Human Resource (HR) Metrics
Human Resource (HR) Metrics
PRODUCTIVITY CONCERNS: As a business owner do you lay awake at night worrying about employee productivity?? Human Resource (HR) metrics will help solve that concern. HR metrics are easy to use formulas to measure and improve employee productivity and reduce costs.
HR metrics are not new in the Human Resource profession; however, many small companies are unaware of this productivity improvement tool. There are several metric formulas to help bring more dollars to your bottom line.
For example, As a business owner, you are wrestling with a decision, "Do I hire more people or not?" Here is one toll that will help you make that decision:
- METRIC NAME
Revenue per fulltime equivalent employee (FTE)* - METRIC DESCIPTION
The number of revenue dollars generated per FTE - METRIC FORMULA
Revenue divided by (/) number of FTE's
Example: ABC Company has a total of 9 employees (8 part time and 1 fulltime). The part-time employees are working ½ time (1040 hours). Revenue is $500,000 per year. The part-time hours are added up and divided by 2080 hours (8 employees x 1040 hours worked / by 2080 hours (1 FTE) = 4 FTE + 1 fulltime employee =5 FTE's.
I divide my revenue ($500,000 by 5 FTE‘s = $100,000 of Revenue per 1 FTE. I can then compare this with my previous year's FTE Revenue. Hopefully, I will be able to get information from my professional association as to similar numbers.
This information will determine if my FTE productivity is better or worse than my previous year and my industry. I can then make a hire or no hire decision. This is an easy way to gauge yourself against your Revenue goals and your competition!!
Contact Pinnacle PEO Corp for more information on productivity and revenue improvement using HR Metrics!
+*FTE is defined as an employee who is paid for 2080 hours (52 weeks per calendar year) x 40 hours a week = 2080 hours of paid work, vacation, holidays, and sick time).
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