Introduction to Human Resource Analytics

12 11 2012

Human Resource analytics do not require an advanced degree in mathematics, economics or statistics. Any operations, HR or business management professional can become an expert in their client or companies people based metrics. Just tracking and reviewing some of these metrics is often all the evidence you need to prove or quantify what you already knew about operations, recruitment, benefits and organizational development.

Lets take a look at a simple broad metric, Revenue Per Employee (“RPE”).  So compare two similar companies with similar workforces but one has double the revenue per employee. It paints a very different picture of productivity, profitability and compensation at these companies. Based on economic theory and my understanding of scalability, software and manufacturing companies would lead the pack here when it comes to RPE. This is likely due to scalability and the nature of their industry and products. The RPE laggards on the list should be food and professional services (low-tech). The implication is that these low RPE companies and industries often need twice or three times as many employees to produce the same revenue as the higher RPE companies.

A later post will delve deeper into an industry comparison of data I gathered from fast growing Oregon businesses across several industries.

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