Metrics that Help HR Build a Better Organization
There are plenty of ways to measure your company’s success, but sometimes taking a performance inventory of your organization isn’t always first on the to-do list. Creating goals to build your organization is motivating for the whole team. However, implementing those goals isn’t always clear. By employing SMART goals and using the right metrics to evaluate your organization, you can set your team up for success in 2021.
What Metrics Can Help HR Build a Better Organization?
Whether you’re looking to help build your organization’s culture, attract strong candidates, or retain your current workforce, the following metrics can help keep you on track:
- Turnover Rate: Turnover rate can be calculated in two different ways: voluntary and involuntary. Voluntary turnover occurs when an employee leaves a job, either because they got a new job elsewhere, took an internal transfer, or retired. This type of turnover is typically more expensive to businesses because they often involve the loss of high-performing employees. Involuntary turnover includes layoffs or reductions in force and terminating poorly performing employees. Involuntary turnover is considered undesirable because it can reflect on the company’s management and financial operations. Turnover rate is calculated “by taking the number of separations during a month divided by the average number of employees, multiplied by 100.”
- Time-to-Hire: Time-to-hire is how much time that passes between when a job candidate enters your hiring process and when they accept the employment offer. This metric is calculated by day accepted minus day applied. Since quality applicants aren’t available on the market for long, reducing your average time-to-hire will increase your chances of attaining top talent. Strategies include attracting a larger applicant pool with a simple application process, ensuring your recruitment process exists online, and responding to applicants within a timely manner.
- Retention Rate: According to SHRM, the average cost-per-hire for companies is somewhere between $4,000 and $5,000, and the average time-to-fill a position is 36 days. By having an active retention strategy, HR teams can save money and help save their teams from burnout by avoiding gaps in the workforce. Typical strategies attempt to lower employee turnover, prevent attrition, increase retention, and foster employee engagement. Some ways that organizations work toward this include better benefits, effective onboarding, and regular 1:1 meetings with direct managers.
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