'Tis the season for annual planning for many companies. The time of year when everyone tries to justify their existence and make a case for their piece of the pie for next year. The most important thing for any department in a company is what they are contributing to the organization’s bottom line. If you can’t show management what you’re contributing – and whether that contribution is going up or down – they’ll have a hard time committing resources, or even keeping you around.
In order to show management what they want to see, you need to be tracking the right metrics. Metrics that show your contributions AND allow you to see how changes in your activity impact your results. There are dozens, more like hundreds, of things you can and should track, but keeping these four on your list will provide you with the numbers to approach the c-suite with what they want to know.
Cost Per Hire: This will give you an idea of what it costs to bring a new hire into your organization from recruitment to day one. Cost per hire can be high for a number of reasons such as paid recruitment sources or lengthy interview processes. It can be reduced through using free recruiting channels such as social media or by recruiting through employee referrals. In addition, using software to streamline and simplify the process can take some of the time and labor costs out of hiring.
Cost of Recruitment ÷ Compensation + Benefits
Source of Candidates: Through knowing which sources are delivering candidates, you will be able to plan your recruitment efforts in a targeted and thoughtful manner. By focusing on the source of candidates that deliver the greatest return you can reduce your time to hire along with your cost per hire. And when looking at source, look for quality and quantity. The channel that’s bringing you the most candidates may not be the one that brings you the best. This kind of analysis can help you determine if it makes more sense to spend money to improve screening from the volume channels, or increase volume from the quality channels.
Hiring Manager’s Batting Average: Fistful of Talent recommends that using this metric will make your hiring process more strategic. Through understanding which manager’s are retaining employees over time, you can learn from the most effective while developing your least effective.
Hires by manager over a period of time still with company ÷ all hires made by manager in time period including departed
Revenue Per Employee: As you know, for the c-suite, one of their most important metrics in determining success is revenue. By dividing revenue per employee you can give the c-suite an understanding of macro-level productivity. This number is also useful when compared to your competition. It gives management a benchmark of how your company is fairing in terms of productivity against the competition.
Together, these four metrics work to give you the strategic insights necessary to equip the C-suite with information that they need to make informed decisions around HR and their organization.