The 29 Most Important HR Metrics You Need to Track

After several turbulent years of quiet quitting, mass resignations, and an increasingly competitive job market, businesses are now realizing that their greatest assets are their workforce and their culture. The drive for better people data and HR analytics has never been stronger.

This echoes our recent survey: We found that 82% of executives agree that HR metrics are useful for their organization—and nearly one-third want to see more frequent reports from HR teams.

We’ve created this guide to help you understand the basics of HR metrics—together with 29 essential HR metrics you can start measuring today.

Our employee management software also makes it easier for you to build an organized, secure database for your HR analytics activities, and export data-driven reports—no technical experience required.

What Are HR Metrics?

HR metrics (or human resource metrics) are key data points that help you track your organization’s human capital. They show you how well your HR strategies and initiatives are performing, and areas that need improvement.

Measuring this human resource management data—including what’s working well, what needs improvement, and what trends to expect in the future—helps organizations track their HR success.

How to Define and Track the Best HR KPIs

Your KPIs, or key performance indicators, are the data points you monitor and communicate across your organization. These consist of your HR metrics but may also link to specific goals that indicate your team’s progress.

Our report also found that both HR professionals and executives agree that measuring HR metrics and its effects on an organization are critical. This means workforce metrics are no longer nice-to-haves—they are a must for any HR team looking to build a solid, data-driven management strategy.

Your HR Metrics and KPIs Should Focus on Your Strategic Vision

Focusing your HR metrics and KPIs around your strategic vision is important as it helps to establish where your organization should direct their efforts. For example, in our survey, a whopping 87% of respondents said HR reporting metrics directly influence their organization’s strategy. If your organization hopes to make informed, strategic choices for the future, HR metrics therefore need to be a piece of that puzzle.

What Do Executives Really Want to See in Reports?

Although many HR professionals acknowledge the importance of HR metrics, HR teams aren’t delivering as much information as their executive teams would like. For example, among the non-HR executives we surveyed, nearly one-third said their HR team doesn’t report often enough, and 16% said they have no idea how often their HR team reports.

Clearly, there’s room for improvement for a lot of organizations. Understanding your executive team's reporting needs, and meeting them, can open doors for your team to become more strategic within your organization.

Every organization is different, so your HR reporting strategy will depend on the size of your company, priorities, and the structure of your HR team. Collaboration is key to understanding which metrics are most relevant now and in the future.

How to Maximize Retention: The Essential KPIs You Can’t Ignore

We asked executives and professionals what HR reports they currently use to measure the impact of HR, and which ones they wish they had. Here’s what we found:

• Employee satisfaction came first as the most desired report for nearly a quarter of respondents.
• 20% of respondents selected HR employee engagement tracking.

While employee engagement and satisfaction often have some crossover, they are critically different. For example, satisfied employees aren’t always engaged at work, and vice versa.

Other Essential Metrics to Consider:

• Cost per hire can give you insight into how much your company spends on average to recruit and hire a new employee. This can help you gauge how efficient and effective your hiring process is.

• Absenteeism rate can help you investigate any unscheduled absences from work. For example, it can highlight employee challenges such as workplace dissatisfaction, work commitment,health and wellbeing.

• Employee growth rate can give you a clearer picture of whether your company is shrinking or growing in terms of workforce. This can help influence your workforce planning.

• Employee experience can help you to understand what’s working well and identify any areas for improvement.

Are your HR initiatives making employees happier and more engaged? Or could they be acting as a barrier to productivity? HR data and metrics can help answer these questions. We’ve gathered the 29 most important metrics for you to track.

The 29 Most Important HR Metrics

Now that we’ve covered the basics, let’s look at the 29 essential HR metrics your team should focus on to measure performance. We’ve broken these down into key categories:

HR Service and Software Metrics

1. Cost of HR per Employee:  The total amount your organization spends on HR functions divided by the total number of employees.
2. HR Software Employee Participation Rate:  The number of employees who actively use your HR software divided by the total number of employees, multiplied by 100 to get a percentage.
3. Ratio of HR Rrofessionals to Other Employees:  The number of employees in your organization per HR professional on your team.
4. ROI of HR Eoftware:  There are several factors that contribute to the ROI of your HR software, but the core formula is the difference between how much the software costs your organization and how much money it generates or saves your organization.

Recruitment Metrics

1. Acceptance Rate:  The number of offer letters your organization extends divided by the number of candidates who accept an offer.
2. Cost per Hire:  The average cost of hiring a new employee. You can generate this number by adding up both internal and external hiring costs then dividing that total by the number of employees you hired in a given period.
3. Demographics:  The characteristics of your workforce such as age, gender, education level, and length of service.
4. Headcount:  The total number of employees in your organization or within a specific department you may be tracking.
5. New-Hire Turnover:  The number of new hires who leave within a set period of time, such as within their first year of employment.
6. Time to Hire:  The average number of days between when a job is posted and when a candidate accepts your offer.
7. Time to Productivity:  The time it takes for new hires to become acclimated at your organization and start working at full productivity.

Engagement and Employee Retention Metrics

1. Employee Satisfaction:  The number of employees who’d recommend your company as a good place to work versus the number of employees who wouldn’t, indicating overall employees satisfaction. This can be measured using tools like eNPS*.
2. Retention Rate:  The opposite of your turnover rate in that you divide the number of employees who remained in your organization over a given period by the number of total employees.
3. Retention Rate per Manager:  The retention rate broken down by individual teams and managers.
4. Talent Turnover Rate:  The rate of turnover among your organization’s high-performing and high-potential employees.
5. Total Turnover Rate:  The number of employees who leave your organization within a given period divided by the average number of total employees (then multiplied by 100 to come up with a percentage).
6. Voluntary Turnover Rate:  The turnover rate including only those employees who leave your organization voluntarily.

*Net Promoter, NPS, and the NPS-related emoticons are registered trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.

Time Tracking Metrics

1. Absence Rate:  The average number of days employees are absent in a given time period, not including approved PTO (also known as absenteeism). Your absence management system should make this easy to track.
2. Absence Rate per Manager:  The absence rate broken down by individual teams and managers.
3. Overtime Hours:  The number of overtime hours worked by employees in a given time period. You can calculate an average number or break it down by individual employees.

Performance Management Metrics

1. Company Performance:  A high-level comparison of how well employees are performing versus how engaged and valued they feel.
2. Employee Performance:  You can track employee performance through self-assessments, peer reviews, manager assessments, or a combination of all three.
3. Goal Tracking:  If your performance management software includes goal tracking, you can see the goals employees have set, how these goals connect to larger company goals, and the progress employees have made.
4. Performance and Potential:  Tools like the nine-box model allow you to categorize employees according to their performance and potential levels for better succession and leadership planning.
5. Revenue per Employee:  The total amount of revenue divided by the total number of employees.

Training and Development Metrics

1. Training Completion Rate:  The number of employees who completed a given training divided by the total number of employees, then multiplied by 100 to get a percentage.
2. Time to Completion: The average amount of time it takes for an employee to complete a given training program.
3. Training Effectiveness:  There are several methods for measuring training effectiveness, including running tests or assessments to generate a pass/fail rate.
4. Training Expenses per Employee:  The total cost of your organization’s training courses and programs divided by the total number of employees.

What Are HR Analytics Tools?

Now that you’ve measured your HR metrics, what’s the next step? Here’s where HR analytics tools come to play. They help transform complex data about your company into user-friendly reports.

This saves HR departments hours or even days of valuable company time. With automated reports, you can quickly and easily prepare for meetings, stay up to date with HR performance, and establish clear goals to ensure that the company can grow sustainably.

How to Make Your HR Data Work for You

If you want HR metrics to have a real impact, the Society of Human Resource Management (SHRM) recommends implementing these four best practices:

Analyze your data and draw conclusions from it.  Producing lots of data can bring a false sense of productivity—don’t get caught in the trap of collecting data for the sake of it. As SHRM explains, “It is the insight that produces value, not the metric itself.” Therefore, use these insights to drive decisions.

HR metrics help your organization make better, more informed decisions.  If you find yourself reporting on data that doesn’t contribute to larger decisions, it may be time to adjust your reporting strategy. After all, the report states, “Any metric that does not lead to action is not worth the time and effort to calculate and report it.”

Identify the right audience for each HR metric.  Not every team will find the HR metric reports you generate relevant to their department. Certain metrics such as new-hire turnover, and time-to-hire may be more fitting for your recruiting team compared to middle managers. SHRM reminds us “[d]on’t waste anyone’s time with people metrics and analytics that are not relevant to their responsibilities and decisions.”

Your organization must determine its own goals and targets.  Every organization is different. There’s no one-size-fits-all formula for determining the ideal staff training cost. Set specific, measurable goals for each metric that reflect your organization’s unique needs.

Tap into HR Analytics

HR analytics tools can give companies of all sizes insight into their operations, retention rate, and hiring decisions. These tools can help water down data and turn it into actionable HR reports. The tools are ideal for any company of any size and in any industry. For example:

• Large corporations like Google use HR analytics to evaluate department productivity, effectiveness and employee experience.
• Major retailers such as Walmart leverage HR performance metrics and analytics to assess how employee enrollment and promotion programs are being rolled out across stores nationwide. They also use this data to develop customized career paths for employees to grow within the company.
• Tech giants like Microsoft leverage HR analytics tools like their total rewards portal (TRP) to help employees understand their value and improve their engagement, retention and increased quality of new hires.

The types of HR analytics tools you need can largely depend on how your company operates and what different departments want to gather.

Examples of How Companies Use HR Analytics

Jennifer Fisher | Director of People and Culture, International Scholarship and Tuition Services (ISTS)

Jennifer Fisher uses performance management reporting from BambooHR to align employees with company goals. The reports give her organization “better visibility into where everyone is. If everyone is going in the same direction, we are so much more productive. If everyone is meeting their goals, that means our company is most likely meeting its goals.”

Jessica Neal | HR General Manager, American Cedar & Millwork

Jessica Neal uses time tracking reports to streamline scheduling between employees and managers. She explains, “If managers wanted overtime reports before, I had to manually go into our system and access [the report] for them. I couldn’t give them access to some things without giving them access to everything. Now I can give them access to reports for their own employees.” This has seen a reduction in overtime by up to 30%

Emily White | Director of HR, New Moms

Emily White has leveraged HR analytics tools to secure important grant funding by showcasing a dramatic improvement in turnover rates.

She explains, “our grant writer was asking me for a turnover rate, and I was able to give her not just the turnover rate, but also the narrative of how our turnover rate has gone down by a factor of four over the past three years.”

Get Ahead in HR by Tracking Powerful Metrics

The work you put in human resources is essential to company success. But without tracking key HR metrics, it’s difficult to measure whether you’re making a difference or need to reevaluate your plans.

If you aren’t measuring any human resources metrics right now, sit down with your executive and HR teams and identify which data you need to start tracking today. If you're already measuring some HR metrics, double-check that all your data is helping your organization reach its goals.

FAQs About HR Metrics

Why are HR metrics Important?

HR metrics, specifically people metrics, gives you the data you need to create a solid people strategy. They help you identify successful areas of the business, areas where you can improve, and any future trends on the way.

What Are Some HR Metrics That Matter?

There are a range of important HR metrics you can look at. These workforce metrics fall under the following categories: HR Service & Software, Training & Development, Employee Value & Performance, Time Tracking, Engagement & Retention and Recruitment. All of these can benefit from having HR metrics against them.

How Frequently Should HR Metrics Be Measured?

HR metrics should be measured regularly and often. Weekly or monthly would be good options your schedule allows. Having clear, concise and regular HR metrics can ensure nothing vital gets missed and trends can be followed such as:

1. Employee happiness
2. Expenses
3. Productivity
4. Costs.

If these metrics are measured sporadically, important information can be missed or slip through the cracks.

Can HR Metrics Help Address Staffing Problems?

Yes! By studying metrics such as productivity, employee satisfaction, and absences, you can identify any staffing issues that may arise and make informed decisions from this data.