Analytics has become a power player in companies across the U.S.  No longer can a company get through the day without pulling up some type of statistic or information that’s based on current or previous analytics. When evaluating a department or a company you’re hiring for, analytics is there to prove the benefits.

Senior leaders are looking for information that proves the overall effectiveness of human resources departments. One of the hardest things to justify is a department that doesn’t necessarily make companies money. For the past decade, human resources departments have been trying to prove their worth and value to leaders in their organizations. If you’re struggling to provide this information to the leadership within your company, we’ve come up with a few analytics/reports that will indicate how well your department is performing. Your information might not be as black and white as the finance department’s, but human resources is just as important.

Quality of Hire: Quality of hire is important, because it shows how well the human resources department is doing at recruiting candidates that fit into the organization. The total cost of hiring an employee, according to GetHired.com, can be anywhere from $18,000 – $20,000. Considering that cost, it’s generally understood that you want to hire right the first time. Showing your senior leaders that you’re able to hire correctly will prove that you’re saving the company thousands of dollars.

Revenue per Employee: This formula is important when evaluating the cost of employees lost due to voluntary or involuntary turnover. This is important for leaders in an organization because it shows, in general terms, the average amount of revenue that is being brought in per employee in the organization. A low number could mean that you have too much staff, which is a key issue to deal with properly.

Monthly Turnover Rate: In a very competitive job environment, it’s imperative that company leaders understand the amount of turnover that happens on a monthly basis. Having a report that shows why each employee left will give really good insight into employee moral and company growth. If high quality employees are leaving month after month, there may be an underlying issue that can be addressed by senior leaders. Having this report will help them figure out the best course of action more quickly.

Even though human resources departments don’t technically make money for a company, they save companies millions a year by hiring correctly and efficiently, and preventing employment lawsuits, among the hundreds of other things this generally understaffed department does. These three simple reports and figures will give your senior leaders a pretty good idea on how your human resources department is performing, and how it supports their organization as a whole.

Adina Miron

5 Comments

  • Avatar Patty D. says:

    People always notice good things when they vanish and if HR department stops working correctly that’s when you’ll notice how valuable and important their work is.

  • Avatar Monique says:

    Most people think of HR’s as paper-pushers. Of course HR-department doesn’t sell anything, doesn’t attract new customers and doesn’t develop strategies for promoting goods on the market. Their work isn’t visible but still significant. The question is how are they to prove it? Should they just walk around with a bell and shout how effective they are? It’s humiliating!

  • Avatar Mike Strening says:

    Well, there’s no wonder when employer wants to see whether each department of his/her company works effectively. So, I think there’s nothing wrong or humiliating. I can’t disagree that there’s a little problem with evaluating the work of HR department, but the solution to this problem was found. Today we have lots of ways e.g. Hr-audit, HR accounting, management by objectives etc.

  • Avatar Luciano says:

    Hi everybody,

    I am quite new in the business world, but what I understood so far is that besides what your role is in the company, you need to create revenues or save costs. And the reason is obvious: companies exists is to make profits. So anything that does not lead toward that goal is a waste. Now, I think that HR people should always keep it mind in order to be more clearly a source of profits or savings and to be able to communicate and sell their work in a language that their Customers can understand: numbers.

    Thank you for the articles and your comments!

    Luciano

  • Very interesting info!Perfect just what I was searching for!

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