People are the backbone of every company. Gone are the days of leaving employees to their own devices and relying on managers to value human capital. Payroll is often the largest expense for organizations, costing upwards of 70% of total business expenditures. However, a recent survey showed that HR professionals spend only 15% of their time managing labor costs.
The best way to maximize the impact of your investment in human capital is to track data that can inform decisions. Every organization should develop their own key performance indicators, but consider starting with these 11 top metrics:
There’s nothing worse than posting a job description and being inundated with stacks of inapplicable resumes. Time to hire measures how long it takes you to go from first contact with a candidate to hiring them. Track how long it takes for a candidate to go through each phase of your hiring process to determine where you can increase efficiency. The average company takes up to six months to make a hire, but you can do way better than that. Many companies find that the preliminary talent identification phase takes the most time.
How much unconscious bias do you have in your recruiting efforts? Probably more than you think. Research industry data regarding diversity make-up in employee pools and compare those numbers to yours. You can improve your diversity rates by instituting demographic blind screening, or other proactive tools.
The initial investment of sourcing and vetting employees is important, but can become costly. It costs upwards of $5,000 for the average American company to make a single hire. Track the return on investment for each tool in your hiring process and consider swapping out ones that underperform.
After spending so much time and money finding the right people to work in your organization, why not make it clear to them that there is room for them to grow with your company? 75% of Generation Z workers think they deserve a promotion within a year of starting a new job. Internal hiring costs less than half of external hiring, so be sure to track how often you are finding talent within your company and determine internally what goal you’d like to target to improve that number.
Top talent needs to want to work at your company. First, determine at what rate you convert candidates at each point in your hiring process by dividing the number of candidates left in the pool by the number of hires. For example, if you make four job offers for each acceptance, your job offer conversion rate would be 25%. Increasing these rates creates efficiencies in your process, saving time and money. Consider surveying candidates to determine what friction exists in each step of your hiring process.