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HR metrics are a vital aspect of managing any successful team. They are key indicators of how employees' performance, engagement, and morale are tracked and help inform decisions about the company's hiring strategy. A well-defined set of HR metrics can ensure that the HR team is focused on the right goals and that resources are allocated appropriately.
Some HR metrics that many companies prioritize are:
1. Source-of-Hire: This helps track which recruitment methods are the most effective in bringing new talent into the organization.
2. Time-to-Fill: This metric tracks how long it takes to fill an open position, from when it is posted to when a candidate is hired.
3. Employee Retention Rate: This measures how many employees stay with the company for a certain period
4. Time to Hire: This metric tracks how long it takes from when a candidate is interviewed to when they are hired.
5. Cost Per hire: This shows the total amount spent to find and hire a new employee.
6. Quality of Hire: This tracks how well a new hire performs in their position.
7. First-year attrition: This measures the number of employees who leave within their first year of employment.
Each of these metrics plays an essential role in helping companies plan talent acquisition and define budgets and timelines around new talent. For this reason, strategic HR metrics should be closely monitored and reviewed on a regular basis. Having a comprehensive HR metrics dashboard can help to easily track these metrics, enabling decision-makers to make informed decisions regarding resource allocation and employee engagement.
Additionally, by understanding the benefits of strategic HR metrics in an organization’s process, companies are able to better identify areas for improvement and ensure that they meet or exceed goals set by management. For example, an HR team using Pillar's Interview intelligence software should be able to reasonably assume (barring a large disruption in the economy or the business that their new employee attrition rate will decrease by +/- 50% in the next year, just by using the platform with every new hire.
It's easy to go broke hiring the wrong people as the costs and loss of knowledge can be catastrophic for a new or growing business (especially). Having strategic HR metrics in place is essential for making sure that the organization is spending its resources wisely and getting the right people on board. Through tracking key performance indicators (KPIs) such as source-of-hire, time-to-fill, employee retention rate, cost per hire, quality of hire, and first-year attrition rates, organizations can have a more accurate view of their recruitment process and can make better decisions around resource allocation and employee engagement.
We've already talked about the basic HR metrics to consider when on the topic of hiring, now let's look at an example HR metrics dashboard to track them. There are quite a few (some suggest as many as 20 metrics) to measure in the hiring process - as such, there are many different types of HR dashboards.
An HR metrics dashboard should provide a comprehensive overview of the company's recruitment and retention efforts, including metrics such as source-of-hire, time-to-fill, employee retention rate, cost per hire, quality of hire, and first-year attrition rates. The dashboard should be customizable so that it can be tailored to an organization's specific needs and should be updated regularly to ensure accuracy.
Having all your vital HR metrics in one place is a powerful visual to identify challenges in the hiring process. This is why it's essential for any organization looking to track key performance indicators (KPIs) in the recruitment process. The data collected from an HR metrics dashboard can provide valuable insights into areas for improvement, allowing organizations to adjust their strategies accordingly. Additionally, having an effective HR metrics dashboard will help startups and growing companies stay on track when it comes to meeting their goals for hiring and retention.
In addition to tracking the key HR metrics, dashboards can also monitor employee engagement. Using an HR dashboard with built-in features like pulse surveys and team sentiment analysis, organizations can gain valuable insights into how employees view their workplace. This data can be used to adjust strategies around hiring and employee retention as well.
Overall, having access to the right HR metrics is key to managing a successful team or organization. Having an effective HR dashboard in place can help ensure that resources are allocated appropriately and that decision-makers have the data they need to make informed decisions regarding recruitment and retention. As such, it's essential for any company looking to stay competitive in the hiring market.
Allocating the budget towards a comprehensive HR dashboard can pay dividends in the long term, as it can provide invaluable data for ensuring that your organization is managing its talent acquisition and retention processes with maximum efficiency. Not only that but having access to employee engagement metrics will also help identify areas of improvement and lead to higher rates of productivity and satisfaction.
To sum up, having an effective HR dashboard is essential for any organization looking to stay competitive in the hiring market. Having access to accurate metrics can provide invaluable insights into areas of improvement and enable decision-makers to make informed decisions regarding resource allocation and employee engagement. With the right data, companies can ensure that they are meeting their goals for recruitment
So now let's get into some HR metrics examples to showcase what an efficient and effective hiring strategy actually looks like. The HR metrics that matter most are going to vary for each business, but most would say that Cost-per-hire, Time-to-hire, and First-year attrition rate (new employee turnover) are the three most important.
Let's use the example of hiring new software engineers. You're a rapidly growing company hiring 4- 5 new engineers per month and have an estimated attrition rate of 20%. Your Cost-per-hire is $4,000 and your time-to-fill is 17 days. To calculate the cost per hire formula, you multiply the total cost of recruitment by the number of hires made. In this case, it would be $(4000*5) = $20,000 (per month) in hiring costs.
Let's say they start at a $90,000.00 salary, but you lose 20% of them in 9 months. (90,000/12)*9 = $67,500. That means you have an average annual turnover cost of $54,000 (including recruitment costs). So for every 6 engineers you recruit per year, the cost to your company is around $100,000! and then you add onboarding and training costs, knowledge loss, and other factors. You can see how employee attrition for developers could cost a company $150- 200K per employee - and that not including factors where employees go to a competitor and lost IP.
This is why many companies turn to video interview platforms like Pillar's interview intelligence software for Ai powered insights into candidates. The platform can help you hire objectively, remove bias, provide interviewer coaching insights, and ensure you get the best candidate for the job.
Having a good HR metrics dashboard in place can help provide insights into all of these areas and more. By tracking timely KPIs, organizations can gain an accurate view of their recruitment process and make better decisions around resource allocation and employee engagement.
When people refer to the types of HR metrics and analytics, they're really referring to any measure of performance related to the strategy, engagement, hiring, retention, and promotion of employees. These metrics can range from simple measures of time-to-fill for positions to more complex calculations such as HR benchmarking metrics or employee engagement scores. It's important to understand what each type of metric is and which ones are most useful in order to make informed decisions about your talent management efforts.
The most important HR metrics that matter are those related to the cost of recruiting and hiring, employee engagement, and retention rates. Cost per hire is an important metric for understanding how much money it takes to recruit and hire a new employee. It should include the costs associated with advertising, interviewing, background checks, onboarding, training, etc. In addition to cost-per-hire, companies should also track time-to-fill metrics to measure the efficiency of their recruitment process - with these types of HR metrics companies can better plan their hiring budgets and timelines.
Employee engagement and retention rates are also important HR metrics that can provide insightful information about the success of your talent management strategies. Employee engagement is a measure of how much employees feel committed to and satisfied with their work environment.
As you can see, the importance of HR metrics cannot be overstated. By understanding which metrics are most useful and how to measure them, organizations can better inform their decisions on recruitment and retention processes, as well as employee engagement. With the right data in hand, companies can ensure that they are making strategic investments in their talent management efforts and staying ahead of the competition in the hiring market.
To see how Pillar can help you lower costs-to-hire, and time-to-hire, and decrease employee turnover by up to 50%, book your demo to chat with someone from our team today!