How to evaluate the economic effect of HR branding?

However, as you, dear HR, are going toto disburse funds for the organization of work on HR-branding from its Director General and the CFO? If the General in a number of cases can "buy into" yours: "Not everything is measured in money!", Then the financier will not give you anything for such a speech! And he will be right! So it is necessary to evaluate the economic effectiveness of your HR branding, because in the end the task of making this company the best employer is not an end in itself. The goal was and remains the task of providing the company with qualified personnel, the creation of a sustainable literate team with the ultimate and main goal of qualitative implementation of the set production and management tasks.

In general terms, we can formulate several basic principles that determine the logic economic evaluation of activities on HR-branding.

1. 
   Economic efficiency needs to be assessedalways, as in essence it is investment in business development (in this case, in labor potential). Accordingly, the approaches to evaluation should be similar to the assessment of investment attractiveness. In other words, in a number of cases it is impossible to wait for the effect here and right now.


2. 
   
   Evaluation should be conducted before and after the implementation of activities for HR-branding. Before we are determined: is it worth it? Then we get the result: was it necessary?


3. 
   
   As a consequence of the foregoing, efficiencyinvestments in HR-branding should be determined by improving the efficiency of the company by improving the use of labor potential, as well as its availability.


4. 
   
   Where to begin? We need to start with a clear categorization of the effects that should be achieved after the implementation of activities for HR-branding. It should be noted that the effects for different companies will be different, here we will only list the most characteristic of them.

So, the activities on HR-branding will entail the following positive in terms of economic efficiency of the event:

• 
  increased output of finished products due to increased labor productivity;
• 
  increased output of finished products in connection with staffing;
• 
  reduction in the marriage of finished products due to the formation of a well-qualified and qualified team;
• 
  reduction of costs for recruitment both by own recruiters and recruited recruitment agencies;
• 
  reduction of costs for training new specialists;
• 
  decrease in labor costs in connection with the optimization of the number of personnel, which in turn is caused by an increase in labor productivity.

But at the same time events on HR-brandingwill entail an increase in the costs of actually conducting them (advertising, increased costs for material assistance to employees, to increase wages, etc.). Generally economic effect of HR-branding will be defined as the difference in economic effect from the implementation of activities and costs for these events. Those.

where S_hr - the economic effect of HR-branding; S_ef - the total economic effect from the implementation of activities for HR-branding; S_z - total costs for the implementation of activities for HR-branding.

In the characteristic case S_ef is defined as:

where S_Fri - increase in the output of finished goods in rubles due to increased labor productivity; S_ear - increase in the output of finished goods in rubles in connection with staffing; S_Sat - Reduction of finished products in rubles due to the formation of a cohesive and qualified team; S_P - Reducing the cost of recruiting staff both by own recruiters and recruited recruitment agencies; S_about - reduction of costs for training new specialists; S_wholesale - Reduction of labor costs in connection with the optimization of the number of personnel, which, in turn, is caused by an increase in labor productivity.

The cost of implementing activities for HR-branding S_z will be defined as:

where S_rivers - costs for internal and external PR activities of the HR brand; S_sp - the cost of increasing the payroll in order to bring it to the market average level or by creating a new effective system of material motivation; S_mp - expenses for the payment of material assistance in accordance with the new HR-procedure "Provision of material assistance to employees"; S_R - costs for repairing the premises of the management departmentstaff. At the end of the proposed formula, the ellipsis is not accidental, because The costs that your company will incur in connection with the implementation of activities for HR-branding, can be very diverse. In this case we brought The most characteristic, but by no means obligatory cost items.

Further, how to calculate each of the components of these formulas. So,

1. S_Fri - increase in the output of finished products in rubles due to increased labor productivity is defined as:

where ΔP - increase in output per unit of time, tn, C - unit price of produced goods, rubles / ton.

In its turn ΔP is defined as:

where P_to - development of finished products in a unit of time after the implementation of HR-procedures aimed at increasing staff motivation to work,_Mr. - development of finished products in a unit of time before the beginning of the implementation of HR-procedures aimed at increasing staff motivation to work,

2. S_ear - increase in the output of finished goods in rubles in connection with staffing is defined as:

where n is the production rate per person. per unit time, tons. ΔN - the difference between the staff number of staff and the actual before the implementation of activities for HR-branding, C - the unit price of manufactured goods, rubles / ton.

3. S_Sat - the reduction in the marriage of finished goods in rubles as a result of the formation of a cohesive and qualified team is defined as:

Where ΔВ - reduction of reject of finished goods per unit time, tn; C - the price of a unit of output, rubles / ton.

In its turn ΔB is defined as:

where in_to - the size of the finished product's marriage per unit of time after the implementation of HR-procedures aimed at increasing the motivation of staff to work,_Mr. - the size of the finished product in a unit of time before the beginning of the implementation of HR-procedures aimed at increasing staff motivation to work,

4. S_P - Reducing the cost of recruiting staff both by own recruiters and recruited recruitment agencies and S_about - a reduction in the costs of training new specialists is defined as:

Where Δk_tk - a coefficient characterizing the decrease in staff turnover (for example, staff turnover was 20%, after the implementation of activities for HR-branding was 15%, the reduction is 5%, respectively, Δk_tk= 0.05); H - number of the personnel of the enterprise, people; S_by - the cost of searching for, selection (by own forces and third-party recruitment agencies) and training a new employee, rubles. for one person.

In this case, we will encounter following problems:

1. 
   how to distinguish the decrease in staff turnover that occurred as a result of the implementation of HR-branding activities, from a decrease in staff turnover that occurred under the influence of other external causes?
2. 
   how to reliably estimate the costs of finding, selecting and training a new employee?

For solutions to these problems, it is proposed to practice The following approach.

At dismissal each of employees of the enterprise fills in the questionnaire, in which he indicates the reasons for his dismissal. Further in the calculation of the staff turnover coefficient is taken only the number of staff who resigned for reasons whose liquidation depends on the employer. Those. if the employees were dismissed in connection with the move to another city for family reasons, their strength was not taken into account. Conversely, the number of personnel who leave due to low wages, unsatisfactory working conditions, etc., was taken into account. Thus, we receive a reduction in employee turnover for reasons that are specific to the company, and the reduction of this indicator is interpreted as one of the successes in implementing HR-branding procedures. In order to increase the reliability of the formation of data together with the questionnaire, the respondent answers questions of the test that determines, among other factors, the degree of veracity of the employee's answers.

To reliably estimate the cost of searching for, recruiting and training a new employee, the following. When searching for personnel by a recruitment agencythe prices are known, the average value of the cost of searching and recruiting for the last quarter is taken into account. In the case of search and hiring through its own recruitment specialist, the selection costs are defined as the ratio of the monthly salary of the specialist to the average monthly number of personnel he has selected for the last year.
By determining the costs of training a newemployee approach is similar. The average value of the cost of training of one employee in outside organizations is taken and the average cost of training one employee by their specialist.

5. S_wholesale - the reduction of labor costs in connection with the optimization of the number of personnel, which, in turn, is caused by an increase in labor productivity is defined as:

Where N is the number of abbreviated staff units; FROM_Szobo - the average size of wages, a single social tax, payments of a social nature, etc. per person per month, rubles / person.

Now we need to evaluate costs for implementing HR-branding activities S_z.

1. S_rivers - costs for internal and external PR activities of the HR brand:

where S_tv - The cost of advertising the HR brand on television, S_glad - the cost of advertising the HR brand by radio, S_gg - The cost of advertising the HR-brand in newspapers and magazines, S_int - The cost of advertising HR-brand on the Internet, S_SRP - remuneration of a management service employeepersonnel involved in conducting training sessions with personnel aimed at increasing the attractiveness of the company in the eyes of their employees. On the functions of this specialist, we wrote above, when we considered the organization of events to promote the company's internal HR-brand; S_additional - additional costs for equipment of the hall for conducting classes, demonstration equipment, posters, etc.

2. S_sp - the cost of increasing the payroll in order to bring it to the market average level or by creating a new effective system of material motivation is defined as:

where c_R - average market level of wages per employee, rubles / person. from_f - the actual level of the average salary per enterprise per employee, rubles / person; N - actual number of employees of the enterprise, people.

3. S_mp - expenses for the payment of material assistance in accordance with the new HR-procedure "Rendering assistance to employees" are defined as:

where c_mp - Average amount of material assistance, rubles / person; n- the average number of staff to whom this material assistance is paid. It is determined either according to the list of employees who receive material assistance, or the average for the previous reporting period.

4. S_R - expenses for repairing the premises of the personnel management department. These costs are taken from the estimate for repair work.

Further calculated coefficient of profitability, which is defined as follows:

As mentioned above, such an evaluation is necessarycarry out before the implementation of activities for HR-branding on the basis of the forecast data and after based on the factually obtained result. At the same time, the evaluation "before" gives us the opportunity to adjust our measures taking into account the economic efficiency of their implementation, as well as to justify their expediency or at least return to the Director General. The actual result will allow you to understand what you got as a result and correct in the future your actions.

Mansurov RE,

candidate of economic sciences,

Director of the Zelenodolsky branch of the Chelyabinsk State Institute of Economics, Management and Law (Kazan)