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Your human resources initiatives directly affect your employees. They may even mean the difference between happy and unhappy staff.
To help you understand what's working, and whether or not it's cost-effective, you want to use human resources (HR) metrics.
This way you can measure which of your human resource activities are contributing to your overall startup growth and performance. These may include such things as:
In this article we look at five HR metrics startups should be tracking.
#1: Your employee net promoter score
You may know about the Net Promoter Score (NPS) for customers. It's the measure of customer satisfaction for your business and the knowledge that customers will promote your business to others.
Well, you can also use this score with your employees. By using this type of a survey, you'll have a good idea of your overall employee engagement. Is your staff happy? Are they likely to recommend you to others?
You want to know if they'd recommend your workplace to potential new hires.
Consider using the NPS survey to find this out. It puts you in a good position to know how well your doing with employee morale as well as whether your current employees will say you have a great workplace.
#2: The cost of employee hiring
Do you know the overall cost of your hiring efforts? This includes recruiting efforts, job advertisements, paying staff to cull through resumes, interviewing, hiring, onboarding, training, and the time it takes new team members to get on board and start delivering.
You need to know what it costs your startup to hire each new employee. This way you can make adjustments as necessary.
#3: Your compensation revenue ratio
You've decided on a healthy salary for your startup team members. You do this because you value your employees and want to pay them appropriately.
But, do you know your compensation to revenue ratio? This compares the dollars you pay your staff with the amount of money your startup is bringing in.
Bottom line – this number tells you what you can offer your staff in the way of overall compensation packages.
#4: Your turnover rate
It's quite helpful to know your turnover rate. This is the addition of your voluntary and involuntary terminations divided by 100.
This helps you see the rate of overall employee turnover at your startup. You glean a lot from this number. For example, you can tell how often you hire wrong. And, you can tell if your employee retention rates are working.
This metric is a good indicator of your company culture, your finances, and the health of your startup.
#5: New hire fail rate
Do you know how many new hires voluntarily leave or are fired in the first 90 days of employment? This is another important HR metric.
For example, if 20% of your new hires quit in the first month, you might deduce that your hiring process isn't working. You are mismatching candidates and simply not finding the right people.
If your new hire fail rate seems too high, you want to look at your hiring and recruiting process, onboarding, and overall employee culture.
By monitoring your employee HR metrics as well as your HR team performance with your staff, you can learn more about improving your startup.
When you improve what you're doing with your employees, it naturally improves what they're doing with your customers. Happy employees equal happy customers.
The bottom line is you want to know if your human resources department is really making a difference in your business and helping you improve employee relations.
You can do this with HR metrics. Your ultimate goal is improving employee performance, and this is most often done by cultivating a great company culture led by your human resources staff.
Are you a new startup ready to succeed? Are you looking to get your new business off the ground and watch it rise to success? We are here for you. We can help answer your questions and guide you through the process. Outsource your HR duties, finances, payroll and more to us. Contact Escalon today to get started.
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