For SMEs in Malaysia, having a productive and engaged workforce is crucial for business growth. While SMEs typically have fewer resources to allocate to HR, monitoring key HR metrics can provide valuable insights into employee retention, engagement, productivity, and hiring efficiency. According to a 2023 report by SME Corp Malaysia, SMEs account for 97% of all business in Malaysia, making efficient HR practices a critical factor in sustaining Malaysiaโs economic growth.
Here are the top five HR metrics that drive business success and continuity.
Employee Turnover Rate
Employee turnover rate measures the frequency of employees leaving the organization. High turnover is very costly for SMEs, as it impacts productivity and team morale. In a Mercer Employee Experience Survey, nearly 34% of Malaysian employees were considering leaving their job in 2021, with reasons of lack of career progression to better salary. This metric helps SMEs understand reasons for employee exits and take proactive steps to improve retention, such as career development, workplace wellness and competitive benefits.
Time to Hire
Time to hire measures the number of days to fill a vacancy from hiring approval to the candidateโs first day at work. Prolonged hiring times leads to a reduction in workforce efficiency, impacting revenue and lost opportunities. In a fierce job market, candidates often receive multiple offers. ย A long recruitment process can result in the loss of top talent. JobStreet Malaysia reported that candidates in highly sought-after fields, such as technology and engineering, often receive job offers within two to three weeks. Monitoring time to hire helps streamline recruitment to attract and hire quickly. Using outsourcing services combined with technology can put a focus on recruitment.
Absenteeism Rate
Absenteeism rate tracks employee absences, which can indicate workplace dissatisfaction. This may reflect issues like burnout, poor management, or lack of workplace flexibility. The Randstad Malaysia survey showed 81% of Malaysian employees expect flexible work. By monitoring absenteeism, SMEs can identify early signs of employee dissatisfaction and work on solutions in creating a more flexible, supportive work environment.
Employee Engagement
Employee engagement and satisfaction play a vital role in productivity and retention and a way is to conduct employee net promoter scores (eNPS) survey. A Gallup report reveals that highly engaged teams see 21% greater profitability. Regularly measuring and acting on employee feedback can help SMEs improve engagement and foster a positive work culture.
Revenue per Employee
Revenue per employee calculates workforce productivity (revenue/headcount). This assess whether teams are operating efficiently and contributing to business growth. SMEs in Malaysia contributes 38.2% to the nationโs GDP (SME Corp), so optimizing employee productivity can significantly impact business success, continuity and overall economic growth. This can identify areas for productivity improvements that drive profitability.
In conclusion, these HR metrics can provide Malaysian SMEs with the insights needed to retain top talent, enhance productivity, and foster a positive work environment. Monitoring and acting on these metrics not only supports individual business growth but also contributes to Malaysiaโs broader economic development.
