Human Resource Metrics

Posted in Human Resources Terms, Total Reads: 9277

Definition: Human Resource Metrics

HR metrics provide the method to measure the performance of the various functions under the HR department. The metrics provide a method to put a target number against the intangible goals of HR. Hence, this helps in setting a target for HR department, measuring their performance and making them accountable.

Some examples of metrics are:

To measure efficiency of HR functions:

Cost per hire = (Advertising + Agency Fees + Recruiter's Salary/Benefits + Relocation + Other Expenses) / Operating Expenses

Yield ratio = Number of people recruited/ Number of people applied

Total Compensation Revenue Ratio = Compensation & Benefit Cost / Revenue

To measure effectiveness of HR functions:

Training Investment Factor = Total Training Cost / Headcount

Turnover Costs = Termination Costs + Hiring Costs + Training Costs + Other Costs

Voluntary turnover = Voluntary Separations / Headcount

Developing company’s core competence

Revenue factor = Revenue / Total Full Time Employees

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