HR metrics

14 Essential HR Metrics 

Human resources metrics help a company track important data within the organization. A company can use these metrics to analyze processes and pinpoint the ones that need further optimization or improvements. can help you get the most out of the data you collect.

People analytics help management get a grip on the costs and benefits of HR processes. This article will introduce 14 essential HR metrics that are worth tracking for your organization.

1. Absence Rate

First of all, let’s track the unscheduled absence rate of your employees. Track both the number of times an employee is out of office and the total number of unscheduled absences per month. You can use this data to calculate the average absence rate and use that as a benchmark. Note that this rate differs on a monthly basis. Expect an average rate of 1% to 2% monthly.

The absence rate gives the HR department insights into the well-being of employees. An increased absence rate over a longer period indicates that there’s increased stress among employees—or perhaps a flu epidemic.

2. Employee Wellness

In addition to measuring the absence rate, you can track metrics on employee wellness. For example, you can track the number of employees who smoke or who use the company discount on gym memberships. In short, it’s important to have an overview of the physical, mental, and emotional state of your employees.

3. Overtime Rate

By keeping track of the number of hours employees work overtime, you can determine the need for hiring extra personnel. If the number of worked overtime hours stays high for a couple of months in a row, this clearly indicates the need for extra resources. For example, during the audit season, accounting firms work longer hours because most of the work is concentrated in a few months’ time.

4. Turnover Rate

It’s definitely worth it to track the turnover rate for your company. First of all, turnover isn’t necessarily a bad thing. Some employees turn out not to fit the company culture and resign for this reason. This is a positive example of turnover.

However, you should also track the turnover rate of key talent by identifying the people in your company who have high potential or high impact. If the turnover rate for key talent is high, this indicates that there aren’t enough growth opportunities within the company. Also, it can indicate that there are internal struggles or conflicts that need to be resolved first.

5. Time to Hire

For recruitment purposes, it makes sense to keep track of the number of days it takes for HR to go from opening a job position to hiring a new employee. Of course, there’s no need to rush the hiring process. Some roles are hard to fill and require more time to be closed. However, this metric can expose a slow hiring process if the time to hire is high for most of the open positions.

In short, this metric tells the HR team if they offer attractive benefits and use the right recruitment tools. Another conclusion suggests the HR team is looking for new employees in the wrong places. Further analysis should expose the root cause of a slow hiring process.

6. Annual Recruitment Costs

Besides measuring the time to hire, you also want to measure the total spending on recruiting. For example, you might be using some sort of recruiting software, paid advertising, or LinkedIn premium membership. All these costs can add up and result in a higher total recruitment cost than expected.

It’s also worth it to track the number of hours employees spend on recruiting, as this also contributes to the total recruitment costs.

7. Offer Acceptance Ratio

When speaking about recruiting, it’s worth tracking how often a job offer gets accepted. If many potential employees decline the offer, that indicates you have to revisit the employee benefits or wages. For many industries, it makes sense to aim for a 75% to 90% job acceptance rate.

8. Mis-hire Rate

The turnover rate and the mis-hire rate aren’t exactly the same thing. It’s not uncommon that a new employee leaves during the first 90 days. Sometimes an employee just doesn’t fit into the company culture, or the job duties are not what the employee expected or hoped they would be. Also, a new employee might not perform as expected, and your organization decides to let that person go. By tracking the mis-hire rate, you can determine the quality of the hiring process.

9. Performance Measuring

Measuring performance isn’t an easy concept, as it’s very subjective. However, to remove as many subjective observations as possible, you can use the 9-box grid technique. This technique maps users based on performance and potential. Both performance and potential have three levels (low, moderate, or high), so that’s how you get a 9-box grid.

You can use these performance and potential measurements to determine which employees are key people in the company. The measurements also help you pinpoint the turnover rate of key talent, which we discussed in point four.

10. Time to Productivity

To determine the quality of newly hired employees, you can measure the time needed for an employee to become productive. You can do this by counting the days between the starting date and the date the employee reaches satisfactory productivity.

Want to learn more about starting an insights-driven culture? Read Neebo’s blog entry about nurturing curiosity.

11. Job Satisfaction

Measuring job satisfaction through a survey on a regular basis helps you to determine how employees feel about the company. You may learn that employees have been doing the same work for years and want to spice up their workloads with some new tasks. Or you might find out that employees think the job does not challenge them enough. You can learn more about the importance of job satisfaction in this article by Zarin Bathena.

Job satisfaction is a great HR metric for detecting employee problems and helps reduce the turnover rate.

12. Training Costs per Employee

This metric helps you track the costs of training employees, including travel expenses.

If you know as an organization how much you spend on educating employees, you can determine if it’s worth it. Of course, it’s not easy to track the effects of training. It might make sense to ask for feedback from team leaders to see if they’ve noticed changes in the productivity or quality of employees’ work.

13. Learning Participation Rate

The learning participation rate metric is closely linked to tracking training costs. The learning participation rate measures how many employees voluntarily participate in professional learning courses. It’s an important metric, as it relates directly to employee engagement.

If the learning participation ratio is low, the quality of the courses might be low, or perhaps employees aren’t motivated to spend time learning new skills.

14. Compensation-Revenue Ratio

The compensation-revenue ratio metric tracks if a company can continue handing out raises and extra benefits to employees based on the company’s revenue. It’s important for the company to determine if it can sustain this ratio. By tracking this metric, you might find out that you’re handing out raises too quickly and need to slow down.

Measuring the Unknown

If you’re thinking that it won’t be easy to start measuring all these metrics at once, I understand—you’re absolutely right! If you run a small HR department, you could start small by measuring new metrics one by one. Also, it might make sense to create a process for evaluating new metrics and then determine how to track them. Tracking certain metrics can be tricky. For example, tracking employee performance is a difficult metric, as it’s not straightforward. You can do this using surveys, although they still give slightly subjective results. It’s therefore important to review which data you want to track to satisfy a certain metric. Your data might be locked in different systems across the company, use Neebo to access and bring these data together and start building these metrics.

Good luck with implementing the above metrics!

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