Human Capital Metrics
Human Capital Metrics have become important for Balanced Scorecards and other Performance Measurement Systems. Human Capital Metrics are important because of the need for effective management over human resource capital (i.e. the intellectual capital that drives value).
Human Resources Metrics measure the efficiency, or the time and cost of activities. Human Capital Metrics measure the effectiveness of such activities. Time to fill becomes time to productivity; turnover rate becomes turnover quality; training costs become training return on investment.
The Society of Human Resource Management (SHRM) has identified ten key human capital measurements:
1) Revenue Factor = Revenue / Total Full Time Employees
2) Voluntary Separation Rate = Voluntary Separations / Headcount
3) Human Capital Value Added = (Revenue - Operating Expense - Compensation & Benefit Cost) / Total Full Time Employees
4) Human Capital Return on Investment = (Revenue - Operating Expenses - Compensation & Benefit Cost) / Compensation & Benefit Cost
5) Total Compensation Revenue Ratio = Compensation & Benefit Cost / Revenue
6) Labor Cost Revenue Ratio = (Compensation & Benefit Cost + Other Personnel Cost) / Revenue
7) Training Investment Factor = Total Training Cost / Headcount
8) Cost per Hire = (Advertising + Agency Fees + Recruiter's Salary/Benefits + Relocation + Other Expenses) / Operating Expenses
9) Health Care Costs per Employee = Total Health Care Costs / Total Employees
10) Turnover Costs = Termination Costs + Hiring Costs + Training Costs + Other Costs
If you need assistance with Human Capital Metrics, Elmore
Consulting Group Inc. (ECGI) can benchmark your organization against
your industry or peer group.