HR Metrics and Financials Flashcards

A company has 500 employees and 50 voluntary separations in a year. What is the voluntary turnover rate?

Answer: 10%

Voluntary turnover rate = (voluntary separations / average headcount) × 100 = (50/500) × 100 = 10%.

Which metric best captures the financial impact of replacing an employee who earns $60,000 annually, if replacement cost is estimated at 50% of salary?

Answer: $30,000

Replacement cost at 50% of a $60,000 salary equals $30,000 per departing employee.

When calculating cost-per-hire, which of the following is NOT typically included?

Answer: New hire's first-year salary

Cost-per-hire includes recruiting expenses, not the ongoing salary of the hired employee.

An HR dashboard shows 'time-to-productivity' averaging 90 days. This metric primarily measures:

Answer: How quickly new hires reach full performance

Time-to-productivity measures how long it takes a new hire to reach the expected performance level for their role.

Which formula correctly calculates Human Capital ROI?

Answer: (Revenue − Operating Expenses + Compensation) / Compensation

Human Capital ROI = (Revenue − Operating Expenses + Compensation) / Compensation, isolating the return generated per dollar of compensation.

A benefits cost analysis shows that health insurance costs rose from $4,000 to $4,600 per employee. What is the percentage increase?

Answer: 15%

Percentage increase = (($4,600 − $4,000) / $4,000) × 100 = 15%.

Which HR metric would best help an organization evaluate whether its compensation structure is competitive?

Answer: Compa-ratio

Compa-ratio compares an employee's actual pay to the midpoint of the salary range, indicating external competitiveness.