by Bill Swan, SHRM-SCP, Principal Consultant
The size of your small business in terms of employee counts may be lower than others, however it is never too early to be mindful of numbers that involve the personnel. Beyond the financials for payroll and benefits, employee analytics speak to real impacts affecting the business. The sooner a small company gets in the habit of watching important numbers the sooner decisions can be made to make improvements in a variety of areas.
With FIT HR, reviewing the present conditions of the business, it may be found that management is not able to answer personnel questions. Data involving retention and turnover rates, time to hire, overtime hours, revenue per employee and more, all impact the business whether the management realizes it or not.
Let’s review just a few areas, starting with the hiring process in your small business
The act of hiring has costs beyond paying for job posts and providing salary information. There is a cost that involves time. Business time that could have been utilized doing other things such as focusing on clients and customers, selling more product or services, or conducting business meetings. All that time had potential to earn revenue, but in the short term, that time was spent at the expense of investing in hiring. This highlights the importance of ‘Time to Hire’, in other words, the length of time it takes to hire. The shorter the time to hire, the less costly. We would never advocate for cutting corners and making fewer quality decisions, but having a good process in place to follow is important and maximizes cost efficiencies.
A further unresearched area in a small business is the retention and turnover rates.
Retention rate speaks to how well a company is doing at keeping people. Turnover rates measures people leaving the company. Accordingly, these measure people staying with the company or leaving the company. Mutually, they have financial implications and shed light on engagement, the culture, hiring in alignment to company values, employee development, management practices and more. There are many potential areas to work on when we find that poor retention or high turnover rates are evident in an organization.
These are past performance indicators yet the ability to measure past outcomes is important as it sheds light on what occurred. Linking those results into strategy decisions for changing the future is where there is opportunity to transform the business. The information is much less useful if not used to influence future decision making.
If your business could use some help in determining your human resources analytics, we would love to help. FIT HR consultants have been in the positions of having to conduct this important work many times and are ready to help your business make changes for a brighter future.