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How to Measure Key Metrics of Total Rewards

Total Rewards is an effective and competitive program that assists companies to attract, retain, and keep the best talents motivated. The program’s strategy should fit into the company’s environment and match its objectives. The metrics used accurately can even help you save costs and thereby give HR even more kudos from the C-level. Below are the key Total Rewards metrics seen in action.

Total Rewards is an effective and competitive program that assists companies to attract, retain, and keep the best talents motivated.

The program’s strategy should fit into the company’s environment and match its objectives. The metrics used accurately can even help you save costs and thereby give HR even more kudos from the C-level. Below are the key Total Rewards metrics seen in action.

1. Employee Turnover – Percentage of Workers Who Leave a Company
The turnover rate can be measured on the company level, as well as within departments, positions, managers, grades, regions, reasons, performance ratings, tenure (trial period, first 3–6 months, first year and beyond), and more.

Using this metric, you can:

  • Calculate the cost of employee attrition and determine whether it is adequate
  • Measure employee retention (competitiveness of the compensation package, motivation programs, grading, career growth)
  • Develop a staffing plan, calculate costs of hiring, resources for recruitment, adaptation, training, and development of people
  • Identify weak points in the management of employees’ performance
  • Find out the real reasons why people leave their jobs and company

Example of Metric in Action
In one company, we tracked employee turnover for several years and noticed that it was high in one of the regions. The local team always had conflicts and a low productivity rate.

By analyzing attrition reasons, it became clear that the team lead was actually to blame. Thanks to anonymous exit interviews and conversations with the manager, we found out that people were leaving due to unclear goals and incompetent management. The local team leader was moved to another region, upgraded their team management skills and it worked – attrition rate was reduced.

In another company, we noticed that the marketing team was regularly losing talents within the first year of employment. People quit because there were no opportunities for career growth. The reason was that the manager had a tendency to hire ambitious employees, with strong competencies. Indeed, they had no chances to move forward.

We recommended to slightly lower the requirements for the candidate’s CV and the turnover rate decreased as well.

2. Staffing Level – Ratio of Employees in Staff Plan and Actual Number
This metric indicates the number of employees in the staff plan, the actual staffing, and the percentage of vacant positions.

Example of Metric in Action
If the staffing rate is stably 80–90%, you need to figure out what jobs are unoccupied and why.

Discuss with managers whether all positions are required. It may happen that managers open additional vacancies in their organization structure and do not intentionally close them to show cost-savings in the department.

In retail and HoReCa, where it is tricky to fill vacancies, the staffing ratio directly affects business efficiency. If you want the restaurant to be staffed 100%, and its personnel is 50% staffed, it will not cope.

You need to figure out why talents weren’t hired, whether the requirements were too high, or the salaries were too low.

3. Satisfaction Level With Job and Comfort in a Company
To define the level of employees’ satisfaction with their job, it is better to ask them directly. The most popular subject for discussion is satisfaction with the compensation package. Learn what employees think about their salaries, perks, and bonuses and whether their quality and level are good enough. But there are also more complex surveys.

For example, to find out the level of satisfaction of a team with their medical insurance, you may use a survey before and after the introduction of this benefit or quarterly monitor the dynamics.

If you want to introduce new benefits and do not know which are better, ask your employees. People always know what they want and help to improve internal perks programs.

Example of Metric in Action
We measure satisfaction not only with Total Rewards but with the overall HR services.

We ask questions on different matters. Whether it’s easy to adapt to work, how satisfied people are with the offered equipment and workplace. Upon all, it is crucial to learn how well employees collaborate with colleagues and direct manager.

4. Career Growth – Vertical & Horizontal Promotion
This metric shows the possibility of promotion within the company, namely the vertical and horizontal career growth opportunities.

Example of Metric in Action
We saw that employees lacked career growth, which became the top reason why people were leaving.

We introduced leveling, which implied developing a career matrix, evaluating developers’ skill levels according to this methodology, and creating individual development plans.

If the reason for employee turnover is lack of career opportunities within the organization, development programs can improve the situation.

The essential thing is to understand how quickly an employee should get promoted. For example, to become a senior specialist, a middle one needs to work on average for two years. If someone has been working for three years and more on the same level of position, you might have missed the moment to promote this person and there is a risk that competitors will poach them.

5. Average Tenure Within a Job / Company – Period for Which Employee Stays in the Company

There are two compelling indicators to measure here:

  • Tenure of active (working) employees allows you to evaluate the competitiveness of the compensation package, the effectiveness of motivational programs, grading, managing teams, and career growth.
  • Tenure at the time of dismissal allows you to predict when a person is close to quitting. If some people tend to leave a job after a year, calculate the average length of time to notice the risky moments in advance. After – launch retention programs or start looking for a replacement.

Both indicators are best analyzed together and in the context of positions, grades, technologies, departments, and regions.

Example of Metric in Action
Having analyzed attrition reasons and tenure within terminated people, in one company, we noticed that Junior level specialists were quitting on average after a year of employment due to the absence of career opportunities.

We took a more precise view of this problem, created a career matrix for becoming a middle specialist, implemented development plans, and twice a year assessments. This gave an opportunity not only to decrease attrition but to get in place more motivated people who brought the company brighter results.

Anastasiia Osypova, Head of People, Engagement & Culture – Innovecs

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