16 Important HR Metrics to Track

HR metrics are data points that help businesses better manage their most valuable resource: their people. By analyzing data, HR professionals can develop well-informed strategies to increase employee engagement, improve their hiring efforts and improve the efficiency of their operations.

What Are HR Metrics?

HR metrics are data indicators that assess the health of the organization and signal areas that could benefit from HR intervention. Metrics can also measure the efficiency and effectiveness of those HR efforts over time.

“It draws a very direct connection from what HR is doing to what the business wants to focus on ... and how HR is helping to move the organization in that direction,” Christy Pruitt-Haynes, distinguished faculty at organizational research and consulting firm NeuroLeadership Institute, told Built In. 

HR metrics consist of quantitative data, like the percentage of employees who leave the organization in a year, and qualitative data, like employee survey responses. The latter is an example of “soft metrics,” which can be helpful for explaining quantitative data points.

“The qualitative data helps to give the context,” Noelle London, founder and CEO of HR insights software company Illoominus, told Built In. “Any of that data on its own will be challenging to give you the whole picture.”

HR professionals can use metrics insights on a number of fronts ranging from recruiting to employee engagement. Below are some of the most important HR metrics to track.

Talent Acquisition Metrics

1. Cost-Per-Hire

Cost-per-hire measures how much money is spent on recruiting and hiring. This could include the cost of advertising the position, the recruiter’s time, travel expenses and referral bonuses. This metric is helpful in budgeting recruiting expenses, and it can also gauge the efficiency of a company’s recruiting operations. Some companies may be willing to pay a higher cost-per-hire if they are hiring quality candidates in a competitive industry.

2. Time-to-Hire

Time-to-hire is the time it takes a candidate to go through the hiring process, from submitting their application to accepting the offer. This is an important metric to track, because candidates may lose interest or accept another job offer if they feel the hiring process is dragging. Another way of measuring the efficiency of the hiring process is through time-to-fill, which measures the time from the position being posted to an applicant accepting the position.

3. Quality-of-Hire

Timeliness is important, but not as important as hiring the right candidate. That’s why quality-of-hire has been called “the holy grail” of recruiting metrics. Measuring the quality of new hires is difficult and often subjective, but it could include a combination of performance reviews, employee engagement surveys, retention rate and peer reviews after 90 days. These criteria can be presented as an average quality-of-hire score, or it can be presented as a percentage of new hires that meet a predetermined threshold for a quality hire.

4. Offer Acceptance Rate

Offer acceptance rate — the percentage of job offers accepted by candidates — is another important indicator for talent acquisition. A low offer acceptance rate could indicate that its salary offers are lower than other companies, or it could indicate an onerous or troublesome hiring process. By addressing a low acceptance rate, companies can improve their employer brand and save HR teams the headache of reposting and re-interviewing candidates.

5. Workforce Diversity

To get a comprehensive snapshot of your workforce, you need demographic data about employees’ gender, race and location, at the least. This data can be used to measure the diversity of an organization’s workforce, which might prompt a need to actively recruit more diverse candidates. HR professionals should also look at diversity data in combination with other HR data about hiring, promotions and retention to see if there are inequities that should be addressed.

Organizational Structure Metrics

6. Headcount

A simple but important metric, headcount is the number of employees that work at an organization at a specific time. This figure, which includes full-time, part-time and contract workers, should be supplemented with information about each employees’ demographics, department and salary. This information can be useful for workforce planning and maintaining appropriate staffing levels.

7. Total Cost of the Workforce

The total cost of the workforce measures how much the organization spends on salaries and benefits, as well as other employee-related expenses like recruiting, onboarding and training. This metric is useful in understanding the biggest drivers of personnel expenses, how they change over time and how personnel-related expenditures correlate with retention, productivity and other HR and business metrics.

8. Employee Growth Rate

Employee growth rate can give a sense of how fast an organization is growing over a set time period — this could be over a six-month period or a five-year period, for instance. To calculate the employee growth rate, subtract the number of employees at the end of the time period from the number of employees at the end of the time period and divide the number of employees at the start of the period. This figure can help HR teams forecast hiring needs and budget personnel costs, especially during periods of expansion.  

9. Spans and Layers

Spans and layers indicates how flat or hierarchical an organization is. Span of control measures how many employees report directly to one person, and organizational layers refers to the number of organizational levels with supervisory responsibilities. A spans-and-layers analysis can help organizations reduce bureaucracy and accelerate decision-making.

Employee Engagement Metrics

10. Voluntary Turnover Rate

Voluntary turnover rate is the percentage of employees who have voluntarily left the company over a specified period of time. High turnover is costly and inefficient, so it’s important to diagnose the cause of it. HR leaders can look at the demographics of people leaving to identify any trends by tenure, department or demographic. 

11. Employee Retention Rate

Employee retention rate is the percentage of employees who stay with a company during a specified time period. It’s more or less the opposite of the turnover rate, with some exceptions. An organization’s retention rate is influenced by a number of factors, like employee engagement, organizational culture and opportunities for advancement. Companies should focus on retaining top-performing employees who can use their institutional knowledge to propel the business forward.

12. Employee Net Promoter Score (eNPS)

Employee net promoter score (eNPS) gauges employee engagement by asking team members to rate how likely they are to recommend their company as a great place to work. Based on a scale of 10, those who give a score of 9 or higher are considered promoters, and those who give a score of 6 or lower are considered detractors. The score is calculated by subtracting the percentage of detractors from the percentage of promoters. While useful as a general indicator, experts recommend digging deeper into demographics, asking other survey questions and considering additional data points to get a better picture of employee engagement.

13. Absenteeism Rate

Absenteeism rate is the percentage of unscheduled absences within an organization, a team or for a single employee. Absenteeism might indicate low employee engagement or issues with employees’ mental or physical health. Companies may want to conduct surveys to see if workers are suffering from burnout, which could lead to them quitting. They might also offer more paid time off, offer employee assistance programs or help employees with work-life balance.

Performance Metrics

14. Internal Promotion Rate

Internal promotion rate offers a look at the upward mobility and career development in an organization. It’s calculated by dividing the number of promotions in a year by the total number of employees. If an organization has retention troubles coupled with a low internal promotion rate (the average is 7 percent), employees could be jumping ship to advance their career elsewhere.

15. Revenue Per Employee

Revenue per employee is a snapshot of an organization’s efficiency, productivity and return on investment. It can be calculated by dividing a company’s total revenue by its headcount. This metric is best analyzed alongside other HR metrics, like the turnover rate, headcount and total cost of the workforce. It can also be helpful to compare against organizations of a similar size in the same industry. 

16. Compa-ratio

Compa-ratio, which is short for comparative ratio, is a way to measure whether an organization’s salaries are competitive. HR professionals can calculate an employee’s compa-ratio by dividing their salary by the median salary range for the same job title in the same industry. Compa-ratio can be used to gauge whether an organization’s salaries are in line with the industry average, or it can be used to look at wage gaps between employees within the organization.

Related ReadingWhat Is HR Analytics?

Why Are HR Metrics Important?

In addition to being the most expensive line item in its budget, a company’s workforce is also the biggest determinant of business success. HR metrics can help company leaders identify any problems in the organization and develop data-driven solutions rather than relying on gut instincts.

HR metrics become more meaningful when positioned in context with other data points. A company that is suffering from high turnover, for example, might look at the demographics of employees that are leaving. If more experienced employees are leaving, HR could consider more internal promotions or career development programming. If employees of color are leaving, there may be some organizational inequities to address.

“Looking at metrics in combination with each other gives you a powerful data set that you can use to … do very specific or targeted activities,” Pruitt-Haynes said.

HR metrics are also important for tracking the effectiveness of HR initiatives and demonstrating the value of those initiatives to other senior business leaders in the organization. HR leaders have a seat at the table when senior leadership is making strategic business decisions. To provide value to these conversations, HR leaders need real-time data — not just an annual report — to navigate evolving conditions.

“Because there’s so much change and the speed of change is happening so rapidly within companies, HR leaders really need the data at their fingertips so that they can more quickly understand what’s happening within the organization and then react to it and solve for it,” London said. 

By providing this data to senior leaders, HR leaders can work collaboratively to develop solutions instead of carrying the weight of complex organizational issues.

“Culture isn’t built from an HR leader, and it shouldn’t be owned by an HR leader,” London said. “It should be more about that HR leader facilitating these metrics and holding other people responsible for them.”

Frequently Asked Questions