What are the indicators of human resource management?
Over the past decade, the HR unit has evolved from a purely managerial unit to one of the organization’s strategic assets. Today’s managers know that they must have a strong and efficient team to implement the organization strategically. Well-known companies and organizations in the world strongly emphasize the importance of manpower and its maintenance. In fact, the ability of management to attract the right talents and candidates with potential is one of the key elements of success in any organization. Although the importance of determining human resource management indicators is being more understood nowadays, it is still difficult to achieve new results from these indicators. Human resource management indicators are for attracting, directing and retaining the best force and it is a tool that determines the degree of compliance of strategic goals with the goals of human resource management. According to experts, managers should consider two basic points and address both of these issues simultaneously: Traditional human resource practices, such as employee satisfaction, absenteeism rates, and relocation; and the second one is strategic measures of human capital management, such as employee performance and their culture. In the following, we have presented a number of human resource management indicators; Stay with us and keep on reading to find out more about this subject.
Indicators of human resource management and employee service compensation:
- Percentage of labor costs
Employee costs, compared to all costs of the organization, are obtained by adding up all wages and dividing them by the total costs of the organization over a period of time.
- Solvency Capital Requirement (SCR(
This index is used to evaluate the competitiveness in the field of employee compensation compared to other competitors in the market and related industries. By dividing the average salary of the company by the average salary offered by competitors, this index is obtained.
- Value Added Human Capital (HCVA(
Human Capital Value Added is used to determine the average profitability of employees in the organization and is obtained by dividing non-employee costs (apart from the income issue) by the number of full-time employees.
- The cost of each employee’s health care
This index provides a good overview of your organization’s health care plan and is obtained by dividing the total cost of health care services by the number of employees.
Human resource management indicators in the field of culture
- Employee Satisfaction
This index is a key metric in maintaining talent and manpower. Employee satisfaction can be measured by using surveys in all parts of the company.
- Employee Satisfaction Survey
This index shows the amount of effort and measures needed to maintain and develop employee satisfaction.
- Percentage of employees learning from the macro culture of the organization
This index is one of the human resource management indicators that examines and evaluates the importance and understanding of the dominant and macro culture of the organization.
- Percentage of vacations used
This percentage, which reflects the company’s attitude towards the “life” and “work” balance, is calculated by comparing the number of used leaves with unused leaves.
- Absence rate
This indicator shows the amount of productivity and useful work lost as a result of an employee’s absence, of course due to illness or sudden departure from work. The formula for calculating it is as follows: the total number of working days lost due to absence, divided by the number of working days in the organization. With this formula you can calculate the absenteeism rate.
- Number of full-time employees
This index shows the growth of the company’s workforce over time.
- Number of contractors
This indicator measures the growth of employees related to your collection and organization over time, and by evaluating the number of full-time employees, you can see the whole process of workforce change.
- Average duration of employee maintenance
This is the average length of time an employee works with your company. This index determines the level of satisfaction and retention of talents and workforce in the organization.
- Voluntary service termination rate
This rate is obtained as follows: The difference between the total number of employees who have ended working with the company within a certain period of time, and the number of employees who have resigned from their jobs. In other words, to get this rate, it is enough to reduce the number of resigned employees from the number of employees who have ended their cooperation with the organization for any type of reason.
- Voluntary service termination rate
This rate is also the result of the difference between the number of fired employees of the company and the total number of employees who have terminated their cooperation with the company within a certain period of time.
- 90-Day recruitment failure rate
This indicator shows the organization’s ability to manage the process of efficient recruitment in a certain period of time. The faster the organization manages and achieves results to attract the right and talented employees, the more management ability it has in measuring human resources.
- Voluntary service termination rate in the first year
This index shows the acceptance of new forces in the organization. The higher the percentage of this index, means that the organization, despite attracting the best and appropriate forces, has not been able to maintain and use them properly in the business.
- Average time to fill a vacancy
This indicator shows the effectiveness and ability of the organization in managing the recruitment process by considering the time to fill vacancies.
- Recruitment process satisfaction rate
This rate shows the recruitment process from the point of view of employees and staff, and in fact indicates the satisfaction of applicants and employees with the recruitment process.
- Cost per hire
This index is one of the indicators of human resource management that shows the amount of resources invested to attract new talents and forces. This index is obtained by finding the average costs in total marketing, the recruitment process, the number of applicants and some other things in each recruitment session.
- Effectiveness of Training
This indicator helps the organization to understand how much the new employees are eager and ready and then change their activities based on their abilities before and after training. For instance, they would know what hard or easy tasks should be assigned to them. It is usually obtained through a survey after the implementation of the necessary training.
- Training costs for each employee
This index is the amount of expenses that are invested for each new employee.
- Percentage of trained staff
This indicator shows the speed of preparation of new employees to the organization. That is, it helps the organization understand the level of readiness and performance of the new workforce after the necessary training and justification.
- Variation rates
This indicator shows the success of the organization in creating an open-minded and ready environment for accepting different creative ideas.
- Friction rate
With the help of this rate, the organization can measure its success rate in retaining the best forces and talents. The friction index is calculated as follows: The number of employees who have left the organization in a certain period of time is divided by the average number of employees who are working in that period.
- Average time of attracting forces
This index shows the ability and effectiveness of the company in managing the recruitment process.
- Applicants interviewed for employment
By comparing the total number of applicants interviewed for a particular job position with the total number of recruitments made over a given period of time, this index will be obtained.
- Percentage of job applicants in accordance with the criteria
This indicator measures the effectiveness of job advertisements and announcements. The more relevant the job applicants are to the job position of the organization, the greater the effectiveness of the announcement and so-called job-posting would be.
- Internal employment rate
This index reflects the effectiveness of organizational talent development.
- Percentage of recruits introduced through current employees
This rate helps managers identify and explore the added value created through the help and cooperation of internal forces to attract other forces. In fact, recruitment is done by introducing the internal staff of the organization and usually good forces and talents are introduced to the managers through the members of the organization themselves.
- Performance of new forces
Performance appraisal is one of the most important issues in human resource management. There are several ways to evaluate employee performance; One of these methods is to review reports on the performance of new employees compared to others.
- Employee productivity rates
This rate measures the effectiveness of employees over time and is obtained by determining the total revenue of the organization and dividing it by the total number of employees.
- Staff suggestions
This indicator shows the degree of participation in the development of the business process and shows how freely organizations or companies react to the data and inputs that an employee brings to the organization.
- Percentage of sub-standard labor performance
This index examines the poor performance of employees in the organization.