The 30+ Most Important HR Metrics You Need to Track

After many unstable years of quiet quitting and a progressively competitive labour market, the drive for better workforce analytics data and HR metrics has never been stronger.

HR metrics such as Employee Net Promoter Score (ENPS)* offer valuable insights into your workforce, how your HR strategies are working, and how motivated or happy your team is. Key HR metrics like turnover data, employee satisfaction and organisational performance are important for human resources departments to understand the behaviours of their workforce. Teams also need to navigate a variety of evolving factors.

Not having a grasp on this data leaves your business vulnerable to poor decision-making. Plus, not knowing how your employees really feel could leave you blindsided and negatively impact your retention efforts.

We’ve created this guide to help you understand what HR metrics are, the best ones to track and 30 essential HR metrics examples you can start measuring today.

*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.

What are HR metrics?

HR metrics include data points, such as KPIs, that are used to measure how effectively an organization manages its workforce. They help human resources departments make effective, data-driven decisions for employee performance metrics, hiring, absence rates, and turnover.

Key HR metrics help you monitor your workforce. They provide detail on the effectiveness of your HR activities to see if processes are working well and help you identify areas to improve.

Metric tracking—including what’s working well, what needs improvement, and what trends to expect in the future—helps organizations measure their HR success.

What are key performance indictors (KPIs)?

HR key performance indicators (KPIs) 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, for example, decreasing time to hire by 25% in a calendar year. Some examples of KPIs are:

• Recruitment metrics: Such as time to hire, cost per hire, offer acceptance rate, and quality of hire
• Retention and turnover metrics: Turnover rate, retention rate, attrition rate.
• Performance and productivity metrics: Revenue per employee, absenteeism rate, performance rating distribution, goal achievement rate.
• Engagement & satisfaction metrics: Employee engagement score, eNPS (Employee Net Promoter Score), employee satisfaction index, and absenteeism rate.
• Learning & development metrics: Training cost per employee, training completion rate, skill gap reduction, post-training performance improvement, and training effectiveness.
• Compensation & cost metrics: Labour cost as a percentage of revenue, compensation ratio (compa-ratio), overtime costs, and benefits utilization rate.
• Diversity, equity & compliance metrics: Diversity representation ratios, pay equity metrics, promotion rates by demographic, and compliance incident rate.

How to define KPIs

Measuring workforce analytics and HR metrics, and their effect on your organization, is critical. They’re no longer optional extras, but a must for any HR team building a solid, data-driven management strategy.

Your HR metrics and KPIs should concentrate on your organizational direction, as they help establish where your business should direct its efforts. If your company hopes to make informed, strategic choices for the future, HR metrics should be a piece of that puzzle.

You need to ensure HR KPIs are:

• Relevant: Must link to business objectives
• Quantifiable: Able to be expressed numerically
• Strategic: Must merge with the long-term vision of the business
• Specific: They should be clear, with no ambiguity
• Achievable: Realistic goals that are attainable
• Relevant: Must add value to decision-making
• Time-specific: A timeframe for completion.

30 key HR metrics

Let’s look at 30 essential key HR metrics your team should focus on to measure performance. They can be crucial to strategic decision-making, helping you to make informed decisions.

HR service and software metrics

1. Cost of HR per employee: The total organizational spend on HR activity divided by the total employee figure.
2. HR software employee participation rate: The total number of employees who use your HR employee management software, divided by the total employees. This can then be multiplied by 100 to get a percentage.
3. Ratio of HR professionals to other employees: The number of employees in your organization per HR professional on your team.
4. ROI of HR software: The difference between how much the software costs your organization and how much money it generates or saves.

HR 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 staff member. You can calculate this number by totalling internal and external hiring costs and dividing by the number of hired employees during a certain 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. Employee turnover rate: 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, measured by role-specific KPIs.

Employee engagement and 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. This can be measured using tools like eNPS*.
2. Retention rate: Divide the number of employees who remained in your organization over a given period by the number of total employees—the opposite of turnover rate.
3. Retention rate per manager: The retention rate is broken down by individual teams and managers.
4. Time since last promotion: The length of time in months between the last internal promotion, which can be useful in determining why talent leaves your organization
5. Talent turnover rate: The rate of turnover among your organization’s high-performing and high-potential employees.
6. 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)
7. Voluntary turnover rate: The employee turnover rate includes 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 HR metrics

1. Absence rate: The average number of days employees are absent during a certain time, excluding approved PTO (also known as absenteeism). An absence management system should make this easily trackable, for sick leave days, for example.
2. Absence rate per manager: The absence rate is broken down by individual teams and managers.
3. Overtime  hours:  The number of overtime hours worked by employees in a specific time.
4. Time to productivity: The time it takes for new employees to reach expected performance levels.
5. Average hours worked: The average number of hours worked by employees in a set period.

Employee performance 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 peer evaluations, self-appraisals, manager appraisals, or a mix of all three.
3. Goal tracking: Monitor progress on employee goals and how these goals connect to larger company goals.
4. Performance and potential: Tools like the nine-box model allow you to categorize employees according to their performance for better succession and leadership planning.
5. Revenue per employee: The total amount of revenue divided by the total number of employees.

Training effectiveness and development metrics

1. Training completion rate: The number of employees who completed a given training program divided by the total number of employees. You then times this by 100 to get the 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 lots of methods for measuring how effective training is, like running examinations with a pass or fail scoring system
4. Training expenses per employee: The total cost of your organization’s training resources divided by the total number of employees.

What are HR analytics tools?

HR analytics tools are software platforms that help analyse and quantify company data to provide valuable insights. They help transform complex data about your company into user-friendly reports, allowing you to make confident decisions for next steps.

BambooHR offers HR metrics and analytical tools to take the guesswork out of people management. Our eNPS surveys can help to shed some light on employee experience and satisfaction within your organization.

Tracking key HR metrics saves HR departments valuable company time. With automated reports, harness AI with our automatic reporting capabilities to organize and aggregate the results to see employee suggestions. You can quickly and easily prepare for meetings, stay up to date with HR performance via human resource metrics, and establish clear goals to ensure that the company can grow sustainably.

How to make your HR data work for you

Data is a valuable business currency. The Society of Human Resource Management (SHRM) suggests that the challenge isn’t acquiring more data; it’s filtering out the useful insights. Producing lots of data can bring a false sense of productivity—don’t get caught in the trap of collecting workforce analytics for the sake of it.

• Identify valuable data. Valuable versus non-valuable data comes down to how it connects to business outcomes. The four main metrics to track relate to employee engagement metrics, value retention, success factors, and the health of your workforce.
• 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.
• Apply data to decision-making. Your data needs to inform action—you shouldn’t collect it just for the sake of it. For example, if you’re using data to identify why employees leave, use these insights to improve the issues driving away talent.
• Determine your own goals and targets. Every organization has unique goals and targets. For example, there’s no magic formula for deciding the best staff development cost. Set clear goals for each metric that reflect your organization’s unique needs.

HR metrics FAQs

Why are HR metrics important?

Key HR metrics are important because they provide you with 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 you need to be aware of.

What’s the difference between HR metrics and KPIs?

The difference between HR metrics and KPIs is that HR metrics track and report HR activities and trends, such as turnover and absence rates. Meanwhile, KPIs choose a set of important metrics directly linked to business goals and are used to measure HR’s impact on the organization.

How often should HR metrics be measured?

HR metrics need reviewing often, for example, annually, bi-annually, and quarterly. Having clear, succinct, and consistently measured HR metrics can ensure nothing important is missed, and trends can be kept up with, such as:

• employee satisfaction
• business expenses
• team productivity
• overall costs.

Why measure HR effectiveness?

It’s important to measure HR effectiveness because it can be helpful for addressing staffing issues. By analyzing HR KPIs, you can gain valuable insights into various aspects of your workforce.

Get ahead in HR by tracking powerful metrics

We all know that investing in your people is important for any company to succeed. But, without tracking key workforce analytics, it’s difficult to measure whether you’re making a difference or need to reevaluate your plans.

If you aren’t measuring HR metrics, sit down with your executives and HR teams and identify which data you need to start tracking today. If you've already started, double-check that all your data is helping your organization reach its goals.