Understand HR Metrics Before You Regret | Best HR Analytics, HR Reports, Dashboards

HR Metrics: An Overview

The fact that many firms are beginning to employ HR metrics as a significant component of their entire business strategy may be the most obvious indication that strategic HR is gaining traction in business. In fact, recent polls reveal that approximately one-third of executives desire to receive HR team updates more frequently. Furthermore, a staggering 82 percent of respondents claim that these HR measures are either very useful, useful, or somewhat beneficial for their firm.

In this instance, HR teams must raise their data analytic game if executives respect HR metrics and want to see more of them. Not sure where to begin? This tutorial was developed to help you understand the fundamentals of HR metrics and which ones you should be tracking to have a genuine influence on your business.

HR metrics are used to evaluate the effectiveness of various HR tasks and activities such as hiring, employee retention, training, and labour costs. Human resources departments may utilise these measures to increase their efficiency and show senior management the value of their work.

What Exactly Are HR Metrics?

HR metrics, often known as human resource metrics, are critical statistics that help businesses manage their human capital and assess the success of their human resource activities. Turnover, cost-per-hire, benefits participation rate, and other metrics are examples of such data (more on this later). Measuring this sort of information—what works effectively, what needs improvement, and what future trends to expect—helps businesses determine their people strategy.

Also Read: HR Reports – Everything You Should Know

Why Are HR Metrics Important?

According to a recent poll, both CEOs and HR professionals feel that evaluating HR and its impact on a business is critical. In fact, many CEOs want to hear from their HR personnel more frequently and with more detailed HR reports. This means that HR metrics are no longer optional for any HR team wanting to establish a solid, data-driven management strategy for their company.

HR Metrics Have an Impact on Your Strategy

In our poll, more than two-thirds of respondents responded that measuring the impact of HR initiatives on their business is very important or extremely important. This is a valuable signal for human resource professionals because, as Peter Drucker once said, “what gets appraised gets improved.”

To expand on that statement, what is measured matters: 87 percent of respondents claimed that HR reports affect their organization’s strategy to varied degrees. If your company wants to make educated, strategic decisions in the future, HR analytics must be a part of the jigsaw.

More HR Reports Are Desired By Executives

Despite the significance of HR reporting, it seems that some HR teams are not giving their executive teams as much information as they would want. Almost one-third of the non-HR executives we polled stated their HR team doesn’t report frequently enough, and 16% said they have no clue how frequently their HR team reports.

Despite the fact that 51% of respondents said their HR staff report frequently enough, the data shows that many businesses still have room for improvement. HR has a fantastic opportunity here. Understanding your executive team’s reporting requirements and then achieving those requirements will help you become a more strategic influence in your firm.

Measuring Employee Experience Must Be a Priority

When it comes to HR measurements, it’s not just about frequency—also it’s about what you measure. We questioned respondents about the sorts of HR reports they now use to monitor the impact of HR, as well as the types of HR data they wish they had. Almost a quarter of respondents chose employee happiness as a report they would want to receive, while 20% chose staff engagement.

Employee experience should be an essential aspect of the HR measurement process because HR is supposed to serve the people of a business. Are HR activities assisting in increasing employee happiness and engagement? Or are they impeding these efforts? HR measurements can assist in answering these issues.

What Are The Most Important Human Resources Metrics?

HR has no lack of metrics to track, from headcount to benefit participation. But which data can provide your company with the insights it requires to develop and succeed? We’ve collected a list of the most significant HR metrics and formulae to keep an eye on in your organisation.

Please keep in mind that your specific reporting method will be heavily influenced by your organization’s size, objectives, HR staff, and other factors. It’s critical to work with your executive team to identify which HR metrics are most essential for your firm to track right now and which will be crucial in the future.

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What are HR Metrics?
What are HR Metrics? | Most Important HR Metrics | Examples of Human Resource Metrics

Consider Thinking Beyond The (KPI) Box

Big data technology has introduced numerous new and intriguing approaches to assess HR performance. Long and costly yearly staff surveys, for example, are rapidly being replaced by brief “pulse” surveys that ask employees a quick question on a far more regular basis. This enables the HR team to get a far more accurate picture of employee mood and respond fast to what the data tells them.

Another use for HappyOrNot terminals is to collect daily, anonymous feedback from employees. When put in high-traffic locations such as conference rooms or the cafeteria, the terminal poses a basic inquiry to an employee, and the person replies by selecting one of four happy faces that best expresses how they feel.

The benefit of simple, continuous feedback systems like as HappyOrNot terminals or pulse surveys is not just instant access to information, but also the opportunity to track changes and efforts implemented in response to input to determine how effective those changes were.


  1. Headcount: The overall number of personnel in your organisation or within a certain department.
  2. Demographics: Your workforce’s attributes such as age, gender, education level, and length of service.
  3. Time to Hire: The average number of days between posting a job and an applicant accepting your offer.
  4. Acceptance Rate: The number of offer letters sent by your company divided by the number of candidates that accept one.
  5. The average cost of recruiting a new employee. This figure may be calculated by summing both internal and external hiring expenses and then dividing the total by the number of employees employed in a particular time.
  6. Time to Productivity: The amount of time it takes for new employees to grow used to your company and begin functioning at full capacity.
  7. New-Hire Turnover: The percentage of new recruits that depart within a certain time frame, such as their first year of work.

Retention & Engagement

  1. Employee Contentment: The proportion of workers who would suggest your organisation as a good place to work to those who would not, reflecting overall employee satisfaction.
  2. Total Turnover Rate: The number of employees who leave your company in a specific time period divided by the total number of employees (then multiplied by 100 to come up with a percentage).
  3. Voluntary Turnover Rate: The turnover rate only includes workers who leave your company freely.
  4. Talent Turnover Rate: The percentage of high-performing and high-potential workers that leave your firm.
  5. Retention Rate: This is the inverse of turnover rate in that it divides the number of workers that stayed in your business over a certain period by the total number of employees.
  6. Retention Rate by Manager: The retention rate for particular teams and managers.

Time Tracking

  1. Absence Rate: The average number of days missed in a given time period, excluding permitted PTO (also called absenteeism).
  2. Absence Rate by Manager: The absence rate as it relates to particular teams and managers.
  3. Overtime Hours: The number of overtime hours performed by employees in a certain period of time. You can compute an average or divide it by the number of employees.

Employee Satisfaction and Performance

  1. Revenue per Employee: Total revenue divided by total number of employees.
  2. Performance & Potential: A nine-box matrix that allows you to categorise workers based on their levels of performance and potential for better succession and leadership planning.
  3. Employee performance can be tracked via self-assessments, peer reviews, manager assessments, or a mix of the three.
  4. Goal Monitoring: If your performance management software incorporates goal tracking, you can see the objectives that workers have set, how these goals relate to bigger business goals, and how far they have come.
  5. Company Performance: A high-level comparison of how well people perform vs how engaged and valued they perceive themselves to be.

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Training & Development

  1. Training Expenses per Employee: The entire cost of your company’s training courses and programmes divided by the number of employees.
  2. Training Completion Rate: The percentage obtained by dividing the number of workers who finished a specific training by the total number of employees and multiplying by 100.
  3. Time to Completion: The average length of time an employee takes to finish a specified training programme.
  4. Training Efficacy: There are a variety of ways for assessing training effectiveness, including administering exams or assessments and generating a pass/fail rate.

HR Software and Services

  1. HR Professional-to-Employee Ratio: The number of employees in your firm for each HR professional on your team.
  2. HR Cost per Employee: The entire amount spent by your firm on HR operations divided by the total number of workers.
  3. HR Software Employee Participation Rate: The percentage of workers who actively utilise your HR software divided by the total number of employees.
  4. HR Software ROI: The ROI of your HR software is determined by various elements, but the main formula is the difference between how much the software costs your business and how much money it creates or saves your firm.

How to Use These Metrics Effectively

Your team may collect an infinite quantity of Human Resources data. You might easily waste hours poring through data dashboards and corporate surveys, but as we’ve shown in this article, not every measure is worth collecting, evaluating, and utilising. Here are some excellent practises to remember.

• Determine your objectives before deciding on measurements

Determine suitable metrics to measure by working backward from your organization’s goals. To agree on goals and priority areas, you can meet with your company’s management, HR staff, and/or key decision-makers across departments. This will also help to avoid data overload.

• Concentrate on indicators that are relevant to your firm

Don’t fall into the trap of collecting data that you won’t be able to act on in the near future. For example, if you know your organisation can’t handle the HR to employee ratio, you don’t have to waste time calculating and reporting on it.

• Determine which metrics apply to various departments and measure in accordance with them

Not every data point will apply to every corporate team member. Overtime hours, for example, will only apply to specific sorts of employees. Assess if KPIs are useful and strategic for each department.

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Importance of HR Metrics
Importance of HR Metrics | Most Widely Used HR Analytics Software

Common Human Resource Metrics

Time to Hire

The average time it takes to hire a new employee, from the moment the position is posted to the time they accept an employment offer. This may be calculated by adding the time for each individual hiring and dividing it by the number of new recruits in a particular time period.

Cost Per Hire

What does it cost you to recruit a new employee? This covers items like the recruiter’s time, the cost of posting a position on a third-party site, interviewing time, and so on.

Employee Churn

Every company desires a low staff turnover rate. If you constantly lose employees and must hire new ones, there may be a problem with your hiring or staffing process. Hang onto a handy watch on this number.

Revenue per Employee

It is quite simple to calculate your income per employee. Simply divide that company’s total income for the year by the number of employees. This statistic can also be used to specific departments.

Employee Billable Hours

This statistic may not be applicable to all organisations, but it is often applicable to enterprises that provide a professional service, such as marketing agency or law firms. Employees should monitor their time to allow you to measure this on an individual basis because not every employee will report hours that are directly billable to a customer. Essentially, the greater the number of billable hours per employee, the greater the company’s income.


Absenteeism refers to the amount of time your employees are absent from work for whatever reason (vacation, sick days, other). Absenteeism metrics are expressed as a proportion of the total number of possible working days.

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HR Costs per Employee

Hiring, training, and managing employees all cost money. You may calculate how much each employee spends on average for HR by looking at your HR expenses for the preceding month or year and then factoring in the number of people on your payroll. This will help you to make changes and save money.

Employee Involvement

Employee engagement is one of the most challenging indicators to measure since it cannot be discovered through financial data. You may distribute company-wide questionnaires to your staff and ask them to score their work experience on a scale of one to five. The findings may be averaged to determine your staff engagement level.

Training Costs per Employee

In most circumstances, the quality of a new employee’s training determines their performance. That training, though, comes at a cost. You must pay personnel to spend time training new employees, you may need to provide them with equipment and tools, and they may require some time before they are able to operate independently. Examine your training expenses and the amount of employees you’ve taught to determine how much each new trainee costs you.

Numbers for Diversity/EEOC

The diversity of your staff is more than simply a statistic; it might be the significant to your achievement. Race, ethnicity, job type, and remuneration are all examples of diversity. If your organisation is required to file an EEO-1 report with the Equal Employment Opportunities Commission, you should already have access to these indicators.

HR-To-Employee Ratio

Your HR to employee ratio indicates if your HR staff is appropriately scaling with the workforce you’re serving. The average HR to employee ratio is 2.6, and as the number of employees grows, the number of HR staff members decreases.

Turnover of New Hires

The proportion of new workers that leave the organisation within a given time period, generally 30 days, 90 days, or one year, is known as new hire turnover. It’s a useful indicator for evaluating the effectiveness of your hiring and onboarding tactics.

To calculate it, divide the total number of new hire separations by the total number of separations over that time period, then multiply by 100.

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Examples of Human Resource Metrics
Frequently Asked Questions (FAQ) – HR Metrics

Frequently Asked Questions (FAQ) – HR Metrics

What Are Some Examples Of Human Resource Metrics?

  1. Index of Training Effectiveness
  2. Training Effectiveness
  3. Employee Satisfaction
  4. Absence Rate per Manager
  5. Overtime Expense
  6. Index of Employee Productivity
  7. Training Costs per Employee

What Are HR KPI’s?

KPIs are called strategic indicators since they are directly related to the corporate strategy. HR KPIs show how HR is helping the rest of the organisation.

What Exactly Do You Mean By HR Metrics?

HR metrics are measurements that are used to gauge how effective HR is in carrying out its projects. These measures are as follows:

  1. Turnover
  2. Education
  3. Return on human capital
  4. Labor costs
  5. Employee expenses

What Are The Most Important HR Metrics?

  1. Manager Absence Rate
  2. Overtime Expense
  3. Index of Employee Productivity
  4. Training Expenses Per Employee
  5. Index of Training Effectiveness
  6. Training Effectiveness
  7. Employee Contentment

What Are Some Of The Most Widely Used HR Metrics And Analytics Software?

  1. IMB Kenexa
  2. Workforce Planning
  3. People Analytics
  4. Feedback
  5. TalentSoft Analytics
  6. Aurion
  7. Oracle HR Analytics
  8. Emplysight

Is HR Measurement Used In All Businesses?

HR measurements are increasingly prevalent in medium- to large-sized enterprises. This is because larger organisations often have more employees and a larger HR department, providing a wider pool from which to gather data. These businesses also have investors and vice presidents who want to know how the HR department is doing.

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How Might HR Analytics Aid In The Resolution Of Staffing Issues?

If your company is facing personnel challenges, the correct HR analytics may be able to assist you determine the source of the problem. However, because the data from your HR metrics will only be quantitative, you must be able to examine it on your own and establish the reason for any low numbers in your reports.

What Exactly Are “Soft” HR Metrics?

“Soft” HR measurements rely on qualitative rather than quantitative information. Soft metrics are identified through the collection of subjective employee replies. Workplace contentment, innovation, and morale are examples of soft HR metrics.

What Exactly Is An HR Metrics Dashboard?

A metrics dashboard is a web dashboard that displays all of your HR metrics in one place. You may utilise your HR software’s dashboard to update information and maintain all of your HR metrics in one location.

What Are The Most Often Used Recruitment Metrics?

HR departments evaluate their recruiting efforts using recruitment measures such as applicant competitiveness, cost per hire, quality of hiring, retention, and diversity.

What Exactly Is The Distinction Between HR Metrics And HR Analytics?

HR metrics track and quantify historical performance, whereas HR analytics analyse firm data to provide forecasts or insights.

Conclusion – HR Metrics

The job you do in human resources is critical to the success of your firm. However, without monitoring and tracking the key HR indicators, it can be impossible to determine if your work is making a difference or how you might enhance your efforts.

If you aren’t currently measuring any human resources metrics, meet with your executive and HR teams to determine which data you should start tracking right away. Keep it basic; there’s no need to run hundreds of reports straight immediately. If you are currently tracking HR indicators, double-check that all of your data is assisting your firm in meeting its objectives. Are there any metrics you should not be tracking? Do you need to add any reports? Don’t let the data pass you by without gaining vital information.

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