It is that time of year again when a company should conduct a HR analysis to prepare for the coming year. It is always good to review how a company is doing regarding people management whether it is a small company, a medium size organisation or a multinational. An HR analysis give you an indication of what to focus on in the coming year, what needs improvement and what is going really well? A valid reason to do this is your company could be losing money. Image you could be losing money in 2013 and not realising it.
An HR analysis of your staff could give you insights regarding what are the strengths and weaknesses of your company. For instance what is the absenteeism of staff members in the company? The average absenteeism figure in Ireland is around 3.8% per year, for small firms it is around 3.1% and for medium firms it is 4.9% per year. If your company’s absenteeism figure is above the national average you could be losing money and you need to find out why this is happening and what could be done about it to bring it down to at least the average absenteeism figure. Of course the size of the company, what segment it operates in and where it is based all can influence key HR figures.
Other key HR figures which need to be reviewed are: –
Staff turnover – How many staff members have left the company in the last year, either voluntary of involuntary? If too many people leave the company voluntarily this could lead to extra cost of new hires. A figure of around 5% staff turnover is normal and zero percent of staff turnover might look good but could lead to serious problems in time. A company needs to have some staff turnover to remain healthy.
Recruitment Time – How many days does it take to recruit a new staff member? The recruitment time is from the moment that the decision has been taken to hire a new recruit to the day that the new employee starts. If it takes too long to hire a new staff member this could lead to work not being done or extra overtime which can be a cost.
Overtime – Number of hours overtime used by the company. This could indicate how efficient the company is run; a high rate of overtime could indicate that there are serious inefficiencies which need to be addressed.
Training Days – The number of training days the company uses on a yearly basis. The nature of the company has an influence on the number of training days needed. For instance an IT company would normally have a greater number of training days.
Gender Balance – What is the gender balance in the company? How many men and women are working in the company?
Age Build Up – What is the age profile of the employees of the company? A healthy company has a balanced age profile.
Part time – Full time Ratio – How many part timers and how many full time employees are working in the company?
Education Ratio – what is the highest education level of the employees? This can be important if the company needs to be able to further develop or has to tackle serious issues.
Indirect vs. Direct Labour Ratio – How do the number of managers, supervisors and non production staff members compare to the total number of production staff members. Again this can indicate how efficient the organisation is organised.
Performance Ratings – What is the performance rating of the employees? How many employees got a below average rating and how many employees got an excellent rating. Furthermore what did the company do with the below average employees and excellent employees.
The list of key HR figures is not complete and can change from company to company. However the HR analysis will give your company important information on areas on which the company needs to focus on in order to improve their organisation and become more efficient and cost effective, something we all want to achieve.