Saturday, May 16, 2015

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. 

For questions or commentary regarding this article, contact Kandor Group, Inc. at 

Written and Published by Kandor Group, Inc.
All Rights Reserved. 2015