Turnover Rate
One key HR metric used to evaluate the overall performance of a company staffing plan is turnover rate. The turnover rate measures the number of employees who leave the company within a set period, whether voluntarily or involuntarily, compared to the average number of total employees during that time (Jayanthi, 2020). The significance of this metric lies in its ability to provide insights into the effectiveness of the company’s recruitment and retention strategies.
A high turnover rate may indicate employee dissatisfaction or issues with the company’s culture, compensation, or work environment. The equation for turnover rate is (Number of separations / Average number of employees) x 100. For example, if a company has an average of 200 employees and 20 of them leave during a particular year, the turnover rate would be (20/200) x 100 = 10%.
Cost Per Hire
Another critical HR metric is the cost per hire. This metric calculates the total cost involved in hiring new employees, including advertising expenses, recruiter fees, time spent by HR staff on the hiring process, and any other related costs (Ontrup et al., 2022). This metric is important because it helps the company understand the financial implications of its hiring processes and strategies.
A high cost per hire may signal inefficiencies in the recruitment process, while a low cost per hire may indicate that the company is not investing enough in attracting and hiring top talent (Jayanthi, 2020). The equation for cost per hire is Total recruitment costs / Total number of hires. For instance, if a company spends $20,000 on recruitment-related activities and hires 10 employees during a particular period, the cost per hire would be $20,000 / 10 = $2,000.
Summary
In summary, these two HR metrics play a crucial role in evaluating the overall performance of a company’s staffing plan. They provide valuable insights into the effectiveness of hiring and retention strategies and the financial implications of the recruitment process.
References
Jayanthi, R. (2020). A study on effectiveness of HR metrics. International Journal of Science and Research (IJSR), 9(2), 1630-1634. Web.
Ontrup, G., Schempp, P.S., & Kluge, A. (2022). Choosing the right (HR) metrics: digital data for capturing team proactivity and determinants of content validity. Journal of Organizational Effectiveness: People and Performance, 9(2), 212-232. Web.