Key Topics Covered in HR Analytics Online Training
Analytical skills are becoming a crucial job requirement for HR as organizations strive to become more data-driven. Unfortunately, there is a shortage of analytical talent to meet this need. Less than 20% of companies identify as having a strong HR analytics function in their business, and over 75% of HR professionals reported difficulty recruiting for essential data analysis positions. To remain competitive, organizations need to rapidly upskill their HR talent. In this blog, we will cover some of the key topics that help learners sharpen their HR analytics skills and knowledge.
The Importance of HR Analytics
HR analytics came to be in the hopes that businesses could improve internal processes that relate to functions such as payroll, benefits, hiring, employee onboarding, employee performance and overall employee morale. It is the best way to use data in order to forge an understanding of how well a business is performing.
Without proper analytics, there is a high percentage chance that the business could unknowingly be losing money because of processes that just aren’t resonating or working well with its employees. Measuring data on employee processes has provided better insight and overall management to people teams everywhere.
Without proper HR analytics, executives wouldn’t be able to make proper business decisions that relate to hiring, firing or promoting employees. If people don’t feel like their job is valued or that they are performing at a high level and that the company sees that, then it can become difficult to retain high-performing employees. Without proper data oversight, it also becomes more difficult to shed the company of low-performers who aren’t pulling their weight. The right data provides legal protection against improper employee-related decisions as they are made from more than just opinions and feelings.
Key HR Analytics Metrics [With Examples]
There are a number of HR analytics that a business can measure, but the right ones for you will depend on what you’re wanting to learn and accomplish. The key HR analytics are ones that are typically measured by most organized businesses looking to keep track of their people data. Here is an overview of those key metrics that make a good starting point for most businesses to launch an HR analytics program.
1. Revenue per Employee
Revenue per employee measures how much money the business is bringing in for every employee it has on staff and is paying expenses, such as salary and benefits, for. It is calculated by dividing a company’s revenue by the total number of employees in the company. Businesses love to track this because it provides a way to see how efficient businesses are at generating revenue for each new hire.
Example: If a business has 100 employees and brings in $10 million in revenue, its revenue per employee would be $100,000.
2. Time To Fill
The time to fill metric measures how long it takes to fill an open position at the company. It is calculated by counting the number of days from posting the job to someone accepting an offer. This gives good insight into how efficient the hiring team is at finding good candidates and moving them through the hiring process.
Example: If a company posts a job on March 1 and completes its interviewing process, makes an offer, and gets that offer accepted on April 20, then the time to hire would be 51 days.
3. Voluntary and Involuntary Turnover Rates
These rates measure the percentage of employees who end up leaving the company. The voluntary rate calculates the percentage of employees who decided to leave the company while the involuntary rate calculates the percentage of employees who end up getting fired.
While the voluntary rate measures how well the company is at retaining employees, the involuntary rate measures how well it is at hiring the right people and managing them efficiently. Both are calculated by dividing the number of employees who fall into each category by the total number of employees in the organization.
Example: If 10 employees were fired in the last year, out of the 100 total employees the company had, then the involuntary turnover rate would be 10% of employees.
4. Offer Acceptance Rate
The offer acceptance rate is another hiring metric that measures how well the hiring team is at convincing the people they want to take the job. If a company is making offers to people who are declining those offers at a high rate, then the hiring process likely needs to be adjusted to move candidates through the hiring pipeline who are more interested in joining the company. It is calculated by dividing the number of accepted formal job offers by the total number of job offers made.
Example: If the hiring team has received 10 formal job offer acceptances this year, out of 20 given out, then the offer acceptance rate would be 50%.
5. Retention Rate
In contrast to the turnover rate above, it can be important to see how well the business does at keeping employees working for the business. This can be measured company-wide or on a per-manager level. To calculate the retention rate, you can divide the total number of employees who decided to stay employed over a given time period by the total number of employees over that same time period.
Example: If a business had 100 employees in the last year and 85 decided to remain employed, the retention rate would be 85%.
6. Absence Rate
The absence rate is the total number of days an employee is absent from work, not including approved time off such as vacation, over a specific period of time. This is also referred to as absenteeism and is important to measure in positions where individuals call out of work at a high rate, such as retail businesses. It is calculated by dividing the number of days worked by the total number of days that the employee could have worked over a specific period of time.
Example: When measuring the absence rate for June, let’s say there are 20 possible work days. Our worker, John, worked 14 of those days and was on vacation for another three days. This means he worked 14 out of a possible 17 days. That means he worked about 82% of the time and it gives him an absence rate of about 18%.
Conclusion
HR analytics provide insight into the business in a way that no other data does. It is an insight into how your employees perform and react to the business itself. Without proper people analytics tools, you wouldn’t be able to understand how the hiring process is going or how you can improve overall team performance and morale.
To gain more insights, join the HR Analytics Online Training by MindCypress. It equips you with latest knowledge and trends to keep you ahead.