15 useful metrics to follow for workforce planning
Table of contents
- What Are Workforce Planning Metrics?
- How can strategic workforce planning metrics be helpful?
- 15 meaningful workforce planning metrics to track
- Conclusion
- Frequently Asked Questions
- 5.1. What are the benefits of workforce planning?
- 5.2. What are some common challenges faced in workforce planning?
- 5.3. What role does technology play in workforce planning?
- 5.4. What are some best practices for effective workforce planning?
- 5.5. How can ProHance help with my workforce planning efforts?
In today’s dynamic business landscape, having the right people with the right skills at the right time is crucial for success. This is where workforce planning comes in. It’s a strategic process that helps organizations anticipate future talent needs and develop a roadmap to meet them.
What Are Workforce Planning Metrics?
Workforce planning metrics are the quantitative measurements used to track the effectiveness of your workforce plan. These metrics encompass aspects like the time it takes to fill open positions (time-to-fill), the cost associated with hiring new employees (cost per hire), the rate at which employees leave the organization (turnover rate), employee satisfaction levels, and the success of training programs through return on investment (ROI). By monitoring these metrics, organizations can identify areas for improvement and ensure their workforce planning strategies are aligned with achieving business goals.
How can strategic workforce planning metrics be helpful?
Strategic workforce planning metrics are like guideposts on your talent management journey. They provide valuable insights into areas like recruitment efficiency (time-to-fill, cost per hire), employee engagement (turnover rate, satisfaction scores), and the effectiveness of skills development programs (skills gap analysis, training ROI). By tracking these metrics, organizations can identify potential talent shortages or redundancies, measure the impact of their workforce initiatives, and make data-driven decisions to optimize their human resources for long-term success.
15 meaningful workforce planning metrics to track
Effective workforce planning hinges on measuring the success of your strategies. Here are 15 crucial workforce planning metrics to track, along with details on what they reveal-
Employee Turnover Rate
This metric calculates the percentage of employees who leave the organization within a specific period (usually a year). A high turnover rate can indicate low employee morale, skills gaps, or competitive compensation issues.
How to Measure Employee Turnover Rate- (# of Employees Separated in Period) / (Average Number of Employees) x 100
ProHance can analyze employee sentiment data and identify potential risk factors for turnover. This allows for proactive interventions like engagement programs or addressing areas of dissatisfaction, ultimately leading to improved retention rates.
Also Read: The Employee Turnover Guide: What It Is And How You Can Manage It
Retention Rate
The opposite of turnover rate, this metric reflects the percentage of employees who stay with the company. A strong retention rate signifies a positive work environment and an engaged workforce.
How to measure employee retention rate- (Number of employees retained / headcount at start of tracked period) x 100 = retention rate (%).
Diversity and Inclusion Metrics
Track metrics like the representation of different genders, ethnicities, and age groups within your workforce. Strong diversity and inclusion lead to a wider talent pool, improved innovation, and better decision-making.
Time to Fill Positions
This metric measures the average time it takes to fill an open position, from advertisement to onboarding the new hire. A high time-to-fill indicates recruitment inefficiencies or a lack of qualified candidates.
How to Measure Time to Fill Positions– Track the dates from when a position is opened to when it’s filled. Calculate the average time across a set period (e.g., monthly, quarterly).
ProHance can streamline the recruitment process by providing candidate-sourcing tools and applicant-tracking functionalities. This can significantly reduce the time it takes to fill open positions.
Headcount
This is the total number of employees in your organization. It’s crucial to monitor headcount fluctuations to ensure you have the right number of people to meet business needs. ProHance can analyze workload distribution, project pipelines, and future business needs to help you optimize headcount planning. This ensures you have the right number of people in the right roles at the right time.
Cost per Hire
This metric calculates the total expenses associated with filling an open position, including advertising, recruitment fees, and onboarding costs. Keeping this cost low indicates efficient recruitment practices.
How to calculate cost per hire- Total spent on recruitment/number of roles filled = average cost per hire.
ProHance can provide detailed cost breakdowns for each aspect of the recruitment process. This allows you to identify areas for cost optimization and improve your recruitment efficiency.
Absenteeism
This measures the rate at which employees are absent from work due to illness or other reasons. High absenteeism can disrupt productivity and impact operational costs.
How to calculate absenteeism- (Number of days missed / number of planned work days) x 100 = absenteeism rate (%).
ProHance can analyze employee performance data and identify patterns related to absenteeism or excessive overtime. This allows for targeted interventions to address underlying causes and improve overall workforce well-being.
Overtime Costs
Reducing overtime costs isn’t just about the bottom line. While it directly impacts your labour budget, excessive overtime can lead to a cascade of negative effects. Overworked employees experience burnout, leading to absenteeism, presenteeism, and ultimately, higher turnover. This cycle of exhaustion also reduces productivity and increases the risk of safety incidents. Furthermore, a culture of constant overtime signals a disregard for employee well-being, decreasing engagement and satisfaction. ProHance offers a solution to this problem. By providing real-time insights into workloads, skills, and activity levels, ProHance empowers managers to make data-driven decisions about staffing and scheduling. Automated time tracking, workload forecasting, and skill-based task allocation all contribute to optimizing resource allocation and minimizing the need for overtime. ProHance can even integrate with sentiment analysis tools to identify potential causes of burnout before they arise. By fostering a work environment that values employee well-being and optimizes workflow, ProHance helps reduce overtime costs while creating a more productive and engaged workforce.
Resource Utilization Rate
This metric assesses how effectively your employees are utilizing their time and skills. A low utilization rate might suggest a skills mismatch, lack of motivation, or inefficient workflows.
This can involve time management software or surveys to track employee activities. Analyze the portion of time spent on core tasks compared to unproductive activities.
Billable vs. Non-Billable Utilization (for Service-Based Industries)
For service-based businesses, this metric measures the portion of time spent on directly generating revenue (billable) compared to administrative or overhead tasks (non-billable). A healthy balance is crucial for profitability.
Employee Engagement (eNPS)
Employee engagement is a crucial aspect of workforce management. Engaged employees are more motivated, productive, and loyal to their organization. A key metric for measuring employee engagement is the Employee Net Promoter Score (eNPS). The eNPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. A higher eNPS indicates a more engaged and positive workforce.
Manager-to-Employee Ratios
According to Gallup, most large companies have around one manager for every ten employees. Employee Net Promoter Score (NPS) measures employee satisfaction and loyalty. This metric reflects the number of employees supervised by one manager. A high ratio can lead to decreased employee attention and hinder development. Calculate your manager-to-employee ratio by determining how many employees there are for every manager. For example, a workforce with 40 managers and 400 employees would have a 1:10 ratio.
Skill and Competency Gaps
Identify the gaps between the skills currently present in your workforce and the skills required for future success. This helps prioritize training and development initiatives.
Training and Development ROI
Calculate the return on investment for your training programs. Analyze if the skills gained are translating to improved performance and justifying the program’s cost. One report by the Association for Talent Development reported that on average, a company will spend $1,252 per employee on training and development.
Calculate ROI using this formula- (Monetary value of post-training benefits – total training expenses) x 100 = ROI (%).
ProHance can track employee performance data after training programs. This allows you to measure the impact of training on key metrics and calculate the return on investment (ROI) for your training initiatives.
Internal Mobility Rate
Track the number of employees who move into new positions within the company. A healthy internal mobility rate indicates a strong talent pipeline and opportunities for employee growth.
Here’s how to calculate the internal mobility rate- (Total number of job moves internally / headcount) x 100 = mobility rate (%).
By monitoring these 15 workforce planning metrics, you can gain valuable insights into your human capital landscape. This data can then be used to identify areas for improvement, make data-driven decisions, and ensure your workforce planning strategies are aligned with achieving your organizational goals.
Also Read: Workforce Capacity Planning: Know Your Current and Future Workload Insights
Conclusion
In today’s dynamic business environment, having a strategic workforce plan is no longer optional, it’s essential. By implementing workforce planning practices and tracking the metrics outlined above, you can gain a clear picture of your current talent landscape and future needs. This data-driven approach empowers you to make informed decisions about recruitment, training, and development, fostering a highly skilled and engaged workforce. Remember, your workforce is your greatest asset. By investing in workforce planning, you’re investing in the future success of your organization. So, take the first step today and embark on your journey towards building a future-proof workforce.
Frequently Asked Questions
Q1. What are the benefits of workforce planning?
Workforce planning offers a range of benefits for organizations, including-
- Improved Talent Acquisition- By anticipating future needs, you can attract and hire the right people with the right skills at the right time.
- Reduced Turnover- Effective workforce planning helps create a positive work environment and invest in employee development, leading to higher retention rates.
- Enhanced Productivity- A well-trained and skilled workforce is more efficient and productive, contributing to improved business performance.
- Reduced Costs- Workforce planning helps avoid understaffing or overstaffing situations, leading to cost savings.
- Increased Agility- Proactive workforce planning allows your organization to adapt quickly to changing market conditions and business needs.
Q2. What are some common challenges faced in workforce planning?
Here are some common challenges organizations encounter in workforce planning-
- Uncertainty about future needs: Predicting future business demands and skills requirements can be difficult.
- Data limitations: Limited access to accurate and reliable data can hinder effective workforce planning.
- Lack of collaboration: Silos between departments can make it difficult to align workforce planning with overall business goals.
- Resistance to change: Employees may be resistant to changes in skills or roles.
Q3. What role does technology play in workforce planning?
Workforce planning software can be a valuable tool to automate tasks, improve data analysis, and streamline the workforce planning process. These software solutions can offer features like-
- Data integration: Import data from various sources like HR systems, payroll systems, and skills assessments.
- Workforce modelling: Create scenarios and forecasts to predict future workforce needs.
- Skills gap analysis: Identify skills gaps based on current and future job requirements.
- Talent management tools: Manage employee development, succession planning, and career paths.
- Reporting and analytics: Generate reports and visualizations to track progress and measure the effectiveness of workforce plans.
Q4. What are some best practices for effective workforce planning?
Here are some key best practices for effective workforce planning-
- Align with business strategy: Start your workforce plan by aligning it with your overall business strategy and goals.
- Analyze current workforce: Assess your current workforce in terms of skills, experience, demographics, and turnover rates.
- Forecast future demand: Predict your future workforce needs based on business strategy and market trends.
- Identify gaps: Identify any gaps between your workforce supply and future demand (skills, headcount).
- Develop solutions: Develop and implement strategies to address the identified gaps (recruitment, training, upskilling).
- Monitor and adapt: Regularly monitor your workforce plan, adjust strategies as needed, and adapt to changing circumstances.
Q5. How can ProHance help with my workforce planning efforts?
ProHance, a leading workforce analytics and productivity measurement solution, can significantly enhance your workforce planning efforts. ProHance goes beyond basic metrics to offer a comprehensive suite of tools that can assist in various aspects of workforce planning:
- Proactive Approach to Retention- ProHance analyzes employee sentiment data and identify potential risk factors leading to turnover. This allows you to implement proactive interventions like engagement programs or addressing areas of dissatisfaction, ultimately improving retention rates.
- Data-Driven Recruitment- ProHance streamlines the recruitment process by providing candidate sourcing tools and applicant tracking functionalities. It can also analyze recruitment data to identify areas for improvement and reduce time-to-fill for open positions.
- Skill Gap Analysis and Development- ProHance streamlines with skills assessment tools and analyzes employee skills against future job requirements. This helps identify skill gaps and prioritize training and development programs to bridge those gaps, ensuring your workforce possesses the skills needed for future success.
- Optimizing Resource Allocation- ProHance offers time tracking and activity monitoring tools. By analyzing employee activities, you can identify potential inefficiencies in resource allocation and optimize workload distribution. This ensures your workforce is focused on the most impactful tasks and projects.
- Measuring Training Effectiveness- ProHance tracks employee performance data after training programs. This allows you to measure the impact of training on key metrics like productivity or project completion rates. By calculating the return on investment (ROI) for training initiatives, you can make informed decisions about future training programs.
By integrating ProHance with your workforce planning strategies, you gain a deeper understanding of your human capital landscape. This data-driven approach allows you to make informed decisions regarding talent acquisition, development, and resource allocation. Ultimately, ProHance empowers you to build a future-proof workforce that can adapt and thrive in a changing business environment.
