HR Metrics Don’t Equal a Seat at the Table

SHRM Issues Cost Per Hire Scorecard.  Is it Important?

Earlier last week, the Society for Human Resources Management (SHRM) unveiled their first human resources metric reporting standard providing a meaty analysis and explanation in 40 plus pages of bedtime reading sure to cure my recent battle with insomnia.  (enjoy it here)  Essentially, the SHRM professional task force is working with the American National Standards Institute to create some consistency among the willy-nilly human resources  measurement scorecard and HR metrics present in our industry today.

The SHRM task force spent in excess of two years and counting developing some consistency around HR measurements and analytics like cost per hire, turnover, training costs, and terminations rates.  However, in that same time period the average HR person’s workload has likely doubled or tripled as companies continued to cut costs in non-income generating departments like human resources.  And so last week, the task force unveiled their first HR scorecard standard: cost per hire.

Metrics That Matter? Understanding the New Cost Per Hire Formula

For the human resources manager, the proposed cost per hire standard delivers a formula, provides guidance and defines three different important terms within CPH: internal costs, external costs, and total number of hires.

How They Calculate the Cost per Hire:

Calucalting cost per hire; the new standard of HR metrics

  • External Hires.   A variable cost that evaluates spending outside of the organization during the time period in question.
  • Internal Hires.  A variable costs that includes all internal recruiting costs and expenses during the time period in question.
  • Total Number of Hires.  Includes the total number of hires within a specific time period.  Employee status whether full time or part time is not taken into account as part of this calculation.

More Complicated than Just a Cost Per Hire Calculator

Unfortunately, the average HR manager and recruiter will likely have no idea how to calculate the metric according to the new standard mainly due to the wonders of the internet and Search Engine Optimization.  For example, if I were to Google the keywords “cost per hire standard” there would be only one result for  new SHRM standard.  HR professionals are likely to obtain inaccurate information unless they frequent reputable industry websites like this Blogging4Jobs,, SHRM, and TNLT or their HR Technology analytics tools like Visier, Aquire, and Wanted Analytics.  Educating the HR industry as these new metrics standards are developed will be a process within itself. Good luck!

While the SHRM cost per hire standard  allows for measurement consistency for an industry, it doesn’t solve the bigger problem. HR managers and recruitershave to get out from behind the desk and into the board room or the factory floor where the action is.  It doesn’t matter how many HR Metrics Standards SHRM and the industry has in place.

Recruiting Metrics More than Average Cost per Hire Still Needed by HR

Until an HR professional can read a P&L, openly discuss gaps in a quarterly financial statements or understand how streamlined logistics impacts the success of a new product launch, no amount of fancy HR metrics can buy us things like accountability, business savvy, or respect from our peers and senior leaders in the organizations where we work.  HR’s seat at the table will not be found through a standardization of HR metrics like cost per hire.

Photo Credit SHRM & LearnHR Blog

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Jessica Miller-Merrell

Jessica Miller-Merrell (@jmillermerrell) is a workplace change agent, author and consultant focused on human resources and talent acquisition living in Austin, TX. Recognized by Forbes as a top 50 social media influencer and is a global speaker. She’s the founder of Workology, a workplace HR resource and host of the Workology Podcast.

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