Metric

Formula

Rationale

# 1. Unscheduled Absence per Employee

Total Unscheduled Absence / Total Employees (Headcount or FTE)

1. In uncertain times workforce attendance is even more crucial. Tracking absence rates, particularly sick leave and managing problem areas will help increase productivity and costs are kept in check.

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#2. Employee-Initiated Separation Rate by Length of Service- <1 year

Total EI Terminations by Tenure / Total EI Terminations

Permanent recruitment has to justify the cost involved. Short tenured separation equals low return on recruitment. Measuring the percentage of employees who left in their first year is key and reducing turnover rates, particularly for high performing or key roles is essential.

#3. Net Recruitment Ratio

Total External Recruits / Total Terminations

Net recruitment measures the total number of external recruits that replace terminating employees. The metric is used to determine whether an organisations’ workforce is expanding or contracting. In the current climate it may serve to track whether a company is contracting at a targeted rate. Further analysis by demographic segments ensure the contraction in the right workforce segments.

#4 Staffing Rate – Revenue Generating

FTE Revenue Generating / FTE

This measures the percentage of the workforce, in Full time equivalent terms, serving in revenue generating roles. Given the increasing focus on cost reduction and leaner organisations to reduce overhead, managers should track the proportion of revenue generating employees as an indicator of efficiency in organisational design.

#5. Return on Human Investment Ratio

(Operating Revenue – Operating Expense) / Remuneration Total

In a declining economy, there can be no wasted investment dollars. HR departments need to ensure they are focused on the issues that matter most to the business. Understanding and tracking the proportional human capital costs

#6. Management Staffing Ratio

(Non Managerial FTE) / Managerial FTE

Companies faced with layoffs may need to consider the most appropriate mix of managers to non managers going forward. Put simply, the cost of a manager is typically higher than non managers. Unpacking corporate objectives and engaging in strategic workforce planning may assist in determining the balance.

#7. Staffing Rate – FTE – Fixed Term Contract

Total Fixed Term Contractor FTE / Total FTE

Finding the right mix of contingent workers can provide the right flexibility to alter the workforce size in periods of market uncertainty. Whilst increasing flexibility, the tradeoff is the cost. Benchmark data can compare organisational results against the industry median.

#8. Employee Engagement Index

This measure is a relative measure of employees’ engagement in their work

Engaging employee’s hearts and minds is arguably more important in uncertain times. On an individual level, employees may experience a sense of loss of personal security, and worse, a potential breakdown of the family unit resulting from debt and personal crisis as salary levels face downward pressures. Employers may experience less confident workers, less flexibility, lost productivity and potential downsizing as an extreme result of financial instability generally. Organisations should study engagement to see whether a lack of engagement is driven by reward systems, expectation setting g, personnel management, cultural environment or other aspects of employment.