The Key Employee Benefits Metrics Canadian Leaders Must Track in 2024
HR metrics and analytics have become critical tools for driving business success in today's data-driven world. As the famous saying goes, "what gets measured gets managed." Tracking key HR metrics provides valuable insights into the health, productivity, and performance of your workforce. Leveraging these insights allows you to make smarter, more strategic decisions about your people and processes.
In this article, we'll explore some of the most important HR metrics to focus on as a Canadian business leader. These include turnover, retention, employee satisfaction, engagement, recruiting metrics, learning and development, diversity and inclusion, absence rates, overtime rates, and benefits costs. Properly tracking and analyzing these metrics can spotlight trends, issues, and opportunities to enhance your workforce. We'll provide tips on how to turn the insights gleaned from HR analytics into concrete actions and data-driven decisions that boost employee satisfaction, retention, and business performance.
Turnover and Retention Rates
Turnover rate measures how many employees leave a company over a set period, usually annually. It is calculated as the number of separations divided by the average number of employees over the period (Mercer, 2023). Retention rate is the opposite - it shows how many employees stay. High turnover indicates an organization is losing talent, which has costs.
In Canada, average voluntary turnover rose to 15.5% in 2023, up from 12.4% in 2022 according to Mercer's survey. Turnover rates vary widely by industry. For example, retail and hospitality see turnover around 25-30%, while professional services and IT are around 10-15% (Mercer, 2023).
High turnover impacts productivity as new hires take time to get up to speed. There are also tangible costs like recruiting, onboarding and training. Losing top performers means losing organizational knowledge. Reducing turnover by just a few percentage points can yield significant savings and performance gains (HRPA, 2024).
Employee Satisfaction
Employee satisfaction is a critical metric for organizations to track. It measures how content and fulfilled employees are in their roles. Satisfaction is typically measured through employee surveys that gauge satisfaction with elements like compensation, benefits, work-life balance, job responsibilities, career growth opportunities, management, and company culture.
Key drivers of employee satisfaction include:
Competitive pay and benefits
Opportunities for career development and learning
Supportive and effective leadership
Flexibility and work-life balance
Empowerment and autonomy
When employees are highly satisfied, they tend to be more engaged, motivated, and committed to the organization. Satisfied employees also have higher productivity and performance. Additionally, satisfaction is linked to talent retention - dissatisfied employees are more likely to quit. Tracking satisfaction metrics over time allows organizations to identify problem areas and implement changes to improve the employee experience.
Employee Engagement
Employee engagement refers to the emotional commitment employees have to their organization and its goals. Engaged employees feel passionate about their jobs and are willing to go the extra mile for their employer (Gallup, 2023). Engagement is typically measured through employee surveys that gauge satisfaction, advocacy, pride, and discretionary effort. According to Gallup's most recent State of the Global Workplace report, only 15% of employees worldwide are engaged at work.
High employee engagement has been clearly linked to higher productivity. Gallup found that business units in the top quartile for engagement had 17% higher productivity compared to those in the bottom quartile (Gallup, 2023). More engaged teams also have higher sales, better safety records, and lower absenteeism. The Impact of Employee Engagement on Productivity report showed that engaged employees are more focused, motivated, and invested in their work, leading to higher quality outputs.
There are several best practices organizations can follow to improve engagement: setting clear expectations, empowering employees, offering development opportunities, recognizing strong performance, building trust with leadership, fostering collaboration and teamwork, and gathering regular feedback. Taking a strategic, concerted effort to boost engagement across the employee lifecycle is key to realizing the productivity gains.
Recruiting Metrics
Two key recruiting metrics that provide valuable insights are time-to-fill and cost-per-hire. Time-to-fill measures the average number of days between posting a job and making an offer to a candidate. The typical time-to-fill in 2022 was around 44 days across industries, reaching an all-time high according to one report. Cost-per-hire tracks the average total spending on recruiting per filled position.
Tracking these metrics over time and benchmarking against industry averages can help identify opportunities to improve your recruiting funnel. For example, a rising time-to-fill could indicate problems attracting enough qualified applicants. You can then adjust job postings, beef up sourcing channels, or offer more competitive compensation. A high cost-per-hire may signal excessive spending on job board ads or agency fees. This could prompt you to invest more in your careers site, employee referrals program, or recruitment marketing.
Strong recruiting has ripple effects throughout the organization. Shortening time-to-fill reduces candidate drop-off and improves quality of hire. Controlling cost-per-hire frees up budget for other investments. Most importantly, hiring the right people ultimately boosts retention, performance, and business results.
Learning and Development
Tracking key learning and development (L&D) metrics provides insight into the effectiveness of training programs and opportunities for employees to build skills. Two metrics to follow are training hours per employee and ROI from learning programs.
According to the 2022 Training Industry Report, employees received an average of 62.4 hours of training in 2021, down slightly from 64 hours in 2020. Mid-size companies provided the most training at 71 hours per employee. Assessing training hours shows whether employees are getting sufficient development opportunities.
Calculating ROI on learning programs helps determine if money spent is generating worthwhile returns. One model divides program benefits like increased productivity by program costs. Positive ROI indicates training is a sound investment. If ROI is low, evaluating program relevance and delivery format can identify improvements.
L&D also plays a key role in upskilling and reskilling employees to perform new roles. Investing in workers' growth shows commitment and can improve retention. HR should track participation in upskilling programs and resultant promotions or role changes. This demonstrates whether upskilling initiatives are achieving talent mobility goals.
Diversity, Equity and Inclusion
Diversity, equity, and inclusion (DEI) metrics provide insights into the representation and experiences of different demographic groups within your organization. Tracking metrics around factors like gender, race, age, disability status, and more at various levels of your company can reveal gaps and opportunities for improvement.
There is a clear business case for prioritizing DEI. According to a study from Achievers, companies with greater diversity and inclusion see benefits like a larger talent pool, increased employee engagement and trust, and new perspectives that spark innovation. Diverse teams make better decisions 87% of the time compared to more homogeneous teams, according to research from Boston Consulting Group.
Some examples of DEI metrics to track include:
Representation at different levels (entry-level, management, executive)
Promotion and attrition rates by demographic group
Pay equity
Inclusion index from engagement surveys
Representation in high-potential programs
Analyzing this data can help spot roadblocks to advancement and retention for underrepresented groups. Companies can then implement targeted programs and policies like mentoring initiatives, anti-bias training, and improved family leave and flexibility options. The goal is to create a truly inclusive culture where employees of all backgrounds feel welcomed, valued and able to thrive.
Absence and Overtime
Tracking absenteeism and overtime rates is critical for controlling unnecessary costs. According to Statistics Canada, the average number of paid sick days taken per full-time employee in 2021 was 7.7 days. This figure can be benchmarked against your industry averages. For example, public administration had the highest absenteeism in 2021 at 12.2 days, while agriculture had the lowest at 3.6 days.
Steps to reduce unnecessary absenteeism include having clear sick day policies, tracking absenteeism rates by department or manager, and addressing any trends through training or coaching. It's also important to promote a culture that doesn't penalize legitimate sick days while discouraging abuse of the system.
Overtime rates should also be monitored to ensure teams are adequately staffed for their workloads. While occasional overtime may be unavoidable, consistently high overtime costs could indicate larger issues with workload distribution, capacity planning, or productivity.
Benefits Costs
Benefits are a significant cost for employers, averaging 15-30% of payroll at most companies in Canada according to experts. Analyzing your benefits spending per employee and as a percentage of payroll is important to ensure these costs don't spiral out of control. Look at your monthly benefits invoice and calculate an average cost per employee. Benchmark against industry surveys or competitors to see if your spending is in line. If your benefits costs seem high, explore strategies like:
Increasing employee premium contributions through cost-sharing
Switching to lower cost benefit plans while maintaining competitiveness
Renegotiating rates with your benefits providers
Reducing benefits costs by improving workforce health through wellness programs
While controlling costs, don't cut back too far or you risk damaging employee satisfaction and retention. With the median family in Canada paying $14,474 annually for health benefits, benefits remain an important part of the total rewards package for attracting and retaining top talent.
Building a Data-Driven Culture
Creating a culture that embraces data and analytics is critical for leveraging HR metrics to drive better business outcomes. Here are some tips for fostering data-driven decision making in your organization:
Get leadership buy-in by connecting workforce analytics to business goals like improved retention, productivity, and profitability. Demonstrate how data can inform better talent strategies and people decisions. Executives and managers must be onboard for lasting cultural change.
Train managers and team leaders on interpreting and applying data through workshops or e-learning modules. Clearly explain what metrics mean and how they should factor into decisions. Provide resources and support to build analytics skills.
Implement HRIS, analytics, and dashboard tools to collect data and surface insights automatically. Streamline reporting to make metrics readily available. Document processes for regularly reviewing and discussing metrics.
Communicate metrics, trends, and insights through all-hands meetings, newsletters, intranet dashboards, and team huddles. Celebrate wins driven by data. Encourage open conversations about what the numbers mean. Transparency is key.