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Developing and optimizing a flexible, agile workforce is a complex and ongoing process that cannot be performed in a vacuum. To make workforce decisions that support corporate goals, HR leaders and managers need to understand how the organization is performing by defining and tracking the right set of metrics.
Because collecting data and calculating HR metrics is no small undertaking, it’s important to focus on the ones that really matter; tracking too many metrics can be overwhelming and counterproductive. Determining which metrics to measure and report will depend on an organization’s overall strategy and goals, so collaboration across many departments is strongly recommended. This approach helps HR focus on those metrics that support operational managers and most directly impact progress toward business goals.
Some of the most powerful and commonly used HR metrics include:
Employee turnover: Tracking turnover not only helps an organization budget more accurately for replacement and training costs, but it alerts HR and operations to potential problems, such as non-competitive salaries or low employee engagement, that require immediate attention.
Overtime costs: Reliance on overtime can quickly send labor costs spiraling out of control. Tracking overtime can help managers identify patterns, understand relationships to demand, and limit use only to those circumstances where it makes good business sense.
Employee mix: Tracking the number of part-time, full-time, temporary, and contract workers — and how that correlates to supply and demand — helps organizations maintain an optimal employee mix that balances service and cost.
Unplanned absences: Tracking employee time off provides insight to help control the costs of unplanned absenteeism including overtime pay and temporary replacement labor. The more accurately time off is monitored and managed, the better organizations can plan and budget for unplanned absences.
Cross-training: Because cross-training is fundamental for building functional flexibility into the workforce, it’s important to track employee skills and certifications. These metrics make it easier for managers to fill open shifts or replace absent workers with qualified employees to meet service level agreements and minimize compliance risk.
Workforce management technology captures the pertinent data, including labor hours and costs, absences, leave, schedules, skills, certifications, and more, needed to calculate and track employee metrics and stores it in a single, unified database. Access to centralized employee data provides a wealth of information that can be extracted to evaluate performance and keep the workforce aligned to meet — or exceed — performance standards and achieve corporate goals.