.svg){kind=icon}
As you build your HR technology stack, data points and HR metrics seem to be inescapable. Learning to filter these data points to focus on the information that matters most is a skill that QSR leaders need to understand. In a world where you can learn hundreds of facts about your business in a few clicks of a mouse, it’s time to get focused on the metrics that will have the most impact on your business and promote growth in the best way possible.
In this article, we’ll explain the seven HR metrics you need to keep an eye on to run an effective restaurant.
What are HR metrics? Why are they important?
Human resources metrics are key data points that you can track to understand how your company is doing when it comes to the people on your team.
HR has become data-rich with the help of HR technology companies. Your business can now understand how you can best support employees with the click of a mouse instead of shuffling through hundreds of papers or talking with staff members one-on-one.
When armed with the correct information, you can make significant, positive changes at work.
7 HR metrics top QSR brands must measure
While you might have access to hundreds of metrics as operations director or hiring manager, you should pare down what you measure and focus on. Let's cover the seven HR metrics your QSR brand needs to measure and report on often.
1. Cost per hire
One of the first metrics restaurants should track is cost per hire. Hiring is expensive, especially because turnover in the food service industry is much higher than in most industries. If you can lower your cost per hire, you can keep up with turnover numbers while keeping your personnel expenses in check.
When examining your cost per hire, you are trying to find a sweet spot between high-quality and low-cost candidates. Where are you finding your best, long-standing employees? Where do you find employees who require the least upfront cost?
For example, you might find that your highest quality employees come from referrals, social media, and a job board you enjoy. Hopefully, those strategies are also cost-effective for your company. If they are, continue to invest in those recruitment strategies.
By diving into the HR data your company has, you should find a happy medium to invest your hiring dollars.
2. Employee retention rate
After you determine your cost per hire, it’s time to turn your attention to employee retention rate. Keeping your employees longer makes a huge difference. It’s hard to grow your business if you are consistently backfilling positions you have already hired for.
When you track this HR KPI, you have to think about two types of employee retention:
- New hire turnover: Employees who decide to leave shortly after joining the company (you can set the timeline for this, a typical timeline is within 3-6 months after being hired.)
- Voluntary turnover: Any voluntary separation from your organization after the new hire turnover timeline you set.
Tracking both new hire and voluntary turnover can help you better manage your roster. Once you have this information, you can better understand the likelihood of a team member staying on board. Companies who understand this HR metric can also find ways to improve their retention rate by conducting stay and exit interviews with employees.
3. Absence rate
Absenteeism causes a domino effect in the restaurant industry. Frequent absenteeism can burnout your loyal employees, make them more likely to call out or even make them leave your organization. Employees who are frequently absent become lackluster team members, and they may struggle to keep up with tasks while working.
When calculating absenteeism at work, it’s essential to break your absences into several categories:
- Excused absences: Absences covered by a doctor’s visit, jury duty or some other valid excuse. The employee and manager also agreed upon these absences.
- Unexcused absences: Absences that were not covered by an excuse but were agreed upon by the employee and manager.
- No call/No shows: Absences that were not planned or agreed upon by the employee and manager.
- Planned absences: Vacations, while not a genuine absence, need to be monitored so you can ensure you have sufficient staff to cover someone leaving for a few days or a week.
Once you understand the flow of your absences, you can develop creative solutions to make sure that your team feels supported. For example, some companies have a standby pool of workers they can call to cover absences if they need the extra help.
4. Cost of overtime
Overtime can be a drain on your expenses. You need to pay time and a half for any overtime you elect to give an employee most of the time. If you know overtime will continue to be necessary, it might make more financial sense to hire another employee to cover the hours.
If you pay any group of employees more than 27 hours in overtime a week, it may make more sense to pay an employee for 40 hours of regular work. This is because if someone works 27 hours of overtime, you will pay them for 40.5 hours of work due to time and a half laws.
Look at the trends in overtime at your company. Are you consistently having employees work several hours of overtime every week? How much does your employee benefits package cost? Do the math so you can see if it’s worth it to keep offering overtime or increase the size of your team.
5. Workforce demographics
Creating equity at work starts with understanding the demographics of your workforce. Understanding demographics like gender, race, pay, department, age, disability, veteran status, etc., can make a world of difference. By gathering this information, you can make more informed decisions about pay gaps or benefits you should offer employees.
HR leaders need to understand the demographics of their workforce to make sure that employees are represented appropriately and working in an environment that serves them. The small actions of making sure that women are adequately paid or that older employees can thrive at your store make your company a better place to work.
6. Employee engagement
Keeping employees engaged helps you improve employee retention dramatically. If you aren’t keeping up with engagement, it’s simpler than you think.
First, you’ll want to pick a strategy for understanding employee engagement. Some companies use Gallup’s Q12 survey, while others use eNPS to calculate workplace engagement. Whichever method you choose, stick with it, so it’s easy to understand and take action on.
Once you receive feedback from employees, tackle the lowest scoring items or the concepts employees talk about most before doing anything else. Addressing the most critical issues will help you take action on the HR metrics you get from this survey.
7. Rehire/Boomerang rate
When hiring in a small market, you have to find new ways to hire. For example, we believe that every QSR needs an internal hiring strategy. Another strategy you need to develop is a rehire or boomerang employee strategy.
Sometimes stellar employees leave your organization to pursue other career opportunities, but they don’t have to be ex-employees forever. Boomerang hires know a lot about your organization, and they can be the perfect addition to your roster. Creating a strategy that helps you appeal to past employees and bring them back on board is crucial to your restaurant's local success.
Start tracking the amount of rehires you make. How are you reengaging with these past employees? When you can track this information, you can strategically find and rehire more past employees.
Conclusion: Creating productive QSR employees by using HR metrics
Are you ready to create a workplace where restaurant employees can thrive? You will have all the information you need to create an environment that employees are delighted to work in by tracking HR metrics.
Once you track the data, make sure you spend time acting on it. Observe the data? Are there 2-3 tweaks you can make that will immediately improve your team's experience at work? Your job as a manager is to observe what could help your team thrive and commit to getting it done.
