Has HR ever had more on its plate than the past couple of years? From a worldwide pandemic to a shift in where you do your work every day, your head is probably spinning from trying to keep up. Many businesses are still grappling with the impact, especially trying to keep their employees during The Great Recession.
One way to chart your path forward in today’s uncertain environment is to keep your eye on your data. But which data? It seems like there’s a different metric for every day of the week (and 2 for Sundays)! Here are 4 of the data points you should keep an eye on, plus one bonus tactic that will help to make your data really sing.
1) Replacement Cost
What? The total cost associated with hiring an employee to replace one who’s left.
Why? You might be scratching your head, wondering why this is the top data point to focus on if the point is to keep your employees. Simply put, the best way to retain your employees is to have a solid grip on just how they’re worth, and how much it would cost to replace them.
How? According to SHRM, a conservative estimate of this cost is between 50%-75% of an employee’s annual salary. For an employee earning $30,000, that’s a minimum of $15,000. What goes into that? HR time spent advertising the position, interviewing candidates, and performing background checks. But other departments contributed their employees’ time to reviewing applications and participating in the interview process, and then onboarding the new employee after a hire. This also encompasses delays in critical project timelines caused by insufficient staffing. If the new hire will require specialized training or certification, that should be included as well.
2) Employee Engagement
What? A measure of how connected an employee feels to the company and to his/her role as a contributor to the company’s initiatives.
Why? First and foremost, it’s the right thing to do. Being concerned about how satisfied or engaged your employees are shows basic respect for them and the skills and talents they bring. But for the company, it makes good business sense, as so many studies have shown. Companies with higher employee engagement rates see higher productivity; stronger customer relationships; fewer safety incidents and absenteeism; and higher customer metrics overall. The bad news is that the latest Gallup State of the American Workplace survey found that just 33% of US companies have employees that are “engaged,” the lowest figure seen until now.
How? There’s no shortage of ways to measure employee engagement. One typical way is to send out a survey, usually annually, and ask questions touching on this topic. Another is to calculate the company’s Net Promotor Score, which measures how likely an employee is to recommend the company to their family and friends.
Consider, though, a more “old school” way of measuring, through a stay interview. Coined by Beverly Kaye over two decades ago, these conversations occur before an employee has signaled their intention to leave. As Kaye and others have found, simply asking, “What will it take to keep you here?” is a powerful question. Consider having these conversations with your employees, and keeping a list of the topics that come up.
3) Retention Rate
What? The proportion of a group of employees who remain out of the total group that began at the same time.
Why? Understanding which employees are leaving your company is important to ultimately understanding what might be causing them to leave. And keeping track of this can be helpful, since it puts departures into black and white. You might have an impression of what’s happening, but seeing the actual numbers can set the story straight and give you a solid basis to implement action.
It can also bring to light problems you might not have been aware of in certain locations of your company, or among several different groups of employees (think Sales vs. Warehouse). Since Retention Rate is a lagging indicator – meaning that the thing you’re tracking has already happened – this is best used in conjunction with the other measures mentioned here, not on its own.
How? Choose a starting point in time, perhaps a particular month, and tag all the employees who joined the company during that time range. Next, count how many of that original group of entrants are still with the company at points of time in the future. For your company, it might make sense to measure at 3 months, 6 months, and 1 year. This will give you good data about how employees who all entered at the same time behaved. Did more than expected leave? Was there an event that might have triggered this?
4) EAP Usage
What? The count of employees using the various offerings, by month and by year.
Why? Following on the suggestion above of conducting regular Stay Interviews, look at how your employees are using your Employee Assistance Program (EAP). (All this data is aggregated, of course, and no personally-identifiable information should be available to you.) Keeping an eye on this will allow you to keep a finger on the pulse of how your employees are doing, whether they’re thriving, and whether there are any additional benefits that you could offer to meet their needs. This data would also be useful to alert managers or supervisors about what their employees (in general) might be facing, so they can respond accordingly.
How? You’ll want straightforward counts to measure this. Ask your EAP provider for a report that shows the count of all contacts with employees, including what the reason was for the contact. (They’ve probably already developed categories for this.) Look at the tallies by month to start, and sort from the highest to the lowest. Start by focusing on the top 5, and note especially if the categories in the top 5 remain consistent or change often.
To really make your data sing, use the Bonus Strategy below:
Unpack Your Data
What? Break down your overall numbers into smaller groupings.
Why? Looking at each of these for your overall company is going to be extremely helpful, but to really target what might be driving departures, you need to look below the overall numbers. What’s happening not just at the company level, but at the department level? What does EAP usage look like among employees in Sales compared to the Warehouse, for example?
How? Take the analysis you’ve already done for any of these measures and simply break it into categories, like department or job type or geographic location. Take a step back and compare whatever the measure is across these groups, and see whether anything looks curious or unexpected. That’s your starting point for asking more questions and really getting to whatever the drivers are at your company.
About the Author
Julie Alig, Ph.D., is Founder and CEO of JLA Analytics, LLC, which helps organizations translate their data into actionable information. After earning her Doctorate in Political Science from the University of Chicago, Dr. Alig spent 20 years in higher education administration providing C-suite decision support using predictive analytics and statistical modeling, data visualizations, and interactive dashboards, among others. She has held multiple leadership and elected positions in the Northeast Association for Institutional Research (NEAIR), and has delivered workshops and talks on data analytics at both regional and national conferences in the higher education field. Dr. Alig is active with the NH Tech Alliance, and with its initiatives surrounding women and girls in STEM.
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