With limited time and resources, what you measure is as important as what you don’t measure. In this post, we’ll go over 20 HR metrics — qualitative and quantitative — that will deliver the clearest insights for your organization.
What Are HR Metrics?
Human Resources metrics (which we’ll refer to as “HR metrics”) are benchmarks that allow you to measure how well your HR initiatives are performing and how they contribute to the overall success of your organization. For that reason, they’re also referred to as HR key performance indicators (KPIs).
As you’ll see, HR metrics include a wide range of core and non-core areas like:
Recruitment
Hiring
Compensation
Onboarding
Training
Engagement
Productivity
Collaboration
Retention
Recommended Reading: Why is HR Important?
Why It’s Important To Track Human Resources Metrics and Who It Benefits
Tracking and analyzing HR efforts empowers organizations from top to bottom. Specifically, it helps your HR team understand which pain points to tackle, which strengths to build on, and determine the best path forward each year. Here’s a quick snapshot of the benefits:
“What gets measured, gets managed”:
It’s hard to make improvements or measure progress without a tangible starting point. The feedback and statistics your business decides to measure are the metrics you’ll ultimately improve.
Better decision-making:
HR metrics give you concrete data in hand to set realistic expectations, invest in the right resources, and back each new initiative with facts. For example, your gut instinct could tell you that it’s taking too long to onboard new hires, but you won’t know until you track “time to productivity” and weigh it against industry benchmarks.
Improved employee experience:
A core HR function is to serve employees, and with these metrics, you can make data-driven decisions that impact their lives where it matters. For instance, you can identify opportunities to enhance benefits packages, increase training, balance workloads, reconfigure teams, and more.
Key HR Metrics: 3 Major Categories
The 20 different metrics we’re going to look at below can be divided into three main categories: recruitment metrics, financial metrics, and performance metrics.
For each metric, we’ll explain what it measures, how to calculate or track it, and why it’s valuable for your HR or People Ops team. Let’s dive in.
HR Recruitment Metrics
1. Employee Headcount
Employee headcount is the total number of employees in the organization, department, or team you’re measuring. It’s vital to track it accurately since it’s used to calculate so many other HR metrics, such as employee turnover rate.
2. Demographics
Tracking demographic data helps you better understand who’s working for your company and how to equip them for success. Commonly tracked information includes age, gender, race, education level, geographic location, and years working for the company.
Employees can self-report these details or you can use the data already in your system. Be mindful of demographic data collection laws in your country, state, or city.
3. Offer Acceptance Rate
The offer acceptance rate shows you the percentage of candidates who accept your job offers. To calculate it, divide the number of job offers that were accepted by the number of job offers your company extended in a given period, and multiply by 100.
A high rate can point to great communication and benefits, while low rates can point to process issues, non-competitive offers, and more.
4. Time To Hire
Time to hire is the average number of days it takes to fill an open position. Typically, the countdown starts when the candidate enters your recruiting pipeline and ends when they accept the job offer. The average time to hire is 36 days, according to one Society of Human Resource Management (SHRM) report.
5. Cost per New Hire
Cost per new hire measures the amount of money it takes to find, recruit, and hire a new employee. You’ll capture both internal and external costs, like fees for advertising the role, using an applicant tracking system or staffing firm, interviewing candidates, and running background checks.
To calculate it, find the cost and divide it by the number of new employees you hired over a given period of time.
6. New Hire Turnover
New hire turnover is the percentage of new hires that leave the company within a certain time period, typically 30 days, 90 days, or one year. It’s a helpful signal to assess the strength of your hiring and onboarding strategies.
To find it, divide the total number of new hire separations by the overall number of separations during that period, and then multiply by 100.
7. Time Since Last Raise and/or Promotion
Time since last raise or promotion looks at how many months it’s been since an employee’s last pay bump or advancement to a new role. You can track it per employee, by team or department, or find a company-wide average. If this metric is too high or grows over time, employees may be tempted to look elsewhere.
HR Metrics Examples Related to Monetary Value and Revenue
8. Revenue per Employee
Revenue per employee is exactly what it sounds like, measuring how much revenue each employee generates and the efficiency of the organization overall. You can tap the highest-earning employees to lead training programs and business strategy sessions.
9. Cost of HR and People Ops per Employee
This metric measures how much money is being spent on HR or People Ops resources for each employee. You’ll tally up your HR expenses (salary and overhead for HR and People Ops roles, software tools, third-party firms, etc) and divide it by the total number of employees. If it helps, break this metric down by full-time, part-time, contract, etc.
10. HR to Employee Ratio
Your HR to employee ratio tells you whether your team of HR professionals is adequately scaling with the workforce you’re supporting. The average HR to employee ratio is 2.6, and in most cases, as employee count increases, HR staff members decrease.
11. HR and People Ops Software Use Rates
Understand whether your employees are getting the most out of your HR software tools with usage metrics like the number of active users, average time on the platform, session length, usage per month, and more.
Businesses increasingly depend on these toolsets to help employees train, develop skills, and engage with their teams. For example, live org chart software lets your employees learn who’s who and who does what and then initiate valuable relationships — but only if they use it. Choose a few metrics to measure employee engagement with this and other tools.
12. Overtime Hours
As you know, overtime hours are time spent working outside office hours and can represent a large cost investment if enough employees use it. As an HR metric, it clues you into unbalanced workloads, hiring needs, or inefficient scheduling so you can take measures to solve it.
13. Time Off Rates
Unlike absenteeism rate, which measures unexpected absences, the time off rate tells you what percentage of employees took time off from work during a given period. Taken together with employee performance metrics, it can tell you whether the amount of time off is a source of inefficiency or it’s working well.
HR Performance Metrics
14. Potential Talent
“Employee potential” is a vague concept. You use the nine-box model to make it a trackable metric. It’s a handy matrix that lets you categorize employees based on their past performance and potential to grow, informing your promotion and leadership planning.
15. Employee Satisfaction
Employee satisfaction measures the number of employees who would recommend your organization as a good place to work, versus the number of employees who wouldn’t. It tells you whether employees are satisfied in the short or long term, and highlights opportunities for improvement.
Recommended Reading: 8 Important Employee Satisfaction Survey Questions [+ Free Downloadable Template]
16. Voluntary Turnover Rate
Voluntary turnover rate is the percentage of employees who voluntarily leave the organization, rather than accounting for every reason for turnover, such as terminations or layoffs. It’s vital to track because voluntary turnover can often involve losing a high-performing employee.
When 13% of employees voluntarily leave, it’s important to use tools like 1:1 meetings to check-in, get feedback, and stay aligned.
17. Retention Rate per Manager
Retention rate per manager is key to understanding the employee experience. Measuring it can help your team find patterns of burnout and voluntary turnover with specific managers who might need more training or support, making it one of the most important HR metrics.
18. Peer to Peer Praise
Peer to peer praise is an example of an HR metric that’s lesser known but still valuable. It’s a measure of how often team members are giving each other recognition for their accomplishments and assistance. HR and People Ops should help build collaborative processes that enable this to happen more often and highlight it internally.
19. Time to Productivity
Time to employee productivity is a measure of onboarding optimization. It’s the time it takes for your new hires to become acclimated to the organization and start working at full productivity. This metric speaks to your company’s investment in onboarding and training practices, and will likely vary by department.
20. Statistics on Reasons for Personnel Leaving
Employee turnover represents a huge challenge for companies and People Ops teams. Documenting employees’ reasons for leaving is essential. With them, you can figure out which reasons are most common, understand trends over time, and take steps to address attrition.
How To Best Use These Metrics
There’s an endless amount of Human Resources data your team can capture. You could easily spend hours combing through data dashboards and company surveys, but as we’ve covered in this piece, not every metric is worth tracking, analyzing, and leveraging. Here are some best practices to keep in mind.
Identify goals before you choose your metrics.
Work backward from your organizational goals to decide which metrics to track. You can meet with your company leaders, HR team, and/or key decision-makers across departments to agree on priorities and focus areas. This will also prevent data overload.
Focus on the metrics that are actionable for your specific company.
Don’t fall into the trap of measuring data you can’t act on in the near future. For instance, if you know your company can’t tackle your HR to employee ratio, you don’t necessarily need to spend time calculating and reporting on it.
Determine which metrics apply to which departments and measure accordingly.
Not every data point will apply to every team member in the company. For example, overtime hours will only apply to certain types of employees. Evaluate whether metrics are meaningful and have strategic value for each department.
Recommended HR Reading
We’ve got plenty of other HR and People Ops resources available to equip your workforce to perform its best. Keep reading these articles for insights, tips, and tools:
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