HR Expense per Employee
This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring HR Expense per Employee. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.
What is HR Expense per Employee?
The total expense incurred by the Human Resources (HR) Department expense divided by the total number of employees working for the organization over the same period of time. Total HR expense includes labor, technology and other overhead costs related to recruiting, hiring, employee relations, compensation and benefits management/administration, payroll processing, training and development, and strategic human capital management operations.
Why should HR Expense per Employee be measured?
Human Resources (HR) Expense per Employee measures HR spending on a per employee basis (i.e., average cost per employee). A relatively high value for this metric (i.e., higher than the average or median benchmark) may be related to ineffective recruiting processes, high employee turnover rates (which, in turn, increase recruiting, hiring and training costs), highly manual HR processes, and/or a general lack of discipline and productivity within HR operations. While a relatively low value for this metric is preferred, this should also be balanced with the risk inherent in managing human capital, the effectiveness of employee training programs, and the overall level of service being provided to the company's employees. Poor HR performance may shed negative light on the company's human capital management practices, and can adversely impact employee satisfaction and turnover rates.
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