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As we step into 2024, the landscape of human resources is evolving rapidly, making it imperative for businesses to stay ahead of the curve. This blog post is designed to guide professionals through the essential metrics that are shaping the future of HR and recruitment.

In an era where data-driven decision-making is not just a luxury but a necessity, understanding and leveraging key HR metrics has become crucial for organisational success. Studies have shown that organisations that effectively utilise HR metrics can see a significant increase in profitability, sometimes by as much as 56%. Furthermore, with the growing complexity of the workforce and the increasing reliance on technology, 77% of HR leaders now recognise the importance of being proficient in data analysis to make informed decisions.

At Northreach, we understand that navigating through these metrics can be daunting. That’s why we’ve distilled the most critical metrics into a comprehensive list. These metrics are not just numbers; they are insights that can drive strategic decisions, enhance employee engagement, and optimise recruitment processes. From measuring employee engagement and productivity to understanding the cost-effectiveness of hiring strategies, each metric provides a piece of the puzzle in building a resilient and dynamic workforce.

Join us as we discuss each of these 16 key metrics, exploring their significance and how they can be effectively utilised in your HR strategy. Whether you are an HR professional, a business leader, or someone keen on understanding the future of work, this guide will provide valuable insights into the metrics that are essential for success in the ever-changing world of work.

Absolutely, let’s dive into the detailed segment of the 16 key HR metrics for 2024. Each metric will be presented with its description, relevance, and formula under separate H2 headings.

Key metrics to track

 

1. Quality of hire

Description: Assesses the long-term value and performance of new hires.

Relevance: In 2024, hiring the right talent is crucial for organisational resilience and growth as businesses face rapid changes.

Formula: (Job performance + Ramp-up time + Employee engagement + Cultural fit) / Number of Indicators.

Example: Suppose a new hire’s job performance is rated 80/100, ramp-up time is 90/100, engagement score is 85/100, and cultural fit is 75/100.

(80 + 90 + 85 + 75) / 4 = 82.5

Application: This score helps in understanding the overall effectiveness of the hiring process and the value added by the new hire.

2. Employee turnover rate

Description: Measures the rate at which employees leave the organisation.

Relevance: Understanding turnover is key to addressing retention challenges and maintaining a stable workforce.

Formula: (Number of separations / Average number of employees) x 100.

Example: If a company has an average of 200 employees and 20 left last year.

(20 / 200) x 100 = 10%

Application: This rate helps identify employee retention and workplace satisfaction issues.

3. Time to fill

Description: The average time taken to fill a vacant position.

Relevance: Indicates the efficiency of the recruitment process, crucial in a competitive talent market.

Formula: Total days to fill all vacancies / Number of vacancies.

Example: If 5 vacancies took a total of 250 days to fill.

250 / 5 = 50 days

Application: Indicates the efficiency of the recruitment process, guiding improvements if needed.

4. Cost per hire

Description: The average cost involved in hiring a new employee.

Relevance: Essential for budgeting and optimising recruitment spending in an economically fluctuating environment.

Formula: (Total internal recruiting costs + External recruiting costs) / Total Number of Hires.

Example: If the total internal and external costs for hiring 10 employees are £50,000.

£50,000 / 10 = £5,000

Application: Helps in budgeting and optimising recruitment spending.

5. Training effectiveness

Description: Evaluates the impact of training on employee performance.

Relevance: Ensures that training investments align with evolving business needs and employee development.

Formula: (Post-training performance – Pre-training performance) / Pre-training performance.

Example: An employee’s performance score improves from 70 to 85 post-training.

(85 – 70) / 70 = 21.4%

Application: Assesses the ROI of training programs and their impact on employee performance.

6. Employee Net Promoter Score (eNPS)

Description: NPS is a metric used to gauge the loyalty of a firm’s customer relationships. It serves as an alternative to traditional customer satisfaction research and is correlated with revenue growth.

Relevance: In 2024, with increasing competition and the growing importance of customer experience, NPS becomes a critical tool for businesses to measure and improve customer loyalty and satisfaction. It’s a straightforward metric that can provide powerful insights into customer sentiment and predict business growth.

Formula: NPS is calculated based on responses to a single question: “On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?”

Respondents are grouped as follows:

  • Promoters (score 9-10): Loyal enthusiasts who will keep buying and refer others, fuelling growth.
  • Passives (score 7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
  • Detractors (score 0-6): Unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
  • Formula: (Number of promoters — Number of detractors) / (Number of respondents) x 100.

Example: Suppose you surveyed 100 customers. 70 customers were Promoters, 20 were Passives, and 10 were Detractors.

First, calculate the percentage of promoters and detractors:

  • Promoters: 70/100 = 70%
  • Detractors: 10/100 = 10%
  • Then, calculate the NPS: (70% – 10%) x 100 = 60.

Application: NPS is used to assess customer loyalty, predict business growth, and identify areas needing improvement. A high NPS score indicates that customers are more likely to act as brand ambassadors, while a low NPS score may signal underlying issues in customer satisfaction. It’s a valuable tool for businesses to track customer sentiment over time, benchmark performance against competitors, and guide customer experience strategies.

7. Absenteeism rate

Description: Tracks the frequency of unscheduled employee absences.

Relevance: Indicates employee well-being and operational efficiency, especially important in high-stress industries.

Formula: (Total absence days / Total working days) x 100.

Example: If there are 500 absence days in a year with 10,000 total working days.

(500 / 10,000) x 100 = 5%

Application: Helps in identifying underlying issues affecting employee attendance.

8. Employee productivity rate

Description: Measures the output or value generated by employees.

Relevance: Key to understanding workforce efficiency, particularly with the rise of remote work.

Formula: Total output / Total input (varies based on industry and role).

Example: If the total output value is £1,000,000 with 100 employees.

£1,000,000 / 100 = £10,000 per employee

Application: Measures the efficiency and effectiveness of the workforce.

9. Internal promotion rate

Description: Percentage of vacancies filled through internal promotions.

Relevance: Reflects the strength of employee development programs and career progression opportunities.

Formula: (Number of Internal Promotions / Total Number of Promotions) x 100.

Example: If out of 50 promotions, 30 were internal.

(30 / 50) x 100 = 60%

Application: Indicates the effectiveness of employee development and internal career progression opportunities.

10. Application completion rate

Description: The percentage of job applications that are completed.

Relevance: Indicates the effectiveness of the application process, important as candidate experience becomes a differentiator.

Formula: (Number of completed applications / Number of started applications) x 100.

Example: If 200 out of 250 started applications are completed.

(200 / 250) x 100 = 80%

Application: Indicates the effectiveness and user-friendliness of the job application process.

11. Offer acceptance rate

Description: The percentage of job offers accepted by candidates.

Relevance: Indicates the attractiveness of offers and effectiveness of the recruitment process.

Formula: (Number of offers accepted / Number of offers made) x 100.

Example: If 45 out of 50 job offers are accepted.

(45 / 50) x 100 = 90%

Application: Measures the attractiveness of job offers and the effectiveness of the recruitment process.

12. Employee Lifetime Value (ELTV)

Description: Estimates the total value an employee brings over their tenure.

Relevance: Helps in understanding the long-term ROI of hiring and retaining employees, vital for strategic workforce planning.

Formula: (Average productivity value per year x Average employee tenure) – (Average training and development costs + Average recruitment costs).

Example: Average yearly productivity value is £80,000, average tenure is 5 years, and average recruitment and training costs are £15,000.

(£80,000 x 5) – £15,000 = £385,000

Application: Helps in understanding the long-term value and ROI of employees.

13. Attrition rate

Description: The rate at which employees leave the organisation.

Relevance: Indicates workforce stability and effectiveness of retention strategies, crucial in maintaining organisational knowledge and culture.

Formula: (Number of employees who left / Average number of employees) x 100.

Example: If 15 employees leave out of an average of 150 employees.

(15 / 150) x 100 = 10%

Application: Indicates workforce stability and the effectiveness of retention strategies.

14. Candidate call back rate

Description: Measures the percentage of candidates who return phone calls after initial contact.

Relevance: In 2024, as recruitment becomes increasingly competitive, engaging candidates effectively is crucial. This metric helps in understanding how well your initial outreach resonates with potential candidates.

Formula: (Number of candidate return phone calls / Total number of phone calls made to candidates requesting a call back) x 100.

Example: If you made 100 calls to candidates and 40 returned your calls.

(40 / 100) x 100 = 40%

Application: This metric helps in assessing the effectiveness of initial candidate engagement and can guide improvements in communication strategies.

15. Employee referrals

Description: Tracks the number of job candidates referred by current employees.

Relevance: Employee referrals can be a highly effective and cost-efficient sourcing strategy. This metric is important for gauging the engagement of current employees in the recruitment process and the effectiveness of the referral program.

Formula: Track the Number of Referrals during a certain time-period or per open job requisition.

Example: During a quarter, employees refer 30 candidates for various job openings.

Application: This metric is crucial for evaluating the effectiveness of employee referral programs, which can be a valuable source of qualified candidates.

16. Sourcing channel effectiveness

Description: Evaluates the effectiveness of different recruitment channels in providing quality and quantity of candidates.

Relevance: Identifying which recruitment channels yield the best candidates (in terms of both quality and quantity) is crucial for optimising recruitment efforts and resource allocation.

Formula: Count the Number of Candidates from Each Channel during a Given Timeframe and Compare Which Channel is Producing the Most (Quality/Quantity) Candidates.

Example: Over six months, LinkedIn provides 100 candidates, job fairs provide 50, and employee referrals bring in 70.

Application: This metric helps in identifying the most productive sourcing channels, allowing for better allocation of recruitment resources and strategies.

Takeaway: Embracing the future of HR with data-driven insights

As we conclude our exploration of the top 16 HR metrics for 2024, it’s clear that the future of human resources is deeply intertwined with data-driven decision-making. In an era marked by rapid technological advancements and evolving workforce dynamics, these metrics are not just numbers on a spreadsheet; they are the compass that guides HR professionals through the complexities of talent management.

The insights derived from these metrics empower organisations to make informed decisions, foster a positive and productive work environment, and stay ahead in a competitive landscape. By effectively utilising these metrics, businesses can not only enhance their recruitment strategies but also create a culture of continuous improvement and employee satisfaction.

As we step forward into 2024 and beyond, the role of HR metrics will continue to evolve, becoming more integral to strategic planning and organisational success. The key lies in not just collecting data but in interpreting it to make meaningful changes that resonate with both employees and business objectives.

In embracing these metrics, we are not just tracking numbers; we are shaping the future of work. We are building workplaces that are not only efficient and productive but also inclusive, engaging, and adaptable to the changing tides of the global economy.

If you need guidance in understanding these metrics or how to effectively apply them in your organisation, please get in touch with us at Northreach, and we’ll be happy to help you navigate these crucial aspects of HR management.