CHRP HR Metrics and Financials 3 — Questions and Answers
Question 1: Revenue per employee is $250,000 and total compensation cost per employee is $50,000. What does the compensation-to-revenue ratio equal?
- 5%
- 10%
- 20% (Correct answer)
- 25%
Correct answer: 20%
Compensation-to-revenue ratio = ($50,000 / $250,000) × 100 = 20%.
Question 2: Which absenteeism rate formula is most widely used in HR analytics?
- (Days absent / Days scheduled) × 100 (Correct answer)
- (Days present / Days scheduled) × 100
- (Sick days / Total employees) × 100
- (Absences / Total shifts) × 100
Correct answer: (Days absent / Days scheduled) × 100
The standard absenteeism rate = (total days absent / total scheduled workdays) × 100.
Question 3: In workforce planning, a labor demand forecast that uses regression analysis is primarily based on:
- Manager opinions and judgment
- Statistical relationships between business drivers and staffing needs (Correct answer)
- Prior year headcount plus attrition
- Industry benchmarking data alone
Correct answer: Statistical relationships between business drivers and staffing needs
Regression analysis identifies statistical relationships between business variables (e.g., sales volume) and required staffing levels.
Question 4: A training program costs $50,000 and generates $200,000 in measurable productivity gains. What is the training ROI?
- 25%
- 75%
- 300% (Correct answer)
- 400%
Correct answer: 300%
Training ROI = ((Benefits − Costs) / Costs) × 100 = (($200,000 − $50,000) / $50,000) × 100 = 300%.
Question 5: Which metric measures the percentage of open positions filled by internal candidates?
- Promotion rate
- Internal fill rate (Correct answer)
- Succession depth ratio
- Lateral mobility index
Correct answer: Internal fill rate
Internal fill rate measures what proportion of job openings are filled through internal mobility rather than external hiring.
Question 6: An organization's benefits expense as a percentage of total compensation is 32%. If total compensation is $10 million, what is the benefits spend?
- $2.4 million
- $3.2 million (Correct answer)
- $4.0 million
- $6.8 million
Correct answer: $3.2 million
$10,000,000 × 0.32 = $3,200,000 in benefits expenditure.
Question 7: Which approach to HR budgeting starts from the prior year's budget and adjusts for expected changes?
- Zero-based budgeting
- Activity-based budgeting
- Incremental budgeting (Correct answer)
- Rolling budget forecasting
Correct answer: Incremental budgeting
Incremental budgeting uses the prior period's budget as a baseline and adjusts it upward or downward for anticipated changes.
CHRP HR Metrics and Financials 3
Revenue per employee is $250,000 and total compensation cost per employee is $50,000.
What does the compensation-to-revenue ratio equal?