5 Key HR Metrics Every Small Business Owner Should Be Tracking
As small business owners, we often wear multiple hats, juggling between sales, operations, and perhaps the most crucial — human resources! Understanding and tracking HR metrics can provide invaluable insights into your workforce, enabling you to make informed decisions that can drive business success.
Here are 5 essential HR metrics that small business owners like you should keep an eye on:
Turnover Rate: This crucial metric tracks the number of employees who are leaving your organization. A high turnover rate can indicate issues with company culture, compensation, or job satisfaction.
To calculate turnover, divide the number of employees who have left by the average number of employees, and then multiply by 100. It’s usually easiest to calculate this metric on a monthly basis.
Pro tip: Keep track of both voluntary (the employee left on their own) and involuntary (you fired or laid off the employee).Time to Hire: This metric measures the efficiency of your hiring process, from posting a job opening to signing a new employee. Too long? You may have an inefficient hiring process.
To calculate time to hire, count the number of days from when you posted the role until your new employee’s start date.
Pro tip: Track each step of the hiring process to determine where you need to tighten your process: resume review, interview process, job offer made, job offer accepted, background checks, applicant start date.Employee Satisfaction: Employee satisfaction and engagement levels are pivotal for productivity and company culture. Surveys and feedback forms can help gauge the morale and engagement of your team, providing insights into areas that may require improvement.
To create an employee survey, use online survey software. We use and love Typeform and Airtable.
Pro tip: Get a done-for-you template of our favorite employee survey questions with HR Navigator.Cost Per Hire: Getting a clear picture of the expenses related to bringing on a new team member, such as advertising costs, recruitment agency fees, and the time your team invests, can assist in financially streamlining your hiring process.
To calculate, add all your costs for recruiting and hiring, divided by your total number of hires.Diversity Metrics: Track the composition of your team in terms of gender, ethnicity, age, and other diversity factors to ensure inclusivity in your workplace.
Pro tip: Keep track of Diversity Metrics for leadership levels within your organization to ensure that you have a diverse team at every level.
By monitoring these metrics, small business owners can gain valuable insights into their human resources' health and effectiveness. Implementing changes based on these insights can lead to improved employee satisfaction, better performance, and ultimately, business success.
BONUS: Get your free spreadsheet template for tracking these metrics.
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