Measuring HR Part 3 of 3


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the presentation is the third part of 3 part series, on my lecture at KIAMS - 2011

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Measuring HR Part 3 of 3

  1. 1. MEASURING HR October – December 2011 Kirloskar Institute of Advanced Management Studies, HARIHAR,PUNE Archita Panda Part – 3/3.
  2. 2. COVERAGE OF THIS COURSE <ul><li>Evolution of HR as a function and Future/Present of HR </li></ul><ul><li>Integrated HR functions and HR Scorecard </li></ul><ul><li>ROI for HR Services </li></ul><ul><li>Approach to Measure HR </li></ul><ul><li>HR Metrics and Cost estimation of HR function </li></ul><ul><li>HR Cost and Budgeting </li></ul><ul><li>HR Accounting </li></ul><ul><li>HR Audit </li></ul>Covered in Part 1 of 3 part series ( )) Covered in Part 2 of 3 part series ( ) Being Covered in Part 3 of 3 part series (current one)
  3. 3. <ul><li>HR Cost : Overall operating cost of the HR Processes/ </li></ul><ul><li>Function. </li></ul><ul><li>Type of Cost : </li></ul><ul><li>Direct Cost </li></ul><ul><li>Other Direct Cost </li></ul><ul><li>Indirect Cost (Recharges /Recoveries) </li></ul>HR COST
  4. 4. <ul><li>Direct Cost : </li></ul><ul><li>Direct costs refer to fixed, variable and sunk costs related to </li></ul><ul><li>Employment Cost </li></ul><ul><li>Staff Cost </li></ul><ul><li>These costs are essential for the recruitment </li></ul><ul><li>and retention of employees. But not limited to these. </li></ul>HR COST
  5. 5. <ul><li>Employment Cost </li></ul><ul><li>Salary, wages and allowances </li></ul><ul><li>Bonus /variable pay </li></ul><ul><li>Pension Cost </li></ul><ul><li>Direct Cash / Benefit </li></ul><ul><li>Expatriate Cost/ Benefit </li></ul><ul><li>Govt. and State Taxes </li></ul><ul><li>Other employment Cost </li></ul>HR COST
  6. 6. <ul><li>b. HR Staff Cost </li></ul><ul><li>Recruitment Cost </li></ul><ul><li>Attrition/Termination Cost </li></ul><ul><li>Other Staff Cost </li></ul>HR COST
  7. 7. <ul><li>2. Other Direct Cost for HR : </li></ul><ul><li>Course of Training and Orientation </li></ul><ul><li>Communication and Stationary </li></ul><ul><li>Travel and entertainment </li></ul><ul><li>Outsourced Cost </li></ul><ul><li>Professional / Consultancy Fees </li></ul><ul><li>IT Cost </li></ul>HR COST
  8. 8. <ul><li>3. Indirect Cost : </li></ul><ul><li>IT Recharges </li></ul><ul><li>Service Recharges </li></ul><ul><li>Property Recharges </li></ul><ul><li>Recoveries </li></ul>HR COST
  9. 9. RESOURCING METRICS <ul><li>Cost per Hire : (Advertising + Agency Fees + Employee Referrals + Travel cost of applicants and staff + Relocation costs + Recruiter pay and benefits) /Number of Hires </li></ul><ul><li>Ratio of new hire to Total Head count </li></ul><ul><li>Average relocation package </li></ul><ul><li>Resource requisition per recruiter </li></ul><ul><li>Recruitment cost per hire </li></ul><ul><li>Average sign – on bonus </li></ul><ul><li>Hiring cycle time ( Time to Start & Time to fill ) </li></ul><ul><li>Open positions vs. Offer made </li></ul><ul><li>Source distribution </li></ul><ul><li>Skill distribution </li></ul><ul><li>% of Diverse hire </li></ul><ul><li>Interview to offer ratio </li></ul><ul><li>Offer to acceptance ratio </li></ul><ul><li>Abort ratio </li></ul>
  10. 10. TRAINING METRICS <ul><li>Training spend </li></ul><ul><li>Training hour per employee </li></ul><ul><li>Training money spent per employee </li></ul><ul><li>Percentage employee trained per year </li></ul><ul><li>Training staff available per employee </li></ul>
  11. 11. OTHER HR METRICS <ul><li>Variance of HR Operating Cost ( Budget vs Spent ) </li></ul><ul><li>HR Staff cost as % of Total HR Operating cost </li></ul><ul><li>Formula : HR staff cost / total HR Operating cost * 100 </li></ul><ul><li>HR Cost per Business Employee </li></ul><ul><li>Formula : Cost of HR / No of Business Employee (excl HR) </li></ul><ul><li>No of Employee per HR Person </li></ul><ul><li>Formula: No of Employee/ no of HR Employee </li></ul><ul><li>No of Employee for Performance Review </li></ul><ul><li>Formula : No of associates completed review / No of eligible </li></ul><ul><li>associates *100 </li></ul>
  12. 12. OTHER HR METRICS <ul><li>Voluntary turnover : No of employee exited due voluntary reasons/ Average no of employee * 100 </li></ul><ul><li>Rating wise turnover : No of voluntary leavers for each performance rating/ No of employee rated * 100 </li></ul><ul><li>Improved performer : No of employee rated low in last performance review and have higher rating in year 2/ all low rated employee last year </li></ul><ul><li>Rating Distribution: Rated employee for each performance rating/ total employee rated in the performance management cycle * 100 </li></ul>
  13. 13. OTHER HR METRICS <ul><li>Employee Engagement Index: No of favorable response/ total no of resources * 100 </li></ul><ul><li>% Employee assessed against capabilities: Total no of employee assessed / no of eligible employee * 100 </li></ul><ul><li>No of employee with Assignment in Development plan: </li></ul><ul><li>no of employees with international assignment plan/ </li></ul><ul><li>no of employees * 100 </li></ul><ul><li>International mobile employee ratio: No of employee in international assignment/ total no of employees </li></ul>
  14. 14. OTHER HR METRICS <ul><li>PBT per employee: Profit Before Tax/ No of employee </li></ul><ul><li>Total employee cost / Total Operating Cost </li></ul><ul><li>Average employee cost :Total employee cost / No of employee </li></ul><ul><li>Return on Investment in Human Capital : Revenue after loan impairment – Non staff cost / Staff Cost </li></ul><ul><li>Internal Promotion Rate : No of promotion/ average headcount * 100 </li></ul><ul><li>Female associates in talent program : No of female associates in talent program/ total no of female </li></ul><ul><li>associates * 100 </li></ul>
  15. 15. OTHER HR METRICS <ul><li>No of female employee at each level : No of female associates in particular grade / total no of employee * 100 </li></ul><ul><li>Compensation Cost Distribution at Each Level : Fixed compensation at </li></ul><ul><li>each level / Total fixed compensation * 100 </li></ul><ul><li>Variable compensation : Variable compensation at each level/ total compensation * 100 </li></ul><ul><li>Compensation cost vs. Revenue : Total Compensation Cost/ Revenue * 100 </li></ul>
  16. 16. <ul><li>HR Budget : A 12-month operating budget ending on the </li></ul><ul><li>last day of the calendar year </li></ul><ul><li>Forecast : At certain period of time during the FY </li></ul><ul><li>( Actual Spent + Budget for the rest of the year ) </li></ul><ul><li>Monitor : Set frequency for report/Check Variance/Control </li></ul>HR BUDGET
  17. 17. <ul><li>How to make a Budget ? </li></ul><ul><li>Defining Expense Areas </li></ul><ul><li>Historical Data </li></ul><ul><li>Assumptions </li></ul><ul><li>Projections ( Reference Business Strategies ) </li></ul><ul><li>Consolidate </li></ul><ul><li>0 </li></ul>HR BUDGET
  18. 18. <ul><li>Archita Panda </li></ul><ul><li>Email: [email_address] </li></ul><ul><li>Mobile: 9850094074 </li></ul><ul><li>Linkedin Profile: </li></ul><ul><li>End of Part – 3/3. </li></ul><ul><li>0 </li></ul>CONTACT ME FOR FURTHER DETAILS