. With a competitive job market, backfilling them is likely to be much more expensive and may create compensation disparities that drive even more tenured employees to resign.
Employers can see this by looking at one metric: the YOY percent change in median base pay, when comparing new hires (<1 yr tenure) against tenured employees (>1 yr). If new hires are above the inflation rate, and tenured employees are below, you have fertile grounds for this negative spiral to begin. Use this insight to open leaders' eyes, smartly use targeted compensation adjustments, and other levers to improve your retention before this cycle starts.
Matthew Hamilton, Vice President, People Analytics, & HRIS, Protective Life
One of the most important metrics in HR is Turnover. Turnover is not just about reporting on the number of people leaving, it is about understanding why and where turnover occurs, which will give you the opportunity to create a targeted actionable plan.
Deep diving into your turnover numbers can provide you with important insight on correlations between employees who are leaving and what are the driving factors for that, whether it is related to position, management, compensation, tenure, performance, work-life balance, etc. After identifying these risk factors, we can predict who might be at a high risk of leaving in the future and create risk groups that can be monitored more closely by leadership.
By understanding the host of factors that influence turnover we can seize on the opportunities and engage employees through actionable and targeted plans, and this makes turnover a must-have data point for HR teams.
Momchil Minchev, Human Strategy Manager, HR Systems & Analytics, ADS, Inc.
Engagement After Candidates Apply
The most obvious answer would be the amount of qualified applicants, so I’m gonna share one that is a little less obvious. That is the level of engagement recruiters and hiring managers have with qualified applicants after they apply. A best practice is within one to three business days based on the level of difficulty of filling that role.
Creating an internal process of tracking how quickly candidates are initially contacted by the recruiter, how quickly hiring managers are engaging in interviewing these candidates, as well as how often and how soon the chosen candidate is made an offer. This will start to uncover the efficiency or deficiency in certain areas where great potential employees are often lost in the process.
Rollis Fontenot III, Founder, HR Maximizer Inc
Employer Commitment to Employee Needs
There is much to be said about preventing and preempting problems before they become issues. The Great Resignation brought to light how unhappy our teammates were in various aspects of their work life. Today’s organizations recognize that as we ask individuals to bring their “true selves” to work, we must do the work to create an environment that reflects and supports such statements - and with doing the work comes evaluating how we are performing in this area and asking difficult questions such as how are we doing as an organization to support our employees through trauma/traumatic events?
How well are we doing when it comes to creating space for employees to be their true selves? Asking difficult questions is how we garner better feedback and demonstrate our interest in doing better - our feedback and engaging our employees to generate better solutions is how we can demonstrate our commitment to doing better.
Cindy Rodriguez, Partner, Adirondack Diversity Solutions LLC