Measuring HR success isn’t easy. You can and should run your HR figures on the HR That Works Cost Calculator, a tool that will probably show the variance in your HR practices to be at least 10% of payroll. So, if you have $1 million in payroll, the variance will be at least $100,000. That’s one way of looking at HR dollars. Another approach is to determine “HR costs per employee.” These costs might include compensation, benefits, recruitment costs, outsourcing costs, as well as office space and equipment. Many companies will look at revenue per employee. Although this is certainly important, it also includes many variables that have nothing to do with HR effectiveness. For example, in a poor economy, revenue per employee will initially go down and then after cost-cutting, layoffs, etc., might well rise past previous levels. Consider what happened during the recent recession. Ultimately, the question remains, what information are you seeking and what will you to do with it? HR That Works members should review the Benchmarking Worksheet to generate some ideas.
