HR metrics, also known as key performance indicators (KPIs), are data points that help you understand your HR team or organization’s performance. HR KPIs can help you answer questions like:
- Is the business growing?
- Are we doing a good job attracting quality applicants?
- Are we doing a good job of retaining high-quality employees?
- Are our employee training programs effective?
The trouble is, there are thousands of KPIs that an HR pro can potentially monitor, so it can be hard to decipher which are most important and then figure out how to track them. In the HR world, there’s no apparent standard of metrics for HR functions—what is measured is dependent on what matters to each organization.
We know that what gets measured will get managed, and what’s managed will affect business goals. With that in mind, we’ve identified 17 crucial core metrics that your HR team should be tracking.In the HR world, there’s no apparent standard of metrics for HR functions—what is measured is dependent on what matters to each organization. Click To Tweet
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17 Core “Must-Track” Human Resource Metrics
- Employee turnover rate (voluntary and involuntary). Employee turnover rate is the percentage of employees who leave your organization during a given time period. Organizations typically calculate turnover rates annually or quarterly.
- New hire turnover. The percentage of employees who leave your organization during the beginning of their tenure there (typically within the first X months). This metric is used to assess the effectiveness of your recruitment policy and can indicate problems with the hiring process.
- Head count change. The number of people who are added or removed from your organization’s total head count. This is reflected by the number of employees at the beginning of the month vs. the number at the end, and helps you see what turnover is like at a high level.
- Employee demographics. This metric helps your HR team identify the types of people that comprise your workforce. It can help you better understand employee survey results, as we know that different identities and traits can impact our workplace experiences.
- Cost-per-hire. This is the total of all internal and external recruitment expenses divided by the total number of hires in a given period. This metric is crucial for understanding the efficiency of your hiring processes; it can also inform budgeting decisions.
- Time to fill. Also known as time to hire, this metric measures the time between the moment your eventual hire entered your pipeline (through sourcing or application) and the moment they accepted your job offer. It shows how fast you spotted your best candidate and moved them across the job’s pipeline.
- Absenteeism rate. Also known as absence rate or absence percentage, this is the rate of unplanned absence due to sickness or other causes. This metric can be measured for an individual, team, or the entire organization and gives information about the vitality of the organization.
- Benefit participation rate. This is the percentage of employees who are participating in a particular benefit plan or program. Each benefit has costs associated with it. This metric is important because if employees aren’t using certain benefits, they’re not worth the price tag.
- Full-time equivalents (FTE). An FTE is a unit of measurement used to figure out the number of full-time hours worked by all employees in a business. If your business considers 40 hours to be a full-time work week, then an employee working 40 hours per week would have an FTE of 1.0.
- HR to Employee ratio. This metric is the number of HR employees needed to support 100 full-time employees. It is used to provide a road map on when to scale the HR team along with the company workforce. A good rule of thumb to start is 1-1.5 HR employees per 100 full-time employees based on the level of services provided.
- Cost of HR per employee. This metric is the total compensation of your HR team members, or the portion of the job of the person who manages these HR duties divided by the number of employees on payroll. This metric helps assess the overall cost of HR support.
- Health care costs per employee. The total health insurance cost per employee paid by the employer. This metric includes not only health insurance, but vision and dental insurance as well.
- Recruiting yields ratio. This yield ratio metric is used to measure what percentage of applicants move from one stage to another in the hiring process. It can give you an idea of the success of your various recruiting methods and strategies.
- Time since last promotion. Time since last promotion is the number of months since an employee’s last promotion within your organization. It’s an important metric to consider if you’d like to keep employees satisfied and increase retention rates.
- Employee net promoter score (eNPS). This eNPS is a scoring system designed to help employers measure employee satisfaction and loyalty within their organizations. According to thoughtfarmer, this metric is usually measured by the question “On a scale from 1-10, how likely are you to recommend this organization as a place to work?” or “How likely are you to recommend our organization?” From here you can assign categories. Promoters score 9-10, passives score between 7-8, and detractors score below 6. Your eNPS can be calculated with a simple calculation: The percentage of detractors is subtracted from the percentage of promoters (eNPS = % of promoters – % of detractors). The percentage of passives is not included while calculating the score.
- Training completion rate. This metric is calculated by dividing the number of employees who have completed the training by the total number of employees who were scheduled to attend the training. It is used to measure the effectiveness of a company’s training programs.
- Employee goal tracking. Goal tracking is the process of establishing goals, determining the steps (objectives) needed to meet those goals, and then measuring progress toward those goals. We suggest using SMART goals—Specific, Measurable, Achievable, Relevant, and Time-Bound— to track and manage your employee goals.
How To Track HR Metrics
Many organizations have some sort of reporting system, like a portal or CRM, to help them track KPIs. However, even smaller companies that don’t have access to sophisticated tools can (and should!) be tracking the indicators we’ve listed above. However, you’re a busy HR manager, and while this type of reporting will work temporarily, I do recommend investing in a tool like a CRM to help you use the data you’re gathering. A CRM can be integrated into many facets of your organization and help you communicate about issues related to business growth in a clear, consistent way.
Get Help Managing & Monitoring The Things Most Important To You
Don’t track metrics just to track them. The HR metrics you’re focusing on should be put to work in order to help your entire organization grow and improve. However, sometimes you just don’t have the time or the knowledge to know what to do with all the information you’ve gathered. That’s where we come in.
At GenesisHR, we’re here to help you manage what you’re monitoring. We’ve spent 30+ years simplifying HR management for small and midsize businesses with expertise in strategic HR guidance, benefits, payroll, compliance, and more. Our clients choose to use us as their PEO because we take on the burden of HR tasks and let them focus on their mission. We’d love to help you, too! Contact us today to learn more about how we can help.