What Are HR Metrics?

HR metrics, or human resources metrics, are key figures that help organizations track
their human capital and measure how effective their human resources initiatives are.
Examples of such data include turnover, cost-per-hire, benefits participation rate, and
others (we’ll get into more of them later). Measuring this kind of information—what’s
working well, what needs improvement, and what trends to expect in the
future—helps organizations figure out their people strategy.

Why HR Metrics Matter

In a recent study, we found that both executives and HR

professionals agree that measuring HR and its impact on an
organization is critical. In fact, many executives want to hear from
their HR teams more frequently and with more detailed HR reports.

What this means is that HR metrics are no longer

nice-to-haves—they are a must for any HR team that wants to help
build a solid, data-driven management strategy for their
organization.

What Are the Most Important HR Metrics?

There is no shortage of things to measure in HR, from headcount to

benefits participation. But what data will give your organization the
insights it needs to grow and succeed? We’ve compiled a list of some
of the most important HR metrics and formulas to monitor in your
company.

Your specific reporting strategy will depend on your organization’s

size, priorities, HR team, and more. It’s important to collaborate with
your executive team to understand what HR metrics are most
important for your company right now, as well as what might be
important in the future.

Recruitment

• Headcount: The total number of employees in your organization or

within a specific department you may be tracking.

• Demographics: The characteristics of your workforce such as age,

gender, education level, and length of service.

• Time to Hire: The number of days between when a job is posted and
when a candidate accepts your offer.

• Acceptance Rate: The number of offer letters your organization

extends divided by the number of candidates who accept an offer.

• Cost per Hire: The cost of hiring a new employee. You can generate
an average cost per hire by adding up internal and external
recruiting costs for a defined date range, then dividing the total by
the number of employees hired in that period.

• Time to Productivity: The time it takes for a new hire to become

acclimated at your organization and start contributing at a normal
productivity level.

• New-Hire Turnover: The number of new hires who leave within a set
period of time, such as within their first year of employment.

Engagement & Retention

• Employee Net Promoter Score*: The number of employees who

would recommend your company as a good place to work versus the
number of employees who wouldn’t, which is one indicator of overall
employee engagement (and it’s one of the insights provided by
BambooHR® Employee Satisfaction).

• Turnover Rate: The number of employees who leave your

organization within a given period of time, divided by the average
number of total employees, then multiplied by 100 to provide a
percentage. Turnover can be calculated for the entire organization,
or broken down by department or manager.

• Voluntary Turnover Rate: The turnover rate calculated using only

those employees who leave your organization voluntarily.

• Talent Turnover Rate: The rate of turnover among your

organization’s highest-performing and/or highest-potential
employees.

• Retention Rate: The opposite of your turnover rate, arrived at by

dividing the number of employees who remain in your organization
over a given period by the number of total employees.

*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

• Absence Rate: The average number of days employees are absent in

a given time period, not including approved PTO (also called
absenteeism). This rate can be further refined by manager, position,
or department, or broken out over time, e.g., per month or per
quarter.

• Overtime Hours: The number of overtime hours worked by

employees in a given time period. You can calculate the average
number or break it down by individual employees.

Employee Value & Performance

• Revenue per Employee: The total amount of revenue divided by the

total number of employees.

• Performance & Potential: A nine-box matrix that allows you to

categorize employees according to their performance and potential
levels for better succession and leadership planning.

• Employee Performance: You can track employee performance

through self-assessments, peer reviews, manager assessments, or a
combination of all three.

• 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.

• Company Performance: A high-level comparison of how well

em-ployees are performing versus how engaged and valued they
feel. (This is one of the snazzy reports you’ll find in BambooHR!)

Training & Development

• Training Expenses per Employee: The total cost of your

organization’s training courses and programs divided by the total
number of employees.

• 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.

• Time to Completion: The average amount of time it takes for an

employee to complete a given training program.

• Training Effectiveness: There are several methods for measuring

training effectiveness, including running tests or assessments to
generate a pass/fail rate.

HR Service & Software

• Ratio of HR Professionals to Employees: The number of employees

in your organization per HR professional on your team.

• Cost of HR per Employee: The total amount your organization

spends on HR functions divided by the total number of employees.

• 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.

• ROI of HR Software: 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.