Appendix A
Formula Sheet
HR Metrics and Formulas
Talent Acquisition and Retention
| Measure | Formula |
|---|---|
| Turnover rate | Separations ÷ average headcount × 100 |
| Average headcount | (Beginning headcount + ending headcount) ÷ 2 |
| Retention rate | Employees who stayed the whole period ÷ employees at the start × 100 |
| First-year turnover | New hires who left within 1 year ÷ total new hires × 100 |
| Absence rate | Days absent ÷ (average employees × workdays) × 100 |
| Vacancy rate | Open positions ÷ (filled + open positions) × 100 |
| Cost per hire | (External costs + internal costs) ÷ number of hires |
| Yield ratio | Candidates advancing to the next stage ÷ candidates at the prior stage × 100 |
| Selection ratio | Number hired ÷ number of applicants |
| Offer acceptance rate | Offers accepted ÷ offers extended × 100 |
| Adverse impact (4/5ths rule) | Selection rate = hired ÷ applicants for each group. Impact ratio = lower rate ÷ highest rate. Below 0.80 (80%) indicates adverse impact. |
Compensation and Benefits
| Measure | Formula |
|---|---|
| Compa-ratio | Employee pay ÷ range midpoint |
| Range midpoint | (Minimum + maximum) ÷ 2 |
| Range spread | (Maximum − minimum) ÷ minimum × 100 |
| Range penetration | (Pay − minimum) ÷ (maximum − minimum) × 100 |
| Overtime pay (FLSA) | Regular rate × 1.5 × hours over 40 in the workweek |
Training and Development
| Measure | Formula |
|---|---|
| ROI | (Benefit − cost) ÷ cost × 100 |
| Training ROI (Phillips Level 5) | (Monetary program benefits − program costs) ÷ program costs × 100 |
Finance and Business Operations
| Measure | Formula |
|---|---|
| Profit margin | Net income ÷ revenue × 100 |
| Accounting equation | Assets = Liabilities + Equity |
| Current ratio | Current assets ÷ current liabilities |
| Debt-to-equity | Total liabilities ÷ shareholders' equity |
| Earnings per share | (Net income − preferred dividends) ÷ average outstanding shares |
| Revenue per employee | Revenue ÷ FTEs |
| Human capital ROI | [Revenue − (Operating expenses − Employee costs)] ÷ Employee costs |
| Human capital value added | [Revenue − (Operating expenses − Employee costs)] ÷ FTEs |
| HR-to-employee ratio | HR FTEs ÷ total FTEs × 100 |
| Annualized loss expectancy | Single loss expectancy × annualized rate of occurrence |
| Mean / median / mode | Average / middle value of sorted data / most frequent value |
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