The Ultimate Guide to HR Metrics and Their Bottom-Line Impact

Friday, February 1, 2013 8:15PM

Maybe you've heard, but it is time for HR to deal with BIG DATA. Rather than add to the thousands of posts/articles/seminars on why that is needed, we want to give you the resources to make this daunting task much easier.

First off is our Guide to HR Metrics and Their Bottom-Line Impact. Below, we organized metrics according to the specific workforce planning initiatives and gave examples of areas where they impact the bottom-line. By parsing down data to the HR metrics and KPIs related to particular business issues, we can make the tasks associated with BIG DATA not so big.

To take these metrics further, our workforce analysts put together a Six Step Workbook for Calculating the Bottom-Line Impact of HR Initiatives and provided sample walkthroughs, including implementing an employee wellness program and a management training initiative. The Six Step Workbook is available for download here.


Key HR AreaRelated Metrics and KPIsBottom-Line Impact
Absenteeism
  • Absence Rate
  • Absence Days per Employee
  • Unscheduled Absence Rate
  • Unscheduled/sick Days per Employee
  • Overtime Expense
  • Overtime as a % of Labor Costs
  • Employee Performance/Productivity Index
  • Payment of salary/benefits during absence
  • Insurance/health care costs
  • Overtime costs
  • Cost of replacement workers
  • Impact on employees' morale and on customer satisfaction
  • Productivity impact on employees/team/department
Benefits/Educational Reimbursement
  • Tuition Reimbursement Request Ratio
  • Promotion Rates
  • Employee Performance/Productivity Index
  • Performance Differential Rate
  • Retention Rates
  • Benefit Costs per Employee
  • Total benefit costs vs. value (sales/revenue/productivity) employee will generate over course of employment
  • Correlation between benefit participation & business results
  • Correlation between benefit and turnover intentions
  • Turnover/Replacement costs (see employee separation)
Development/Management Training Program
  • Employee Performance/Productivity Index
  • Training Expense per Employee
  • Training Hours per FTE
  • Training Effectiveness Index
  • Retention Rate
  • Cost of development/training program
  • Correlation between participation &business results (i.e. retention, sales, customer service)
  • Impact on performance/productivity/profitability before and after training program (or split sample differential)
Employee Attitudes
  • Employee Satisfaction Rate
  • Employee Engagement Index/Score
  • Manager Quality Index/Satisfaction Rate
  • Voluntary/Preventable Turnover
  • Employee Performance/Productivity Index
  • Correlation between employee attitudes and turnover intentions
  • Turnover/Replacement costs as result of preventable attrition
  • Correlation between employee attitudes and customer satisfaction
  • Productivity impact on employees/team/ department
  • Impact on employees' morale and on customer satisfaction
Overall HR
  • Revenue per Employee/FTE
  • Sales per Employee
  • Profit per Employee/FTE
  • Labor Costs as % of Revenues
  • Units Produced per Employee
  • Workforce Productivity
  • Total Revenues
  • Total Cost of Workforce
  • Labor Costs
  • HR Costs
Recruiting/Hiring/Selection
  • External/Internal Hire Rate
  • New Hire Performance Rate
  • Performance Differential Rate
  • Quality of Hire Index
  • Source of Hire
  • Average Time-to-Fill
  • Average Cost per Hire
  • Time-to-Productivity
  • New Hire Turnover
 
  • Total compensation & hiring costs vs. value (sales/revenue/productivity) will generate over course of employment
  • Performance differential
  • Recruitment costs
  • Cost of vacant position (lost sales/revenues/productivity)
  • Savings from unfilled job
  • Impact on employees' morale and on customer satisfaction
Retention/Employee Separation
  • Turnover Rate
  • Voluntary/Involuntary Turnover Rate
  • Good/Bad Attrition Rate
  • High/Low Performer Retention Differential
  • Staffing Rate Approaching Retirement Eligibility
  • Retirement Rate
  • Average Workforce Age
  • Average Tenure at Termination
  • Correlation between turnover and profitability
  • Separation, replacement/hiring and training costs
  • Overtime costs
  • Cost of replacement workers
  • impact on employees' morale and on customer satisfaction
  • Productivity impact on employees/team/department
Safety Program
  • Number of Documented Safety Violations
  • Number of Defects/Accidents
  • Incidence Rates
  • Safety Training Expense per Employee
  • Workers' Comp Cost per Employee
  • Correlation between safety program participation & incidence rates
  • Cost of safety program
  • Workers' compensation costs
  • Cost of safety violations/penalties
Work-Life Balance Initiatives
  • Employee Performance/Productivity Index
  • Performance Differential Rate
  • Unscheduled Absence Rate
  • Voluntary/Preventable Turnover Rate
  • Cost of work-life balance initiative
  • Health care/insurance costs
  • Turnover/Replacement costs (see employee separation)
  • Correlation between benefit participation & business results
  • Impact on employees' morale and customer satisfaction
  • Productivity impact
For additional resources on HR Metrics and tying workforce initiatives to your bottom line, download our workbook Key HR Metrics and the Impact to Your Bottom Line