HR

Staff Turnover

Staff turnover is bad: employees with know-how leave the company and new hires cost money. On the other hand, there is deliberate staff turnover: employees with a poor track record would rather be replaced by good employees.

However, staff turnover is only an indicator for our KPQ. The KPI says nothing about the reasons for high staff turnover. If staff turnover is too high, we recommend having an employee survey carried out by a third party to get to the bottom of the cause.

Staff Turnover

\[ {Staff Turnover}\,\% = \frac{\# {Leavers\,p.a.}}{\varnothing {Staff Level}} \cdot 100 \]

KPQ: Are we a company where employees enjoy working?

Type: Rate

Unit: none

Variation: $\varnothing {Tenure} = \frac{\varnothing {Staffing Level}}{\# {Leavers\,p.a.}} = \frac{100}{{Staff Turnover\,\%}}$

Scale: $0 - \infty$

Direction: The lower the better

Reference Value: Depending on industry:

Over 60% in the hospitality industry,
in public administration at just under 15%.
On average around 30%.
If the value is < 10%, you should also take a closer look.

Cost per Hire, CPH

\[ \varnothing {CPH} = \frac{\${C}^{hiring}}{{\# FilledPositions}} \]

Whereby:

${CPH}: {Cost\,Per\,Hire}$
$\${C}^{hiring} = \${C}^{internal}+\${C}^{external}$
*$\${C}^{hiring} = {Hiring Cost}$
*$\${C}^{internal} = {Internal Hiring Cost}$
*$\${C}^{external} = {External Hiring Cost}$

The CPH is a common and much-discussed KPI that can be interpreted in different ways. Comparisons between companies are difficult as each company includes different costs. For example, should the time spent on recruitment interviews be included? What about general employer branding costs such as attending a graduate event?

We recommend keeping the definition of costs very narrow and not changing it over time. Ideally, you will find a definition of costs that you can easily determine per position filled. This allows you to analyse the CPH per role, area, seniority and other dimensions. This can be achieved, for example, by

considering only internal costs
estimating an average cost for the dimension(s) you are interested in

For example, for role $r$, you then have the total hiring cost:
$$
${C}^{hiring} = ${C}^{internal} = # {Interviews}{r}\cdot\varnothing{C}}^{interview
$$

So our $CPH$ for role $r$ becomes:

\[ \varnothing {CPH}_r = \frac{\${C}^{internal}_r}{{\# Filled\,Positions}_r} = \frac{\# {Interviews}_{r}}{{\# FilledPositions}_r}\cdot\varnothing{C}_{r}^{interview} = \frac{\varnothing{C}_{r}^{interview}}{{SR}_r} \]

Finally, you could also express the Cost per Hire as a percentage of the base salary. For example:

$$
{CPH}_r\,\% = \frac{\varnothing {CPH}_r}{\varnothing {C}^{salary}_r}
$$
Where $\varnothing {C}^{salary}_r$ is the average base salary paid to role $r$.
The KPI then becomes a ratio that is easier to compare across different economies.

CPH

Name: Cost Per Hire

\[ \varnothing {CPH} = \frac{\${C}^{internal} + \${C}^{external}}{{\# FilledPositions}} \]

KPQs:

How time-consuming is it for us to recruit new staff?
How efficient is our recruitment process?
How difficult is it currently on the market to recruit staff?

Type: Average

Unit: money amount $\varnothing {CPH}$

Variations: ${CPH\,\%}$

Scale: $0 - \infty$

Direction: The lower the better

Reference Value: Depending on industry. For the quote ${CPH\,\%}$, we have

in the hospitality industry: over 60%,
in public administration: as low as under 15%.
on average: around 30%.
if the value is < 10%, you should take a closer look.