Hr metrics slides

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))

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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

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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

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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

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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.