WinningKPI - HR - KPI for Measuring of HR Department Cost per FTE posted in category HR KPI details: Details:
This indicator is for measuring the cost of the HR Department per FTE. It is calculated by dividing the Total Cost of the HR Department by the Total number of FTE.
Companies may use this KPI when looking at company costs such as the budget allocation, cost per employee, administration costs etc.
However, minimising the HR Department Cost per FTE is not often advised, as a strong HR Department delivers a great management of payroll, L&D;, policies, employee motivation etc.
This KPI can be joined with the Ratio High Performance vs. Low performance Employees KPI, % of New Hires Achieving 12 Months Service etc., and if measured over time, it could show if changes in the HR Department Cost leads to changes in these other KPIS.
For example, if the company increased the HR Department Cost by employing a new L&D; manager, the company may look at staff training KPIs after a year of employment, and assess the impact that the manager (and the cost of employing the manager) has had on staff training processes.
Formula:
Total HR Department Costs / Total Number of FTE
KPI Unit: money
KPI Time Frame: update annually
Posted by Oana Boteanu | Help to protect community: Flag for moderation
Ideas suggested by WinningKPI community:Here are comments:
I work for the HR department in a service company and we currently had 2 members of the team laid off. The reason was that the company was facing a low profit phase and the leadership team identified that the HR department cost per FTE was too high.
Our HR budget, for salaries and any other costs was of a total of $10 000 per month. For a total of 300 employees, this averaged at:
10 000 / 300 = $33 per employee per month
Having reducing the team by 2 members the cost went down to $7500 a month, hence the overall cost per FTE dropped to:
7500 / 298 = $25 per employee per month
Oana Boteanu | September 9, 2012 at 6:16 am
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