UNIT V

HR Metrics

HR Metrics are used to gauge the effectiveness of various HR responsibilities and initia-
tives such as hiring, employee retention, training, and labor costs. Human resources de-
partments can use these metrics to improve their efficiency and demonstrate the value of
their activities to upper management.

Common Types of Human Resources Metrics:

Time to hire.
The average length of time that it takes for you to hire a new employee, from the time of
the job posting to their acceptance of an employment offer. You can calculate this by
adding up the time for each individual hire and dividing it by the number of new hires in a
given period.

Cost per hire.

How much does it cost for you to hire a new employee? This includes things like the re-
cruiter's time, the possible cost of listing a job on a third-party site, time spent interviewing,
etc.

Employee turnover.
Every business wants to have low employee turnover rates. If you are frequently losing
employees and having to hire new ones, there might be an issue with your hiring or
staffing process. Pay close attention to this number.

Revenue per employee.

It is very easy to determine your revenue per employee. Just divide that company's total
revenue for the year by the number of employees that you have. You can also use this
metric for individual departments.

Billable hours per employee.

This metric may not be applicable to every business, but it is usually relevant for busi-
nesses that offer a professional service like marketing agencies or legal firms. Not every
employee will log hours that are directly billable to a client, so employees should track their
time to allow you to gauge this on an individual basis. Essentially, the more billable hours
per employee you have, the more revenue the company is making.

Absenteeism.
Absenteeism is the amount of time that your employees are absent from work for any rea-
son (vacation, sick days, other). Metrics for absenteeism are given as a percentage of the
total amount of available working days.

Cost of HR per employee.

Hiring, training and managing your workforce costs money. If you look at your HR expendi-
tures for the previous month or year and then factor in the number of employees on your
payroll, you can determine how much each employee costs on average for HR. This will
allow you to make adjustments and lower costs.

Employee engagement.
Employee engagement is one of the most difficult metrics to obtain because it cannot be
found using your financial records. You can issue company-wide surveys to your employ-
ees and ask questions rated one to five about their experience working in the company.
The results can be averaged to rate your level of employee engagement.

Cost of training per employee.

In most situations, the success of a new employee has to do with the quality of their train-
ing. Still, that training has a cost. You need to pay people to spend time training new em-
ployees, you may need to supply them with equipment and materials, and they may need
some time before they are ready to work without assistance. Look at your training expendi-
tures and the number of employees you've trained to find out how much each new trainee
is costing you.

Diversity/EEOC numbers.
The diversity of your workforce is more than an arbitrary number - it could be the key to
your success. Diversity includes race, ethnicity, job type and salary. If your business is re-
quired to file an EEO-1 report with the Equal Employment Opportunities Commission, then
you should already have access to these metrics.

What are recruiting metrics?

Recruiting metrics are measurements used to track hiring success and optimize the
process of hiring candidates for an organization. When used correctly, these metrics help
evaluate the recruiting process and whether the company is hiring the right people. Addi-
tionally, they provide you with data that will allow you to make improvements to your re-
cruitment process.

Making the right recruiting decisions is important. This image shows the employee’s life-
time value as the sum of all the HR decisions made about that employee.
Using this image, we can see that hiring someone who is more suited for the job has the
potential to create an enormous return on investment (ROI).

This is why recruiting the right people is so important. Whether you’re starting off by mea-
suring recruitment data or fine-tuning your recruiting metrics, this list will give you a great
overview.

1. Time to fill
This refers to the number of calendar days it takes to find and hire a new candidate, often
measured by the number of days between approving a job requisition and the candidate
accepting your offer. Several factors can influence time to fill, such as supply and demand
ratios for specific jobs as well as the speed at which the recruitment department operates.
It’s a great metric for business planning and offers a realistic view for the manager to as-
sess the time it will take to attract and hire a replacement for a departing employee.

2. Time to hire
Time to hire represents the number of days between the moment a candidate applies or is
approached and the moment the candidate accepts the job. In other words, it measures
the time it takes for someone to move through the hiring process once they’ve applied.
Time to hire thus provides a solid indication of how the recruitment team is performing.
This metric is also called ‘Time to Accept’.
A shorter time to hire often enables you to hire better candidates, preventing the best can-
didates from being snatched up by a company that does have a short time to hire. It also
impacts your candidate experience as nobody likes a recruiting process that takes a long
time. You’ll be able to see where the bottlenecks are in your hiring process and you can
work to remove them.

3. Source of hire
Tracking the sources which attract new hires to your organization is one of the most popu-
lar recruiting metrics. This metric also helps to keep track of the effectiveness of different
recruiting channels. A few examples are job boards, the company’s career page, social
media, and sourcing agencies. 
Having a clear understanding of which channel works and which doesn’t, you’ll be able to
double down on the channels that are bringing you the most ROI and decrease spending
on those that aren’t. For example, if you see that most of your successful hires are not
coming from LinkedIn but your internal job board, then that’s the channel that you want to
be focusing on.

4. First-year attrition
First-year attrition or first-year / new hire turnover is a key recruiting metric and also indi-
cates hiring success. Candidates who leave in their first year of work fail to become fully
productive and usually cost a lot of money. First-year attrition can be managed and un-
managed.
Managed attrition means that the contract is terminated by the employer. Unmanaged attri-
tion means that they leave on their own accord (this is also referred to as voluntary
turnover). The former is often an indicator of bad first-year performance or bad fit with the
team.
The second is often an indicator of unrealistic expectations which cause the candidate to
quit. This could be due to a mismatch between the job description and the actual job, or
the job and/or company has been oversold by the recruiter.
This metric can also be turned around as ‘candidate retention rate’.

5. Quality of hire
Quality of hire, often measured by someone’s performance rating, gives an indicator of
first-year performance of a candidate. Candidates who receive high-performance ratings
are indicative of hiring success while the opposite holds true for candidates with low-per-
formance ratings.

Low first-year performance ratings are indicative of bad hires. A single bad hire can cost a
company tens of thousands of dollars in both direct and indirect costs. To read more about
how to assess these costs, check out our article on HR costing.

6. Hiring Manager satisfaction

In line with quality of hire, hiring manager satisfaction is another recruiting metric that is in-
dicative of a successful recruiting process. When the hiring manager is satisfied with the
new employees in their team, the candidate is likely to perform well and fit well in the team.
In other words, the candidate is more likely to be a successful hire.

7. Candidate job satisfaction

Candidate job satisfaction is an excellent way to track whether the expectations set during
the recruiting procedure match reality. A low candidate job satisfaction highlights misman-
agement of expectations or incomplete job descriptions.

8. Applicants per opening

Applicants per job opening or applicants per hire gauges the job’s popularity. A large num-
ber of applicants could indicate a high demand for jobs in that particular area or a job de-
scription that’s too broad.
The number of applicants per opening is not necessarily an indicator of the number of
qualified candidates. By narrowing the job description and including a number of ‘hard’ cri-
teria, the number of applicants can be reduced without reducing the number of suitable
candidates. You can also focus more on sourcing from channels that have brought quali-
fied candidates in the past.

9. Selection ratio
The selection ratio refers to the number of hired candidates compared to the total number
of candidates. This ratio is also called the Submittals to Hire Ratio.
The selection ratio is very similar to the number of applicants per opening. When there’s a
high number of candidates, the ratio approaches 0.

10. Cost per hire

The cost per hire recruitment metric is the total cost invested in hiring divided by the num-
ber of hires.

Cost per hire consists of multiple cost structures which can be divided by internal and ex-
ternal cost. Internal costs include compliance cost, administrative costs, training & devel-

opment, and hiring manager costs. External costs would be background checks, sourcing
expenses, travel expenses, or marketing costs.  

11. Time to productivity

Time to productivity, or time to Optimum Productivity Level, measures how long it takes to
get people up to speed and productive. It is the time between the first day of hiring and the
point where the employee fully contributes to the organization.

Excel Add-ins / Functions to help create Dashboards

Named Ranges in Excel

If someone has to call me or refer to me, they will use my name (instead of saying a male
is staying in so and so place with so and so height and weight).
Right?
Similarly, in Excel, you can give a name to a cell or a range of cells.
Now, instead of using the cell reference (such as A1 or A1:A10), you can simply use the
name that you assigned to it.
For example, suppose you have a data set as shown below:
In this data set, if you have to refer to the range that has the Date, you will have to use
A2:A11 in formulas. Similarly, for Sales Rep and Sales, you will have to use B2:B11 and
C2:C11.
While it’s alright when you only have a couple of data points, but in case you huge com-
plex data sets, using cell refer-
ences to refer to data could be
time-consum- ing.
Excel Named Ranges makes
it easy to refer to data sets in
Excel.
You can cre- ate a named
range in Excel for each data
category, and then use that
name instead of the cell refer-
ences. For ex- ample, dates
can be named ‘Date’, Sales
Rep data can be named
‘SalesRep’ and sales data
can be named ‘Sales’.
Here are the benefits of using named ranges in Excel.
Use Names instead of Cell References
When you create Named Ranges in Excel, you can use these names instead of the cell
references.
For example, you can use =SUM(SALES) instead of =SUM(C2:C11) for the above data
set.

The Developer Tab

The Developer tab gives you quick access to some of the more advanced features and
functions available in Excel. By default, the Developer tab is hidden, but unhiding it is quick
and easy, and I’ve outlined the steps below.
The great news is that you only have to follow these steps once. Then, every subse-
quent time you open Excel, the Developer tab will be displayed for you.
How to Enable the Developer Tab
The steps to add the Developer tab are super simple.
1. First, we want to right-click on any of the existing tabs on our ribbon.
2. This opens a menu of options, and we want to select Customize the Ribbon.
3. Then, select the Developer checkbox and click OK.

4. The Developer tab is now visible.

What's in the Developer Tab?

After you've turned on the Developer tab, some of the options you’ll find there include:
• Visual Basic – This launches the VB editor. (You can also do this by using the key-
board shortcut Alt+F11.)
• Macros – We can get a list of all of the macros available to work with. (The corre-
sponding keyboard shortcut for this is Alt+F8.) We also have the ability to record
new macros from the Developer tab.
• Add-ins – We can insert and manage our Excel and COM add-ins.
• Controls – We can also insert controls into the worksheet, modify control proper-
ties, edit the VB code for a control, and turn the Design Mode on and off.
• XML – Options here include opening the XML Source task pane to manage XML
maps, importing an XML data file, or managing any expansion packs that might be
attached to a sheet we are working with.

Important excel formulas to create Dashboards

VLOOKUP Function
The VLOOKUP function is a premade function in Excel, which allows searches across col-
umns.
It is typed =VLOOKUP and has the following parts:
=VLOOKUP(lookup_value, table_array, col_index_num, [range_lookup])

Lookup_value: Select the cell where search values will be entered.

Table_array: The table range, including all cells in the table.
Col_index_num: The data which is being looked up. The input is the number of the col-
umn, counted from the left.
Range_lookup: TRUE if numbers (1) or FALSE if text (0).

SUMIF Function
The SUMIF function is a premade function in Excel, which calculates the sum of values in
a range based on a true or false condition.
It is typed =SUMIF:
=SUMIF(range, criteria, [sum_range])

The condition is referred to as criteria, which can check things like:

• If a number is greater than another number >
• If a number is smaller than another number <
• If a number or text is equal to something =
The [sum_range] is the range where the function calculates the sum.

AVERAGEIF Function
The AVERAGEIF function is a premade function in Excel, which calculates the average of
a range based on a true or false condition.
It is typed =AVERAGEIF and has three parts:
=AVERAGEIF(range, criteria, [average_range])
The condition is referred to as criteria, which can check things like:
• If a number is greater than another number >
• If a number is smaller than another number <
• If a number or text is equal to something =
The [average_range] is the range where the function calculates the average.