Understanding HR reporting

What is HR reporting?

HR reporting tracks vital workforce metrics, typically facilitated by HR software such as human resources information systems (HRIS). Beyond data collection and measurement, the systems empower HR teams to handle daily tasks related to payroll, benefits and other HR reporting–related transactions. 

HR reports offer insights into various data points, such as comparing full-time and part-time employees, gender distribution in the workforce, employee turnover rates, job vacancies and the time it takes to make new hires. To conduct HR reporting, businesses can use basic tools such as Excel spreadsheets or work with a vendor that specializes in managing HR data. [Read related article: How to Utilize Big Data for Human Resources] 

“In essence, the more data you’ve got, the more accuracy you can have and the more insight into making strategic plans,” said Richard des Moulins, founder and CEO of Rockcrest. Efficient HR reporting can also help reduce costly mistakes, he added. “Accurate reporting reduces bad decision-making, and bad decisions can cost businesses a lot of money,” he said. 

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What types of HR reports and metrics should you monitor?

Several HR metrics, when juxtaposed with other data points, provide comprehensive insights, aiding in the analysis of historical trends. Consistent HR reporting on employee retention, for instance, can spotlight areas that need improvement within the organization. 

Using HR reporting to understand what employees want out of their employee experience can make a big difference in preventing costly employee turnover, advised Kenny Latimer, director of product marketing at BambooHR. “The cost of actually bringing somebody on and training them and onboarding them and getting them up to speed in a position is far greater than just the cost of ensuring you retain that talent,” Latimer said. “So there is the cost savings that comes from having that knowledge and understanding the levers to pull in order to help these employees stay and have a great experience.”

Here are four key types of HR reports you should track, and the key metrics they consist of.

1. Recruiting report 

HR reporting on the recruiting process is essential when hiring or planning to hire new employees. Assessing the success of your recruitment strategies can expedite the process and ensure the best fit for each role. “Quite often there’s a lot of reporting around the recruiting department,” des Moulins said. “How many positions do we have open? How long does it take for us to fill a position? How much does it cost per hire? Who are my top recruiters and who are my poor-performing recruiters? And what are the top-performing recruiters doing differently than the poor-performing recruiters?”

Key metrics for this report include:

• Function type. This metric categorizes various roles within a company, considering departments and geographical regions.
• Open positions and new hires. These metrics show the number or percentage of open positions you currently have, as well as how many employees joined the organization within the past year.
• Time to fill vacancies. This metric, also known as “average time to hire,” evaluates the duration from job requisition approval to offer acceptance, reflecting the efficiency of the recruitment process.

• Recruitment costs. This accounts for the expenses incurred on external staffing agencies, job advertisements and productivity losses. Analyzing cost per hire for different roles can pinpoint areas of efficiency and those that need improvement.
• Recruiting conversion rate. This metric evaluates the success rate of converting job applicants into employees. Analyzing this shows you how successful your recruitment efforts are.

2. Performance-management report 

Managing employee performance is critical to the success of your business. HR reporting can provide insights into your employees’ performances and areas that need additional training. “These kinds of analytic tools are there to be able to take away the subjectivity of how your team members are doing and put that into data terms,” said David Lewis, national managing director of HR consulting for Gallagher.

Since data points that measure success will vary depending on the industry, company and position, companies can use an HRIS system to choose key performance metrics from a wide variety of options and customize data reports to best fit their needs, Lewis said. “It’s kind of like walking into a buffet that’s the size of half a football field,” Lewis said. “You’re just identifying in your buffet what exactly it is that you think would be of value to measure all of these things.”

Some key metrics include:

• Training costs. This encompasses expenses related to employee training, including travel and material costs.
• Productivity reports. These metrics evaluate individual employee productivity, and they can be extended to business productivity across teams or departments.
• Engagement and satisfaction reports. These metrics gauge employee engagement levels. Having an engaged workforce is an indicator that you have a healthy work culture. It can also help increase employee retention.
• Employee absenteeism rate. This shows the average percentage of time or days employees were absent in the previous period.

3. HR administrative report 

Administrative reports offer a holistic view of the company. Key metrics include:

• Active employees. This metric reflects the current number of full-time and part-time employees.
• Full-time equivalent (FTE). This metric converts part-time employee hours into full-time metrics. On an annual basis, an FTE is equivalent to 2,080 hours, which equates to eight hours per day for five workdays per week.
• Male-to-female ratio. This metric helps address pay disparities and potential healthcare cost issues.
• Education level. This evaluates employee qualifications and the percentage of the workforce with advanced degrees.
• Turnover rate. This HR reporting metric represents the percentage of employees leaving the company for various reasons, including voluntary exits, terminations and retirements.

4. Compensation report 

A compensation report is essential for businesses to understand how much they spend on their employees. When compiling compensation reports, look at the following metrics:

• Employee pay. This encompasses various data points, such as base salary, overtime pay, paid time off (PTO), payroll deductions and additional incentives.
• Cost of absence. This metric primarily focuses on unscheduled absenteeism, which is essential to uncovering one of the most expensive unseen costs in the workplace.
• Cost of labor. This represents the total cost of employee compensation, including wages, benefits and employer-paid payroll taxes.

These are just some of the more common HR metrics that can provide you with a better understanding of how your organization is performing compared with the competition. The reports can run the gamut from tracking basic data points such as attendance to measuring data to help with decisions around diversity and engagement. 

“You’re getting these workforce understandings and analytics at even the basic level of, ‘What is my workforce, what is it comprised of?’ and the behavior of my workforce,” Latimer said. “And then you start to get into reports that get more strategic, more insightful for making decisions … understanding the pulse of the organization and how things are operating.”

What are the benefits of HR reporting?

There are numerous benefits to HR reporting, and they can significantly impact your organization’s overall performance and strategic decision-making. “The more advanced the analytics, the more insight the managers have into what’s really going on,” des Moulins said. “If you have a company of 100 employees, who are your top performers? Who are the people who are calling in sick the most? Or who are the most unproductive? This is where it really gives some insight.”

Some key benefits include:

• Strategy development and alignment. Each year, companies develop new strategies and projections, and businesses need to assess HR metrics as a part of that planning. The metrics help HR leaders understand how HR-related activities contribute to overall business objectives and where adjustments are needed to better align with the company’s strategy.
• Increased transparency and accountability. HR reporting promotes transparency within your organization. It holds HR accountable for its actions and provides employees and stakeholders insight into HR processes and outcomes. When your team members can view data about your organization, they are more informed and feel more connected to the company, which is crucial to improve employee engagement and inclusivity.
• Talent management. Speaking of employee engagement, HR reporting assists in talent management by providing insights into employee engagement, development and succession planning. That helps identify high-potential employees, address skill gaps and develop talent retention strategies.
• Diversity and inclusion. HR reporting can track diversity and inclusion metrics, such as the representation of different demographic groups within the workforce. That information is crucial for assessing progress toward diversity goals and fostering an inclusive workplace.
• Legal compliance and risk management. HR reporting helps the organization with HR compliance when it comes to legal and regulatory requirements. It allows HR to track compliance with labor laws and other regulatory mandates to reduce the risk of legal penalties.
• Cost efficiencies. HR reporting can help control costs. When organizations analyze data on recruitment, training and benefits, they can identify areas where cost-saving measures can be implemented without compromising the quality of HR services.

Overall, HR reporting is a valuable tool for effectively managing HR functions, making data-driven decisions, creating an engaged and productive workforce, and ensuring legal compliance.

What are the challenges of HR reporting?

HR reporting can be a powerful tool for organizations, but it also comes with potential challenges. Some of the common challenges of HR reporting include:

• HR data complexity. Data is helpful only if someone knows how to compile and interpret it. HR reporting can be complex, and many professionals lack the technical expertise to generate and interpret meaningful reports. That can lead to inaccurate or incomplete reports.
• Data quality and integration. HR data is often spread across multiple systems, such as payroll, performance management and recruitment software. It is challenging to collect and integrate the data needed to generate accurate reports.
• Employee privacy and data security. HR reporting often involves sensitive employee information. Maintaining data privacy and security is crucial to comply with data-protection laws and protect employee confidentiality.
• Regulatory compliance. HR reporting requirements are subject to change due to evolving labor laws and regulations. Staying compliant with these changes is a constant challenge for HR teams. That is especially true for companies that operate in multiple states or countries. 

In addition to choosing the right HRIS system for your company’s reporting needs, implementing the system so it works the way you intended is another challenge, des Moulins said. Lewis agreed, adding that it’s important for companies to understand exactly what the HRIS vendor is responsible for in terms of applying the system, and what will be required of the buyer. “They show you this amazing product in full functioning form and all the amazing things that it can do, and they sell you something that somewhere in the fine print says, ‘Some assembly required,’” Lewis said. “And it’s not some assembly — it’s a lot of assembly.”

Despite the challenges, HR reporting is an essential part of effective HR management. A well-defined HR reporting strategy can help you navigate the challenges effectively.

Erin Donaghue and Skye Schooley contributed to the reporting and writing in this article.