New Year’s Business Resolutions: Metrics That Matter
Last week, we talked about analyzing your business using the SWOT method, outlining the strengths, weaknesses, opportunities and threats that exist in your business as a whole and in different departments. Today, we’re going to look at the numbers themselves: the metrics that matter to your business.
Like management guru Edward Deming said, “You can’t manage what you don’t measure.” For instance, it’s easy to say “We’re doing pretty well in employee retention” based on a general feeling of success in that area, but if HR data shows that your turnover rate is 30% higher than the average for your industry, that’s another story.
It’s always good to know where you stand, even if it contradicts a positive impression you’d had. For one thing, your impressions are now based in reality. And once you’re aware of a problem, you can begin figuring out ways to fix it.
So what key metrics should you be measuring?
Financial: Net cash flow, gross margins, operating margins, profit margins and SGA (sales, general & administrative) costs.
Employee: Productivity, training participation, career development and turnover.
HR: Worker’s compensation costs and claims, unemployment insurance claims, health care costs, FUTA payments.
Marketing: Marketing impacts are trickier to measure, but online marketing, including web analytics and social media mentions, can be quantified fairly easily.
Client mix: What percentage of your business does each of your top 10 clients bring in? If your client base is too dependent on one client or one industry, that’s a good indication that it’s time to diversify.
Reliance Staffing & Recruiting can help you improve many of your HR, employee and financial metrics. Contingent workers can keep your workforce flexible so you can respond to increased demand without incurring extra overhead during down times. We handle worker’s compensation, unemployment, health insurance and FUTA for our associates, so you don’t have to worry about that. And having contingent workers available can reduce the pressure on your regular workforce to keep productivity high and turnover low. Contact us today to learn more about how we can keep your metrics nice and healthy.
Are there other crucial metrics that you measure for your business? Let us know in the comments!
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