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Top 5 HR Metrics Important to CEOs
Top 5 HR Metrics Important to CEOs
Trending in the
C-Level Suite are human resources metrics aimed at measuring HR’s ability to
positively impact the company’s financial and operational bottom line. In
discussion with several CEOs across multiple industries, the top 5 HR metrics are:
-Cost Per Hire
-Turnover Rate
-Retention Rate
-Accident Costs
-Compensation Expense Per Employee
These top 5 HR
metrics are not an exhaustive nor exclusive list of HR measures important to
company executives. However, they are the most commonly cited pivotal measures
of efficiency and effectiveness in HR’s strategy driving forward the company’s
business strategy.
HR Metrics in Action
Factors
influencing costs differ in subtle and marked ways in businesses. Therefore, the
top five HR metrics listed are defined generally in scope and serve as a
fundamental baseline in developing HR metrics that are unique defined and
strategically aligned with your company’s business strategy.
1) Cost Per
Hire – Calculated by adding total costs of internal recruitment costs with
external recruitment costs in given time period, and dividing that number by
the total number of hires made in the given time period.
2) Turnover
Rate – Calculated by identifying the total number of employees who separated from the company during a specific time period and dividing that number by the
average number of employees employed by the company during the specific time
period.
3) Retention
Rate – Calculated by dividing the total number of employees at the end of a
time period by the total number of employees at the beginning of the time
period.
4) Accident
Costs – Calculated by totaling workplace accident direct costs, which
include but are not limited to, compensation, medical injury and illness costs,
damage to building, property, materials, and equipment, and legal expenses, and
adding that total number with indirect accident costs, which include, but are
not limited to, accident investigation time, lost time wages, cost of temporary
staffing, delays in production, and increases in insurance premiums.
5) Compensation
Expense Per Employee – Calculated by adding total direct cash compensation
expense with total indirect non-cash compensation expense for a given time period, and dividing that number by the total number of hours worked (Labor
Hours) by all employees during the time period.
Written and Published by Kandor Group, Inc.
All Rights Reserved. 2015
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