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A LevelBusinessAQARevision Notes7. Analysing the Strategic Position of a Business (A Level)7.2 Assessing the Internal Position of a BusinessUsing Human Resource Data

Using Human Resource Data (AQA A Level Business): Revision Note

Exam code: 7132

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

Updated on

Measures of human resources performance

  • A range of human resources data can be used to assess how well a business is performing

    • These data can be analysed over time to determine whether performance is improving or worsening

    • They may also be compared with the performance of similar firms

Common measures of human resources performance

Measure

Calculation

Explanation

Labour turnover

fraction numerator Number space of space staff space leaving over denominator Total space number space of space staff end fraction space space cross times space 100

  • The proportion of employees leaving a business during a specific time period

Labour retention

fraction numerator Number space of space staff space remaining over denominator Total space number space of space staff end fraction space space cross times space 100

  • The proportion of employees remaining with a business during a specific time period

Absenteeism

fraction numerator Number space of space staff space absent over denominator Total space number space of space employees end fraction space space cross times space 100

  • The proportion of staff absent from work during a specific period of time

Labour cost per unit

fraction numerator Total space labour space costs over denominator Total space output end fraction

  • The average labour cost attributed to each unit of output

Average wage

fraction numerator Total space labour space costs over denominator Total space number space of space employees end fraction

  • The average annual earnings of employees in a workplace during a specific period of time

Accident rate

fraction numerator Number space of space workplace space accidents over denominator Total space output end fraction space cross times space 100

  • The rate of workplace accidents as a proportion of output

Case Study

Horizon Care Services Ltd

Business Overview
Horizon Care Services is a regional provider of residential care homes in the Midlands. The company employs over 600 staff across 12 locations and prides itself on delivering high-quality, compassionate care to elderly residents

Illustration of a carer and elderly woman with a cane in front of a house, symbolising Horizon Care Services.

Identifying HR Performance Issues

By late 2023, Horizon’s senior management became concerned about rising recruitment costs and declining staff morale. They reviewed key human resource performance data to investigate:

Metric

2022 Average

2023 Average

Change

Labour turnover

18%

31%

▲ 13 percentage pts

Absenteeism rate

2.3%

4.1%

▲ Nearly doubled

Labour cost per unit

£145

£172

▲ +18.6%

Average wage

£22,000

£23,500

▲ +6.8%

Analysis

  • The sharp rise in labour turnover revealed that more staff were leaving the company, increasing the burden on recruitment and reducing team stability

  • The increase in absenteeism pointed to potential employee dissatisfaction, burnout, or illness, particularly among frontline care workers

  • Labour cost per unit rose significantly—this was partly due to more frequent use of agency staff to fill gaps left by absent or departed employees

  • Although wages had increased, staff surveys showed that employees felt under-supported and overworked, suggesting that pay increases alone weren’t enough to retain staff

Business response

  • Horizon launched an employee wellbeing programme, including counselling access, stress management workshops, and regular one-to-one check-ins with managers

  • It introduced a loyalty-based retention bonus scheme for employees with more than two years’ service

  • A new induction and mentorship system was rolled out to better support new hires and reduce early-stage turnover

Outcomes within 4 months

  • Labour turnover dropped to 22%

  • Absenteeism fell back to 2.7%

  • Labour cost per unit stabilised at £158

  • Exit interviews showed improved staff sentiment and clearer communication with management

Evaluating using HR data to assess business performance

  • Whilst HR data can provide useful data to support business decision-making, it has a series of limitations

  • Importantly, HR data is focused on the performance of people, whose opinions, attitudes and motivations are often very difficult to capture in quantitative terms

Benefits of using HR data

  • Reveals workforce stability

    • High retention with low labour turnover and absenteeism is a sign of a committed, experienced team

    • This is often linked to high productivity and morale

  • Helps manage costs

    • Monitoring labour cost per unit and average wages helps control overheads and set appropriate budgets

  • Highlights health and safety performance

    • Monitoring accident rates and absenteeism can show how well staff are protected and nudge a business to address safety concerns

Limitations of using HR data

  • Masks the root causes of HR problems

    • Figures don’t show why people leave or stay so problems like poor management or lack of progression opportunities may be missed

    • Exit interviews and regular staff surveys can help

  • Ignores quality of output

    • Low labour cost per unit could mean underinvestment in skilled staff, risking defects or poor service quality not reflected in these figures

  • Time lags

    • By the time absenteeism or accident figures rise, morale or safety may already be very poor

    • This is a reactive rather than preventive strategy

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    Author
    Reviewer
    Lisa Eades

    Author: Lisa Eades

    Expertise: Business Content Creator

    Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

    Steve Vorster

    Reviewer: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.