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Human
Resources
Ratios
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Preface by the author
Dear reader,
Employees make the difference. This is supported by several studies and is a
much-quoted statement by companies about their employees. Nevertheless,
practice shows that the companies and the respective Human Resources (HR)
departments know relatively little about the so-called »human capital«.
Who are our performance bearers? Where are the most talented teams? How
effective is our leadership guidance and teamwork in internal and external
comparison? From where do we recruit future employees or where do our
employees go when they leave the company? These are just some of the
questions companies must repeatedly ask themselves or are confronted with.
The HR performance indicators in this manual are intended to give HR managers targeted information to optimize the performance of the organization
using appropriate indicators. It’s not only the established performance indicators as such, but in particular their development over time that provides the
basis for conclusive evidence and enables further targeted measures within
an organization. Priorities for human capital in the near and medium term
future can be determined by the results. Instincts are backed with facts,
investment or cuts can be credibly represented and targeted progress of the
effectiveness within the company achieved and measured. The use of HR
performance indicators will also facilitate transparency within the company
and serve employees, investors and other stakeholders as a basis for improved assessment and analysis. The company will increasingly be accepted
as being trustworthy in terms of human capital and as a genuine business
partner. The book is therefore an ideal companion for HR managers, HR
consultants and also for interested students.
Should your company only now be beginning to evaluate the performance
capability of human resources, you should, to begin with, not measure too
much all at once. Ten to fifteen key parameters can help you and your company obtain the first important cognition and as a result enable you to make
purposeful and sound decisions in relation to your most important resource
– your employees.
Urs Klingler
Please submit questions, suggestions and comments to: HR@cometis.de
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Content
Preface by the Author
1.
Exemplary HR Report
1.1
1.2
Finance Data
HR Performance Indicators
2.
Strategy and Process Planning
(Performance Capability of the Organization)
Yield
Human Economic Value Added (HEVA)
Human Capital Return on Investment (HCROI)
Human Capital Value Added (HCVA)
Net Operating Profit after Taxes (NOPAT) per FTE
Net Profit per FTE
Costs
Average Staff Expenditure
EBIT per FTE
Human Capital Cost Factor (HCCF) per FTE
Cash Flow per FTE
Sales Revenue per FTE
Overtime per FTE
Staff Working Intensity
Ratio of Net Profit / Staffing Expenditure
Return on Sales
Sales Revenue Through New Products per FTE
Performance Measurement
Conducted Employee Evaluations
Succession Planning Factor
Spread of Performance Measurements
Spread of Performance Measurements with Respect to
New Recruitments
Staffing Quality
Staffing Expenditure Structure
Net Staff Requirement
Strategic Job Coverage Ratio
Expatriates Ratio
Average Length of Stay of Expatriates Abroad
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
2.20
2.21
2.22
2.23
2.24
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Content
2.37
2.38
2.39
2.40
Structural Breakdown of the Organization
Age Structure
Proportion of Foreign Employees
Employment Structure
Tenure Seniority Structure
Average Age of Employees
Female / Male Proportions
Qualification Structure
Average Employment Level
Percentage with Respect to FTE
Ratio of Management Staff to Employees
HR Structural Breakdown
HR FTE Compensation Factor
HR Expense in Relation to Total Expenditure
(HR Expense Percentage)
HR FTE Investment Factor
HR Outsourcing Percentage
HR Structural Breakdown
HR FTE Factor
3.
Staff and Resource Planning
2.25
2.26
2.27
2.28
2.29
2.30
2.31
2.32
2.33
2.34
2.35
2.36
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
Recruitment
Initiative Application Indicator (Spontaneous Applications)
Total Costs for Staffing a Position
(Internal and External Costs)
Number of Engagements per Recruiter
Average Vacancy Duration up to the Staffing of a Position
Advertisement Costs per Engagement
Number of Applicants per Advertisement
Efficiency of the Recruitment Interviews
Engagement Efficiency per Recruitment Channel
Engagement Factor
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Content
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
3.22
3.23
3.24
External New-Recruitment Factor
Internal New-Recruitment Factor
External Staffing Acquisition Costs
Employment Rate of University Graduates
Departures
Fluctuation Rate
Early Fluctuation Rate
Ordinary Scheduled Departure Rate
Ordinary Scheduled Departure Rate According to Length
of Employment
Extraordinary Non-Scheduled Departure Rate
Early Retirements in Proportion to Ordinary Scheduled
Retirements
Average Early Retirement Costs per Case
Average Outplacement Costs per Case
Fluctuation Costs (Direct and Indirect Costs) per Employee
Fluctuation Costs in Relation to Personnel Costs
Proportion of Resignations / Dismissals of Top Performance
Bearers
4.
Compensation and Non-Wage Labor Costs
4.1
4.2
4.3
Annual Costs per Payslip
Average Compensation per FTE
Sales Revenue / Personnel Costs Comparison
(Work Intensity)
Total Compensation Development
Wage Structure
Proportion of Variable Compensation
Proportion of Non-Wage Labor Costs
Executive Compensation Factor
Management Compensation Factor
Average Personnel Costs per Man-Hour
Average Costs per Freelancer and Day
Intra-Operational Wage Factor
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
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Content
5.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Insurance and Occupational Pension
Absenteeism / Sicknesses / Accidents
Sick Rate
Accident Rate
Absenteeism Time Costs per FTE and Day
Rate of Burnout Cases per Year
Pension Fund
Percentage of Ordinary Scheduled Retirements per Year
Percentage of Early Retirements per Year
Percentage of Retirements Due to Health Reasons per
Year
6.
Administration and Support
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
Intra-Year Absenteeism Structure
Average Number of Overtime Hours
Average Remaining Annual Leave
Termination Rate
Termination Rate of Employees Hired within the Last Five
Years
Employee Engagement Index
Level of Utilization of Operational Social Facilities
Overtime Hourly Costs per Employee
Costs for Remaining Leave per Employee
Mobbing Rate
7.
Corporate Development
7.1
7.2
7.3
Proportion of Trained Employees per Year
Training Compensation Ratio
Number of Days for Training and Further Education per FTE
and Year
Training Investment Factor per FTE
Training Investment Factor incl. Trainees
Costs per Training Day Conducted Internally
Costs per Training Day Conducted Externally
7.4
7.5
7.6
7.7
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2.20 Staffing Expenditure Structure
Formula
Staffing expenditure per group
Staffing expenditure
x 100 %
Sample calculation
€ 124 million*
€ 2,453 million
x 100 % = 5.1 %
* Example with salaries of management board
Explanation
The staffing expenditure structure gives the percentage of a subgroup in the
total staffing expenditure (e. g. management, executives, qualified employees,
clerks, workers).
Staffing expenditure structures vary widely depending on the industry and
corporate culture. A thorough analysis may reveal decisive perceptions on the
actual corporate structures. Analyses and interpretations are to be approached
with reasonable care and professionalism as different views are held on the
question of wage.
Advantages
Disadvantages
•Provides indication of corporate
personnel cost structure
•Often hard to collect data due to
missing internal structures and
correlation
•Hints on staffing expenditure in
heterogeneous structures
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•Often only available companyspecific
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2.32 Average Employment Level
Formula
Number of full-time equivalents
Number of employees
x 100 %
Sample calculation
46,000
52,100
x 100 % = 88.3 %
Explanation
The average employment level is calculated by dividing the number of fulltime equivalents by the total number of employees. The performance indicator
provides indication on how part-time friendly the employer is. High percentage
allows conclusions about a reduced transparency for the part-time needs
of employees. On the other side, a low average employment level requires
additional planning of the availability of part-time workers, as well as slightly
higher management and administrative burdens.
Advantages
Disadvantages
•Easy to determine
•Possible overtime hours might not
be included in the performance
indicator
•Interesting over time and in
development
•Evaluation possible for subgroups
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•Should be analyzed according to
full-time equivalent subgroups or
divisions
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