Tracking HR metrics can help businesses to evaluate their HR strategies and understand their workforce better. By keeping track of certain key metrics, companies can make data-driven decisions and measure the effectiveness of their HR practices. In this article, we will discuss the top 20 HR metrics that every business needs to track and how to track.
1. Employee Turnover Rate
The employee turnover rate measures the percentage of employees who leave a company during a given period. This metric is important to track as it helps to identify any underlying issues in the company’s culture, management, or compensation.
Formula: (Number of employees who left / Average number of total employees) x 100
2. Absenteeism Rate
The absenteeism rate measures the percentage of employees who are absent from work, either scheduled or unscheduled, during a given period. This metric is important to track as it can impact the productivity and profitability of a company.
Formula: (Total days absent / Total scheduled workdays) x 100
3. Time to Hire
Time to hire measures the time it takes to fill a vacant position. This metric is important to track as it can help companies to optimize their hiring process and reduce their recruitment costs.
Formula: (Date the position was posted – Date the candidate accepted the offer)
4. Cost per Hire
This metric measures the cost of the recruitment process to fill a job opening. High cost per hire can indicate inefficient recruitment processes, a lack of competitive compensation and benefits, or a shortage of qualified candidates.
Formula: Cost per Hire = (Total Recruitment Costs / Total Number of Hires).
5. Training and Development Cost per Employee
Training and development cost per employee measures the cost of training and developing employees within a company. High investment in training and development can lead to increased employee engagement, improved employee performance, and decreased turnover.
Formula: (Total cost of training and development / Total number of employees)
6. Turnover Rate by Department
This metric measures the percentage of employees who have left a specific department within a given period. It is important to track this metric to identify departments with higher turnover rates and take necessary actions to address retention issues.
Formula: Number of employees who left the department / Total number of employees in the department * 100%
7. Revenue per Employee
Revenue per employee measures the total revenue generated by a company divided by the number of employees. This metric is important to track as it can help companies to understand the efficiency of their workforce and how they contribute to the company’s revenue.
Formula: Total revenue / Total number of employees
8. Profit per Employee
This metric measures the profit generated by each employee. Importance: A high profit per employee indicates efficient use of resources and effective management.
Formula: Profit per Employee = Total Company Profit / Total Number of Employees.
9. Promotion rate
This metric measures the percentage of employees who have been promoted within the organization. A high promotion rate indicates a healthy career progression and growth opportunities for employees.
Formula: Number of employees promoted during the period / Total number of employees * 100%
10. High Performer Turnover Rate
High Performer Turnover is the percentage of high-performing employees who voluntarily leave an organization. It is an important metric to track as it can indicate issues with retention and talent management strategies.
Formula: (No. of High-Performers Left / Total Number of Employees Left) x 100
11. Probationary Turnover Rate
This metric tracks the number of employees who leave the company during their probation period. Understanding the reasons why employees leave during probation can help HR identify potential issues with the recruitment or onboarding process, as well as help improve retention rates.
Formula: (Number of employees who left during probation period / Total number of employees who started during the same period) x 100
12. Employee productivity
This metric measures the amount of work completed by employees within a specific period. It is important to track this metric to identify areas where productivity can be improved and optimize workforce planning.
Formula: Total output / Total number of employees
13. Diversity and Inclusion
Diversity and inclusion measures the level of diversity within a company’s workforce. This metric is important to track as it can help companies to create a more inclusive and welcoming workplace culture that fosters innovation and creativity.
Formula: (Number of employees from underrepresented groups / Total number of employees) x 100
14. Time to Productivity
Time to productivity measures the time it takes for a new hire to become fully productive. This metric is important to track as it can help companies to identify areas where they can improve their onboarding process and reduce the time it takes for new hires to contribute to the company’s success.
Formula: (Number of days to reach full productivity / Total number of days employed)
15. Employee Satisfaction
Employee satisfaction measures the overall level of satisfaction among a company’s employees. This metric is important to track as it can help companies to identify areas where they can improve their work culture and employee engagement.
Formula: (Number of satisfied employees / Total number of employees) x 100
16. Gender Diversity
This metric measures the percentage of male and female employees in the company. A diverse workforce can lead to increased innovation, better decision making, and improved employee satisfaction.
Formula: (Number of Male Employees / Total Number of Employees) x 100% and (Number of Female Employees / Total Number of Employees) x 100%
17. Employee Net Promoter Score (NPS)
This metric measures the likelihood of employees to recommend the company as a place to work. High employee NPS can indicate high employee satisfaction and engagement.
Formula: Employee NPS = (Number of Promoters – Number of Detractors) / Total Number of Responses x 100%
18. Human Capital ROI
This metric measures the return on investment (ROI) for human capital. High human capital ROI indicates efficient use of resources and effective management.
Formula: Human Capital ROI = (Total Revenue – Total Expenses) / Total Human Capital Costs x 100%
19. Women in Leadership
Women in leadership measures the percentage of women in leadership positions within an organization. This metric is important as it helps organizations track their efforts towards gender diversity and inclusion. It can also help identify any barriers preventing women from advancing into leadership roles.
Formula: Number of women in leadership positions / Total number of leadership positions x 100
20. HR-to-Employee Ratio
HR to employee ratio is a metric that measures the number of HR employees in proportion to the number of employees in the organization. It is important because it indicates the effectiveness and efficiency of the HR department in managing the human resources of the organization.
Formula: HR to employee ratio = Total number of HR employees / Total number of employees in the organization
By tracking these HR metrics, organizations can gain valuable insights into their workforce and make data-driven decisions to improve their HR processes, employee engagement, and overall business performance.
