📈 HR Metrics and People Analytics: Essential Terms You Need to Know 📊
Understanding key HR metrics and people analytics is crucial for effective HR management and strategic decision-making. Here’s a comprehensive overview of essential terms, complete with practical examples:
1. Application Completion Rate: Indicates how many candidates complete the application process.
Example: Factors that influence the application completion rate include the complexity of the application, its length, and whether or not it is optimized for mobile.
2. Attrition Rate: Measures the rate at which employees leave the company without immediate replacement.
Example: The employee attrition rate is usually shown as a percentage. If the percentage is high, the organization is shrinking.
3. Employee Lifetime Value (ELTV): Measures the expected future value an employee brings during their tenure.
Example: Employee lifetime value is a relatively new concept, but its principles are similar to those of a well-known business metric, namely customer lifetime value.
4. Dysfunctional Turnover: Occurs when high-performing employees leave faster than weaker performers.
Example: Dysfunctional turnover is a voluntary type of turnover that negatively impacts a company’s end profit.
5. Headcount Planning: Strategizing to ensure the organization has the right number of skilled individuals.
Example: HR practitioners, together with the organization’s business leaders and managers, drive the headcount planning process.
6. Human Capital Analytics (HCA): Assessing the ROI of an organization’s people, evolving into People Analytics.
Example: There are three levels of data examination in Human Capital Analytics: descriptive, predictive, and prescriptive.
7. Human Capital ROI (HCROI): Measures the value employees contribute relative to money spent on them.
Example: Regularly calculating the organization’s human capital ROI will help HR teams gain new insights and see opportunities for improvement for their HC initiatives.
8. HR Scorecard: Tool to measure, manage, and improve HR's strategic role within a company.
Example: The biggest advantage of using an HR scorecard is that it becomes easier to align HR strategies and objectives with those of the business.
9. Interview-to-Hire Ratio: Measures the number of interviews conducted relative to the number of hires.
Example: Factors that affect the interview-to-hire ratio include the complexity of the role, labor market conditions, and the company’s reputation as an employer.
10. New Hire Turnover: Measures how many employees leave within the first year.
Example: New hire turnover is an important indicator of the effectiveness of an organization’s hiring and onboarding processes.
11. Promotion Rate: Indicates how frequently employees are promoted and within what timeframe.
Example: A high promotion rate suggests that the organization offers plenty of opportunities for growth and development.
12. Revenue per FTE (Full-Time Equivalent): Measures the revenue generated per full-time employee.
Example: Revenue per FTE converts the hours that part-time and contingent workers make into full-time equivalents.
13. Selection Ratio: Measures the number of hires relative to the total number of applicants.
Example: Factors influencing the selection ratio include job attractiveness, the application process, and the organization’s employer brand and reputation.
14. Source of Hire (SoH): Tracks the sourcing channel through which candidates learn about vacancies.
Example: Common source of hire channels include employee referrals, job boards, the company’s careers page, professional networks, and social media.
15. Workforce Analysis: Uses employee and ROI data to make informed decisions about recruitment and retention.
Example: Conducting a workforce analysis helps companies to better understand their strengths, weaknesses, and future staffing needs.
16. Yield Ratio: Measures the percentage of applicants moving through each hiring stage.
Example: Calculating the yield ratio enables organizations to pinpoint bottlenecks and identify bias in their recruitment process.
Master these HR metrics and people analytics terms to enhance your HR strategies and drive organizational success! 💼✨