At Dominion, we are dedicated to providing our clients with the most up-to-date and relevant information pertinent to the HR industry. This article was written by Ashley Lipman from On The Clock and was published with their permission.
As a Human Resources professional, your responsibility goes beyond writing policies, managing employee expectations, and advocating for your people. You will have a hand in hiring talent to better the structure of the company, and to do so, you need to know the numbers.
Numbers add important quantitative data to backup decision making when it comes to hiring. While the majority of your decisions will be based on the qualifications of the individual and requirements of the role, knowing the data will help you find the right person for the job. Here are the numbers you need to know:
The Financial Status of the Business
To be able to effectively hire someone to help the company, you need to have an understanding of the financial status. Doing so will help you understand where the company needs the most help and where it’s doing well. It will help you look beyond the scope of a job description and evaluate how a new hire could impact the big picture. This will also help you during salary negotiations, allowing you to identify if someone is worth going beyond your targeted budget or if you should be looking down the line.
Beyond the hiring process, knowing the financial status of the business will help you with other aspects of your role. Tasks such as improving employee engagement, making smart spending decisions within your department, and understanding the business flow are integral skills in Human Resources.
A Human Resources hiring manager needs to comprehend how much work someone is expected to be doing each week. If you are hiring an hourly employee, are there limits to how often they will be scheduled? This is an important part of conversations with people who make their living this way. For salaried employees, do they get compensated for forty hours a week or is there overtime to consider? Perhaps overtime is an expectation of the role.
Calculating the hours of previous employees in the role (learn how here) or estimating based on similar roles and job descriptions, will give you a better idea of how much should be budgeted for this role.
Time to Fill
As a subset to understanding the time commitment of the position, the time to fill is perhaps one of the most important numbers you’ll consider during the hiring process. How long does it take to get a replacement sitting at an open desk? This number is calculated from the moment the position becomes open to the starting day of the new employee. For this number, the smaller, the better.
The hiring process takes away focus from daily activities for both the HR professional and other department employees who are connected to the work. This indirectly has an impact on the company’s productivity and revenue.
Costs of Hiring
The hiring process comes with many costs to consider, such as commissions to a recruiter or the fee for posting on job boards. You must also consider the costs associated with your salary and time spent with the hiring manager screening candidates, conducting interviews, calling for references, etc.
Hiring the wrong candidate has the most substantial costs to the company. A bad hire can cost a company tens of thousands of dollars in lost productivity, additional hiring costs, and in some cases, severance pay. The higher up the bad hire, the more it will end up costing the company. Knowing your numbers as an HR professional will help keep costs low and returns high.
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