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HR Metrics 101 8/5/2015
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HR METRICS 101Presented by Eric Cook, SPHR, SHRM-SCP
AGENDA
• Why HR Metrics
• The Essentials
• Recruitment and Hiring
• Metrics in the Employee
Lifecycle
• Final Thoughts
HR Metrics 101 8/5/2015
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HR METRICS TELL A STORYTracking people metrics is one of the best ways to see how your workforce
and organization are performing
WHY HR METRICS ARE IMPORTANT
• Helping understand what is really happening
• Utilizing data to make decisions
• Predicting future trends or problems
• Allocating resources more efficiently
• Making a case for a new program or initiative
• Numbers
• Cost benefit analysis
Employee and business data can be one of the best ways to address serious organizational problems
HR METRICS AND THE STRATEGY CONNECTION
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
0 10 20 30 40 50 60 70
Revenue vs. Revenue Per Employee
Revenue Revenue Per Employee (RPE) Linear (Revenue) Linear (Revenue Per Employee (RPE))
HR Metrics 101 8/5/2015
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WHEN METRICS CAN HELP
Recruiting
difficultiesLow moraleHigh turnover
THE ESSENTIALS
• Time periods
• HR compliance
• Ratios
• Order of operations
• Excel and other applications
• Industry specifics
BASICS OF HR METRICS
HR Metrics 101 8/5/2015
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Low volume of
turnover, job
posting, or hiring
Hard to quantify
resultsSmall company
WHEN TO SKIP METRICS
BUSINESS STATISTICS 101
• Correlation does not mean causation
• Samples and populations
• Sample sizes, trends, and confidence
FOLLOW A SCIENTIFIC METHOD
• Set a goal:
• Calculate a test or hypothesis
• Observe
• Evaluate results
• Enact changes as needed
HR Metrics 101 8/5/2015
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• Protect employee personally identifiable data
• Unlawful to disclose genetic information about applicants or employees
• Do not collect genetic information unless a specific exemption applies
• Electronic records
• Disparate impact
• Physical examinations (and sometimes criminal records) only after job offer
METRICS AND COMPLIANCE
RECRUITMENT EFFECTIVENESS
• Recruitment advertising
costs
• Agency fees
• Employee referral bonus
• Signing bonus
• Employee travel costs
• New hire relocation cost
• Recruiter pay and benefits
• Hiring team time loss
• Background screening
• Selection and other tests
• Applicant tracking system
THE COST OF RECRUITMENT
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The effectiveness of most recruitment
sources is not tracked or measured.
Track where you post openings and what the result was
TRACKING THE SUCCESS OF A HIRING SOURCE
Track how effective your recruitment dollars are being spent:
• Assign a person or a team to track recruitment effectiveness
• Automate applicant selection by tracking where applications are coming from
• Analyze the cost per applicant from all of your recruitment sources
• Adjust your spending by shifting funds to more effective sources
Source: Indeed.com, “The Four A’s of Recruitment Advertising How to Track Results and Make the Most of Your Budget” https://ads.indeed.com/pdf/recruitment_advertising.pdf
TRACKING THE SUCCESS OF A HIRING SOURCE
Source Applicants Cost Cost Per Hire
Job Board 1 46 $25 $1
Job Board 2 27 $100 $4
Job Board 3 101 $175 $2
Job Board 4 9 $50 $6
Job Board 5 33 $50 $2
Employee Referrals* 5 $0 $0
Internal Applicants 1 $0 $0
*Employee referrals (if hired) often are offered a signing bonus to the referring employee
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COST PER SOURCE AND YIELD RATIO
HIRING ASSESSMENTS
APPLICANT VOLUME
• Entry level roles receive an abundance
of applications
• Hiring managers time is limited
• Good applicants can be hard to
separate from the rest
HR Metrics 101 8/5/2015
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• Establish multiple assessment “hurdles”
• Track monitor trends from successful
applicants
• Review tests for reliability and validity
• Ensure tests are job related
APPLICANT TESTING AND EVALUATION
Disparate Treatment Analysis
Job Title: WhiteBlack/African
American
Asian/Pacific
Islander
American Indian/Alaskan Native
HispanicMale Total
Applicants 10 10 10 10 10 50Hired 5 4 3 5 2 19
Selection Rate 50% 40% 30% 50% 20% 38%
Highest Group 50%
% of Highest Group
100% 80% 60% 100% 40%
• A criteria or test should not
disproportionally impact any
protected class
• Neutral tests or selection procedures
that disproportionately exclude a
protected class can be challenged
• Unless the test or selection procedures
are job-related and consistent with
business necessity
DISPARATE IMPACT
RELIABILITY AND VALIDITY
Reliability
• how consistently a test measures a particular characteristic
• meaningful test results should yield repeatable and dependable outcomes
Validity
• the quality a test measures and how accurately the test measures it
• provides relevancy to test results as it links them to their “real life” measure
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EMPLOYEE INDICATORS
HR AND TRAINING EXPENDITURES PER EMPLOYEE
Training vs. Performance Issues
Performance AttendanceOutput
EMPLOYEE DATA TRACKING
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EMPLOYEE ENGAGEMENT AND ORGANIZATIONAL HEALTH
• Organizations with employees who care about their jobs and teams almost always
outperform their other companies
• According to polling organization Gallup, if 100% of employees were fully engaged
in their jobs, the financial results would be between 450 and 550 billion dollars*
Source: Gallup, 2013 State of the American Workplace, Employee Engagement Insights for U.S. Business Leaders
BENEFIT UTILIZATION RATE
• A Company is increasing their non-monetary employee benefits in an effort to
attract and retain high performing millennial employees. They’ve been offering a
discounted membership a neighborhood gym but aren't sure that the cost is
paying off. To find out the utilization rate they will calculate…
• Benefit Utilization Rate =# employees who report using the discounted membership# employees who are offered discounted gym membership
BENEFIT UTILIZATION RATE
30 employees report using discounted gym membership150 employees offeref discounted gym membership = 0.2 x 100 = 20%
Knowing that their benefit utilization rate is only 20%,
should we continue to offer this benefit?
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GATHERING EMPLOYEE AND HR DATA
• Surveys and questionnaires
• Exit interviews
• Front line managers
• Customer service records
• Payroll and other HRIS software
• Performance evaluations
GATHERING EMPLOYEE DATA
EMPLOYEE ENGAGEMENT SURVEYS
A survey is a great way to get a pulse on your culture
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EMPLOYEE EXIT
Turnover Rate isthe total separations
divided by the average number of employees
in the time period.
CALCULATING TURNOVER
Total workforce size at start of period
+ Total workforce size at the end of period
= Average number of employees in the period
Voluntary separations (resignations)
+ Involuntary separations (terminations and layoffs)
= Total separations in the period
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EXIT INTERVIEWS
FINAL THOUGHTS ON HR METRICS
THANK YOU!
Eric Cook, SPHR, SHRM-SCPHR Consultant
Eric is a recognized leader in the HR field and has extensive experience in human resources, management, and training. Eric has held several senior HR positions, including as the HR & Operations Manager for an award-winning interactive marketing agency and as HR Director for a nationally known law firm. Eric graduated with a Bachelor’s of Science (BS) in Economics from the University of Oregon with a minor in Business Administration. Eric is also active in the community, volunteering with the regional Human Resources Management Association Advocacy Team and with youth training programs.
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