HR analytics and HR metrics: meaning and differences
HR analytics and HR metrics are inextricably linked. Both terms deal with data, but from a slightly different perspective. HR metrics (also called HR key figures) are about measuring relevant historical data. Think, for example, of absenteeism. How many employees reported sick in a year? And how long were they absent on average? Once you have collected the desired data, it's time to interpret it and identify connections. This second step in the process is called HR analytics. Thus a high absenteeism rate can be related to a flu epidemic, but also to excessive workload or a poor working atmosphere.
Why is HR analytics so important?
Let's continue for a moment with the mentioned example. Absenteeism costs an enormous amount of money. How much, you find out by measuring it. By freeing up part of your budget for, for example, burnout prevention, sustainable employability in employer branding not only do you take good care of your employees, you also save the organization a lot of time, costs and misery.
This is just one example of what you can do with HR analytics, in combination with the right HR metrics. By turning your gut feeling into concrete figures you create insight into the complete employee journey . It gives you a much better picture of how your company functions and the people who have to keep it running.
The six most important HR metrics
When you want to get started with HR analytics, it's important to carefully consider which metrics you want to measure. You obviously only want to collect data that is relevant and helps you make informed decisions. Measure, especially in the beginning, not too much. An abundance of numbers usually does not lead to the desired insights. To help you make your choice, you'll find below six of the most important HR metrics:
Absenteeism figures
We already mentioned absenteeism in the example above. By measuring what percentage of employees are sick in a given period, you gain insight into the condition of your workforce. Does the absenteeism rate rise over a longer period? Then it is important to find out what is causing this, so that a solution can be worked on.
Staff turnover
Another important HR metric is employee turnover. How many people leave in a year? If that number is high, it may, for example, be due to a lack of opportunities for advancement.
Recruitment costs
Or: how much does it cost to hire someone? How much time do recruiters spend on recruitment? What are the costs of posting vacancies? Based on this you can further optimize your recruitment process.
Promotion time
How long does it typically take for employees to be promoted? Does the organization offer sufficient opportunities for advancement, or does turnover occur due to a lack of opportunities?
Overtime
How many hours do employees work overtime in a month or a year? If there are a lot, that is a signal that there is a need for additional employees or better planning.
Employee satisfaction
Satisfied employees create a good atmosphere in your organization. They are also more productive, less often ill, and are unlikely to quickly look for a job with a competitor. Employee satisfaction is therefore a very important metric to include in your HR analytics.
