5 Powerful Metrics for Strategic Workforce Planning

Most businesses have clear statements of their vision, goal, and strategy. It conveys an organization’s mission, and how they intend to achieve these objectives over the next few years. The organization needs the appropriate number of individuals with the appropriate backgrounds, profiles, abilities, and expertise to carry out this strategy successfully. This is why the planning and development of a strategic workforce is necessary. This methodical corporate procedure aims to foresee and prepare for any human resource demands.

Benefits of using workforce metrics:

Strategically monitoring aspects of the workforce is an important process for any business. Its main objective should always be to drive business growth, and be in a prepared state for continuity and agility.

• Enhanced ability for HR to adapt and adjust when faced with unpredictable and predictable market shifts and talent trends.
• Metrics enable HR to quickly gather, view, and analyze data about employees such as absenteeism, over- or under-staffing, accurate time tracking, and compliance. Armed with knowledge can prevent many workforce management issues.
• Optimized operational planning, and insight into employee satisfaction, turnover, training and development, and more.

Workforce Formulas

The fact that many firms are beginning to employ HR metrics as a significant component of their entire business strategy may be the most obvious indication that analytics are gaining traction. Starting with a few simple HR metrics can have a significant impact on your firm, enhancing your data analysis game.

Average age

Sum of age of all headcount / headcount

Human resource professionals are able to better manage a workforce that is becoming multigenerational with the help of age-specific data. It helps companies understand age-related differences in beliefs, actions, motives, attitudes, and perspectives on important work benefits. This gives organizations a magnified view into the variations that can improve employee retention and recruitment initiatives. Because age is correlated to experience, having a high age average could indicate a lack of updated technological skills, or a low age average could indicate a lack of working experience in teams. Both sides of the scale can be addressed through training and development.

Average length of service

Length of service for total headcount / headcount

This indicator determines the typical length of average employment for all staff members. With this statistic for comparison, HR can also get more detail into team or group specifics related to age. However, knowing the average time that employees stay at the company, in different teams, can also show how this metric varies by level of experience. It may indicate potential issues with junior level or senior retention, or it could show a low average indicating regardless of age, employees are not staying at the company for the medium or long term. Any unfavorable result will be a prompt for HR to investigate.

Absenteeism rate

(Total number of absent days / Total number of available workdays in the period) * 100

The absenteeism rate quantifies the frequency with which workers miss work due to unanticipated illness or other reasons; weekends, holidays, and vacations are not included. A high absenteeism rate across a company may indicate that the workforce is experiencing burnout. Or they might be overworked and anxious, which increases their risk of becoming ill. Optimize the staff’s workloads, enhance the workplace environment, or provide the necessary tools and resources such as a document management system (DMS) for them to efficiently complete tasks. Companies can compare the absenteeism rate to that of an individual, a team, or the entire company. A high absence rate is roughly 4% or more, compared to an average result of around 1.8%.

Turnover rate

Number of terminations during a period / Number of employees at the period start

The frequency with which employees leave a company is referred to as the employee turnover rate. Both voluntary (initiated by the employee) and involuntary turnover are possible (representing firing, layoff, or expiration of the employment agreement). The turnover rate of a corporation may reveal something about its culture. While there are multiple formulas to determine turnover, the above is one of the most straightforward. A high turnover rate could initiate the need for an employee satisfaction survey to establish the pain points that cause people to leave.

Salary increase since last year

(Current salary – salary previous year) / salary previous year

Employee remuneration is typically a company’s largest operating expense, but it can also work to HR’s advantage. The main factor leading to employee turnover that is voluntary is commonly stated as compensation. HR should understand how pay is allocated across teams to help with smart decisions that impact the hiring and retaining of staff. Ideally, companies will want fewer employees working above or below payrolls band as well as seeing fewer gender and ethnicity salary disparities. By harnessing this information, HR can minimize the number of employees resigning due to low pay. Compensation analysis can be a very useful metric when you have the appropriate data.

Technology for Improved HR Practices

KRIS HR Document Management System can help human resource professionals improve workforce management by freeing up valuable time to meaningfully spend efforts on driving employee engagement. Having the right focus on the workforce can drive down costs in the short and long term. By combining historical and real-time transactional data with knowledge about external trends and patterns that are stored in a central database, HR can leverage technology to communicate with and help develop the skills of employees.