Essential HR Metrics Every Company Should Measure

As experts in HR, we know how revolutionary HR can be in kickstarting growth and changing your business for the better.

But as a business leader, growth and HR don’t always seem connected...

However, that's exactly why it's so important, neglecting any area of your business is sure to lead to inefficiencies.

If you want to discover growth in your business, consider tracking HR metrics. By analyzing this data, you will see how much of an effect HR has on your business… for better or for worse.

 With this data, you will find potential for untapped growth.

Why HR Metrics Matter

HR Metrics will help you:

• Understand HR’s impact on your bottom line

• Align your people strategy with business goals

• Make data-driven decisions for greater accuracy

• Improve HR efficiency and effectiveness

• Hold HR accountable to key goals and targets

Key HR Metrics to Track

To truly showcase HR’s value, you need to track the right metrics. While the best metrics depend on your company’s goals, these essential categories provide valuable insights across the board.

HR and Management Metrics

• Cost per hire: Calculates the average cost of recruiting and onboarding a new employee, helping to optimize hiring budgets.

• Average time to hire: Measures the time it takes to fill an open role, offering insights into recruitment efficiency.

• Labor cost as a percentage of revenue: Tracks workforce expenses relative to revenue generation.

• Revenue/profit per employee: Evaluates how much revenue or profit each employee generates, reflecting overall productivity.

• Benefits cost per employee: Helps assess whether your benefits offerings are competitive while managing expenses.

• Compa-ratio: Compares employee compensation to market standards, ensuring competitive pay structures.

Absenteeism

• Absence rate: Monitors the percentage of scheduled workdays employees miss.

• Cost of absenteeism: Calculates the financial impact of absences, including lost productivity and overtime costs.

• Absence rate by manager/department: Identifies trends in attendance across teams, helping target interventions.

Turnover and Retention

• Tenure: Tracks employee longevity to assess job satisfaction and succession planning needs.

• Retention rate: Measures the percentage of employees who stay, signaling workplace stability.

• Turnover rate: Identifies the percentage of employees leaving within a certain period, highlighting retention challenges.

• Voluntary turnover rate: Shows the rate of employees choosing to leave, guiding improvements in engagement.

• Involuntary turnover rate: Tracks terminations, offering insights into hiring and performance management.

• Cost of turnover: Quantifies the total cost of replacing employees, from recruitment to lost productivity.

• 90-day resignation rate: Monitors early departures to spot onboarding and hiring issues.

Performance Metrics

• Employee productivity rate: Measures individual contributions to company goals.

• Goal completion rate: Assesses how effectively employees meet objectives.

Employee Satisfaction & Engagement

• Employee Net Promoter Score (eNPS): Gauges employee willingness to recommend your company as a workplace.

• Employee Engagement Index (EEI): Measures enthusiasm, commitment, and motivation.

• Employee satisfaction index: Evaluates job contentment and workplace environment.

• Employee innovation index: Assesses whether employees feel empowered to share and implement new ideas.

Training Metrics 

• Time to proficiency: Tracks how long it takes new hires to reach full productivity.

• Skills gap analysis: Identifies areas where training can improve workforce capabilities.

• Training completion rate: Measures the percentage of employees who finish assigned training.

• Training efficiency: Assesses ROI by comparing training costs with performance improvements.

Diversity & Inclusion

• Diversity demographics: Analyzes workforce representation across key demographic groups.

• Diversity in leadership: Tracks the presence of underrepresented groups in management roles.

• Employee Resource Group (ERG) participation: Measures engagement in company-led diversity initiatives.

We Can Help…

HR metrics make HR’s impact tangible and measurable, allowing you to demonstrate real business value. 

Optimize your HR strategy this year by creating HR metrics and tracking the data. You will discover inefficiencies and find ways to grow sustainably.

If you don’t know where to start, we can help. Reach out for a free consultation and let’s set your business up for success!