What KPIs Does an HR Operations Analyst Use?
Human resources (HR) operations analysts constantly try to improve efficiency, productivity and morale. They accomplish this by using key performance indicators (KPIs) and statistics to objectively measure certain workplace characteristics, turning soft data into measurable metrics. What do they usually look for?
Absence Rate and Cost
How often do employees call in sick or skip work altogether? Analysts find this figure by dividing the number of absences by an employee's total number of days at work. They can use the data to create an HR report. They also look at the impact of absenteeism on the company, specifically, how much money it costs.
HR analysts factor in salaries, the amount of lost work and the cost of filling in for the employee in their absence. It can be a crucial metric in workplaces with strong labor unions and employee rights.
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This KPI examines workers' satisfaction with their benefits, including paid sick leave, overtime pay and retirement plans. Are employees too stressed to use their vacation time? These KPI metrics are useful for reducing turnover - the rate employees leave a workplace - because the HR department might realize they need to provide greater benefits or minimize workplace stress. HR analysts can measure this KPI by doing employee surveys.
Organizations try to avoid turnover for the most part because it can be very costly. Whether voluntary or involuntary, losing a worker usually means a business must spend extra time and money recruiting a replacement. Several KPIs measure different turnover statistics.
Turnover rate is the number of employees who quit, are fired, retire or pass away in a given period compared to the total number of workers. For example, the one-year quit rate examines how many new hires leave within a year. Another common measurement period is the three-month mark, high number of employees quitting within 90 days indicates a hiring problem or a serious flaw in the workplace.
The voluntary turnover rate measures how many employees quit or retire. This KPI also includes the unwanted turnover rate, which looks at the number of good workers leaving compared to the total number in the organization. It helps HR determine how to retain its best employees. In contrast, the involuntary turnover rate examines how many people were fired or died in workplace accidents. A high number of terminations or deaths is a sure sign a company needs to make changes.
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Employee satisfaction surveys evaluate whether people enjoy their jobs. Are they experiencing stress, burnout or disappointment at work? Do they get along with co-workers and find meaning in what they do? High satisfaction indicates people will stay in their positions, while unhappiness correlates strongly with quitting.
Internal Promotion Rate
Of all the managers, highest-paid employees and other top-level executives, how many started within the company and worked their way up? How many came from an outside source? To find out, HR operations analysts divide the number of high-level positions filled through internal promotion by the total number of these roles in the company. This metric matters because leaders must thoroughly understand what the people they oversee do. Managers promoted from within the company usually have a better idea of what is going on.
Net Promoter Score
A net promoter score (NPS) questionnaire asks people how likely they would recommend a product, service or business to someone else. For example, when an app features a popup asking, "How likely are you to recommend this app to a friend?" that is an NPS survey question. HR uses NPS to measure how likely employees would recommend working for the company. They may also use this KPI to determine whether people enjoy working for a certain manager or in a specific role. The results can lead to much-needed changes within departments or the organization.
Cost of the Workforce
This KPI can help with reducing costs or improving automation in a business. It determines how much a company is paying its workforce, then balances that against how much it's earning. Are workers paid too much or too little? Could chatbots or self-checkout lanes help cut overall expenditures? The International Federation of Robotics predicts automation-driven productivity will account for 1.4% of GDP growth every year over the next 50 years.
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Quality of Hire
Occasionally, HR recruits the wrong person for the job. The quality-of-hire KPI looks at how many new employees get a good or bad rating during their performance review compared to the total number of workers. This metric hints at how well the HR department evaluates, selects and hires effective workers. A poor score could indicate a company is hiring people due to racial or gender preferences, nepotism, or other types of favoritism rather than evaluating based on skill alone.
Productivity and Engagement
How busy are employees throughout the day, and how focused are they on the task at hand? In 2022, only 62% of employees reported feeling engaged at work. That leaves a lot of room for improvement. HR operations analysts use various strategies to measure productivity and engagement. For example, time-tracking and productivity apps are crucial to measuring remote workers' performance. They can provide statistics such as how often an employee sat idle or used the keyboard.
This KPI becomes more difficult to objectively measure in an office environment, but HR analysts can still estimate it by examining an employee's overall output. How many articles did they produce in a given day? How many sales do they close? Employee engagement surveys analyze how much attention people give to their work and whether they're putting in their full effort. High engagement rates usually correlate with strong morale, low turnover and better customer service.
Unsung Heroes of the Workplace
HR operations analysts are skilled statisticians. They compile vast troves of data on everything from turnover rate to employee satisfaction, then translate it into digestible figures to help drive changes in the workplace. Thanks to them, companies can find areas that need improvement to maximize productivity and happiness.