What Are Metrics?
Metrics are measures of quantitative assessment commonly used for assessing,
comparing, and tracking performance or production.
Metrics are numbers that tell you important information about a process under
question. They tell you accurate measurements about how the process is
functioning and provide base for you to suggest improvements.
It is said that only when one can express their understanding in terms of numbers is
the understanding satisfactory and meaningful.
A business metric is a quantifiable measure used to track and assess the status or
performance of a specific business function. Metrics are used to measure progress
toward short and long-term goals and objectives.
Every area of the business has specific metrics to monitor:
Finance teams track revenue metrics like MRR or customer acquisition cost
Executive teams track big-picture business metrics like customer lifetime
value or annual recurring revenue
Marketing teams track campaign performance and program statistics with
engagement rates and marketing-qualified leads
Sales team track won opportunities and expansion revenue
What Are HR Metrics?
HR metrics (or human resource metrics) are key data points that help organizations
track their human capital and measure how effective their human resources
initiatives are.
HR Metrics are used to gauge the effectiveness of various HR responsibilities and
initiatives such as hiring, employee retention, training, and labor costs. Human
resources departments can use these metrics to improve their efficiency and
demonstrate the value of their activities to upper management.
Types of HR Metrics
HR Service and Software Metrics
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.
Ratio of HR Professionals to Employees: The number of employees in
your organization per HR professional on your team.
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.
Recruitment Metrics
Acceptance Rate: The number of offer letters your organization extends
divided by the number of candidates who accept an offer.
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.
Demographics: The characteristics of your workforce such as age, gender,
education level, and length of service.
Headcount: The total number of employees in your organization or within a
specific department you may be tracking.
New-Hire Turnover: The number of new hires who leave within a set
period of time, such as within their first year of employment.
Time to Hire: The average number of days between when a job is posted
and when a candidate accepts your offer.
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
Employee Satisfaction: The number of employees who would recommend your
company as a good place to work versus the number of employees who wouldn’t,
indicating overall employees satisfaction (an employee Net Promoter System* like
ours can help you measure this). Employee satisfaction is an important factor in
employee motivation, employee goal achievement, cost savings, customer
satisfaction, positive employee morale, and more in the workplace. To improve
work environment quality, employee retention and productivity rates consider
measuring this HR metric regularly.
Ask an employee to answer the following questions on a scale from 0 to 10:
1. How satisfied are you with your current workplace?
2. How well does your current workplace meet your expectations?
3. How close is your current workplace to the ideal one?
Add these three figures and insert them into the following formula:
Employee satisfaction = ((score sum / 3) – 1) / 9 X 100%
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.
Retention Rate per Manager: The retention rate broken down by
individual teams and managers.
Talent Turnover Rate: The rate of turnover among your organization’s
high-performing and high-potential employees.
Total 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 come up with a percentage).
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
Absence Rate: The average number of days employees are absent in a given
time period, not including approved PTO (also called absenteeism).
Absence or absenteeism rate is the rate of unplanned absence due to sickness
or other causes, that usually include mental health issues, workplace
bullying, family issues and others. While monthly absenteeism rates may
differ, long-term rates equal to about 1-2% are considered normal. Growing
absenteeism rates usually indicate increased stress or a flu epidemic.
Individual absenteeism rate = (number of absent days / number of workdays in
a given period) X 100%
Team absenteeism rate = number of absent days / (average number of employees
X number of workdays) X 100%
To track employee absences and leave balances, consider absence management
software like actiPLANS.
Absence Rate per Manager: The absence rate broken down by individual
teams and managers.
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. Excessive overtime is one of the reasons for absenteeism. After your
team works overtime for a few days or even weeks in a row, they are very likely to
take unplanned absences or even leave the company. If overtime levels are
consistently high, consider hiring more employees.
To keep track of working time and overtime, automate PTO calculations, manage
time across tasks, projects and clients, consider time tracking software
like actiTIME.
Used vacation days
Poor work-life balance is one of the most common reasons for employee
absenteeism. Luckily, HR managers can use absence management systems to see
how many vacation days have been offered to an employee and how many of them
they have used during a year or half a year. This way, HR managers can determine
if employees have a healthy work-life balance and if not, help them achieve it.
Percentage of vacation days used = (number of vacation days used / number of
vacation days offered) X 100%
Performance Management Metrics
Company Performance: A high-level comparison of how well employees
are performing versus how engaged and valued they feel.
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.
Performance and Potential: The nine-box model that allows you to
categorize employees according to their performance and potential levels for
better succession and leadership planning.
Revenue per Employee: The total amount of revenue divided by the total
number of employees.
Training and Development Metrics
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.
Training Expenses per Employee: The total cost of your organization’s
training courses and programs divided by the total number of employees.
Benefits Of Using HR Metrics
Periodically tracking HR metrics and using insights to work on personnel
development can provide a range of benefits. Some include:
Improving recruiting, onboarding, training and remuneration processes
relating to the human resources of an enterprise
Estimating the effects of modifications to activities and processes, such as
personal time-off policies, benefits adjustments, reorganisation of teams and
overtime work hours
Enhancing return on investment of HR initiatives including engagement,
wellness, financial planning and employee performance
