hr metrics assignment

16 Important HR Metrics to Track

Data allows HR teams to make smarter human capital decisions.

HR metrics are data points that help businesses better manage their most valuable resource: their people . By analyzing data, HR professionals can develop well-informed strategies to increase employee engagement , improve their hiring efforts and improve the efficiency of their operations.

HR Metrics Definition

HR (human resources) metrics measure an organization’s personnel management strategies. Metrics such as turnover rate, time-to-hire and workforce diversity can help HR leaders identify areas for improvement and track the effectiveness of HR initiatives.

What Are HR Metrics?

HR metrics are data indicators that assess the health of the organization and signal areas that could benefit from HR intervention. Metrics can also measure the efficiency and effectiveness of those HR efforts over time.

“It draws a very direct connection from what HR is doing to what the business wants to focus on ... and how HR is helping to move the organization in that direction,” Christy Pruitt-Haynes, distinguished faculty at organizational research and consulting firm NeuroLeadership Institute , told Built In. 

HR metrics consist of quantitative data, like the percentage of employees who leave the organization in a year, and qualitative data, like employee survey responses. The latter is an example of “soft metrics,” which can be helpful for explaining quantitative data points.

“The qualitative data helps to give the context,” Noelle London, founder and CEO of HR insights software company Illoominus , told Built In. “Any of that data on its own will be challenging to give you the whole picture.”

HR professionals can use metrics insights on a number of fronts ranging from recruiting to employee engagement . Below are some of the most important HR metrics to track.

Talent Acquisition Metrics

1. cost-per-hire.

Cost-per-hire measures how much money is spent on recruiting and hiring. This could include the cost of advertising the position, the recruiter’s time, travel expenses and referral bonuses . This metric is helpful in budgeting recruiting expenses, and it can also gauge the efficiency of a company’s recruiting operations. Some companies may be willing to pay a higher cost-per-hire if they are hiring quality candidates in a competitive industry.

2. Time-to-Hire

Time-to-hire is the time it takes a candidate to go through the hiring process , from submitting their application to accepting the offer. This is an important metric to track, because candidates may lose interest or accept another job offer if they feel the hiring process is dragging. Another way of measuring the efficiency of the hiring process is through time-to-fill, which measures the time from the position being posted to an applicant accepting the position.

3. Quality-of-Hire

Timeliness is important, but not as important as hiring the right candidate. That’s why quality-of-hire has been called “ the holy grail ” of recruiting metrics. Measuring the quality of new hires is difficult and often subjective, but it could include a combination of performance reviews , employee engagement surveys , retention rate and peer reviews after 90 days. These criteria can be presented as an average quality-of-hire score, or it can be presented as a percentage of new hires that meet a predetermined threshold for a quality hire.

4. Offer Acceptance Rate

Offer acceptance rate — the percentage of job offers accepted by candidates — is another important indicator for talent acquisition. A low offer acceptance rate could indicate that its salary offers are lower than other companies, or it could indicate an onerous or troublesome hiring process. By addressing a low acceptance rate, companies can improve their employer brand and save HR teams the headache of reposting and re-interviewing candidates.

5. Workforce Diversity

To get a comprehensive snapshot of your workforce, you need demographic data about employees’ gender, race and location, at the least. This data can be used to measure the diversity of an organization’s workforce, which might prompt a need to actively recruit more diverse candidates. HR professionals should also look at diversity data in combination with other HR data about hiring, promotions and retention to see if there are inequities that should be addressed.

Organizational Structure Metrics

6. headcount.

A simple but important metric, headcount is the number of employees that work at an organization at a specific time. This figure, which includes full-time, part-time and contract workers, should be supplemented with information about each employees’ demographics, department and salary. This information can be useful for workforce planning and maintaining appropriate staffing levels.

7. Total Cost of the Workforce

The total cost of the workforce measures how much the organization spends on salaries and benefits , as well as other employee-related expenses like recruiting, onboarding and training. This metric is useful in understanding the biggest drivers of personnel expenses, how they change over time and how personnel-related expenditures correlate with retention, productivity and other HR and business metrics.

8. Employee Growth Rate

Employee growth rate can give a sense of how fast an organization is growing over a set time period — this could be over a six-month period or a five-year period, for instance. To calculate the employee growth rate, subtract the number of employees at the end of the time period from the number of employees at the end of the time period and divide the number of employees at the start of the period. This figure can help HR teams forecast hiring needs and budget personnel costs, especially during periods of expansion.  

9. Spans and Layers

Spans and layers indicates how flat or hierarchical an organization is. Span of control measures how many employees report directly to one person, and organizational layers refers to the number of organizational levels with supervisory responsibilities. A spans-and-layers analysis can help organizations reduce bureaucracy and accelerate decision-making.

Employee Engagement Metrics

10. voluntary turnover rate.

Voluntary turnover rate is the percentage of employees who have voluntarily left the company over a specified period of time. High turnover is costly and inefficient , so it’s important to diagnose the cause of it. HR leaders can look at the demographics of people leaving to identify any trends by tenure, department or demographic. 

11. Employee Retention Rate

Employee retention rate is the percentage of employees who stay with a company during a specified time period. It’s more or less the opposite of the turnover rate, with some exceptions. An organization’s retention rate is influenced by a number of factors, like employee engagement, organizational culture and opportunities for advancement. Companies should focus on retaining top-performing employees who can use their institutional knowledge to propel the business forward.

12. Employee Net Promoter Score (eNPS)

Employee net promoter score (eNPS) gauges employee engagement by asking team members to rate how likely they are to recommend their company as a great place to work. Based on a scale of 10, those who give a score of 9 or higher are considered promoters, and those who give a score of 6 or lower are considered detractors. The score is calculated by subtracting the percentage of detractors from the percentage of promoters. While useful as a general indicator, experts recommend digging deeper into demographics, asking other survey questions and considering additional data points to get a better picture of employee engagement.

13. Absenteeism Rate

Absenteeism rate is the percentage of unscheduled absences within an organization, a team or for a single employee. Absenteeism might indicate low employee engagement or issues with employees’ mental or physical health. Companies may want to conduct surveys to see if workers are suffering from burnout , which could lead to them quitting. They might also offer more paid time off , offer employee assistance programs or help employees with work-life balance .

Performance Metrics

14. internal promotion rate.

Internal promotion rate offers a look at the upward mobility and career development in an organization. It’s calculated by dividing the number of promotions in a year by the total number of employees. If an organization has retention troubles coupled with a low internal promotion rate (the average is 7 percent ), employees could be jumping ship to advance their career elsewhere.

15. Revenue Per Employee

Revenue per employee is a snapshot of an organization’s efficiency, productivity and return on investment. It can be calculated by dividing a company’s total revenue by its headcount. This metric is best analyzed alongside other HR metrics, like the turnover rate, headcount and total cost of the workforce. It can also be helpful to compare against organizations of a similar size in the same industry. 

16. Compa-ratio

Compa-ratio, which is short for comparative ratio, is a way to measure whether an organization’s salaries are competitive. HR professionals can calculate an employee’s compa-ratio by dividing their salary by the median salary range for the same job title in the same industry. Compa-ratio can be used to gauge whether an organization’s salaries are in line with the industry average, or it can be used to look at wage gaps between employees within the organization.

Related Reading What Is HR Analytics?

Why Are HR Metrics Important?

In addition to being the most expensive line item in its budget, a company’s workforce is also the biggest determinant of business success. HR metrics can help company leaders identify any problems in the organization and develop data-driven solutions rather than relying on gut instincts.

HR metrics become more meaningful when positioned in context with other data points. A company that is suffering from high turnover, for example, might look at the demographics of employees that are leaving. If more experienced employees are leaving, HR could consider more internal promotions or career development programming. If employees of color are leaving, there may be some organizational inequities to address.

“Looking at metrics in combination with each other gives you a powerful data set that you can use to … do very specific or targeted activities,” Pruitt-Haynes said.

HR metrics are also important for tracking the effectiveness of HR initiatives and demonstrating the value of those initiatives to other senior business leaders in the organization. HR leaders have a seat at the table when senior leadership is making strategic business decisions. To provide value to these conversations, HR leaders need real-time data — not just an annual report — to navigate evolving conditions.

“Because there’s so much change and the speed of change is happening so rapidly within companies, HR leaders really need the data at their fingertips so that they can more quickly understand what’s happening within the organization and then react to it and solve for it,” London said. 

By providing this data to senior leaders, HR leaders can work collaboratively to develop solutions instead of carrying the weight of complex organizational issues.

“Culture isn’t built from an HR leader, and it shouldn’t be owned by an HR leader,” London said. “It should be more about that HR leader facilitating these metrics and holding other people responsible for them.”

Frequently Asked Questions

What are hr metrics.

HR metrics are measurements that indicate the effectiveness of an organization’s human resource initiatives. This data can help HR professionals pinpoint problems, develop solutions and plot the effectiveness of those strategies. 

Examples of HR metrics

Examples of HR metrics include turnover rate, time-to-hire, workforce diversity and employee growth rate.

What is an example of a soft metric in HR?

A soft metric is based on qualitative data like survey responses. Some examples of soft metrics are employee engagement and job satisfaction.

Recent Employee Engagement Articles

10 Essential HR Metrics In 2024

Updated: Jul 9, 2024, 9:27am

Table of Contents

1. cost per hire, 2. time to hire, 3. quality of hire, 4. employee net promoter score (enps), 5. absenteeism rate, 6. employee growth rate, 7. employee turnover rate, 8. salary averages, 9. salary range penetration, 10. diversity ratios, how to use hr metrics, bottom line, frequently asked questions (faqs).

One of HR’s many functions is to act as an organization’s eyes, looking both internally and externally for information and comparisons that are useful to bettering a business. Human resource metrics are like an essential pair of glasses—without them, workplace data is visible but unintelligible. With the right lenses, patterns, trends and discrepancies come into focus and organizations can approach decision-making processes with a clearer picture of reality. Here are ten top HR metrics to consider when using a data-driven approach for talent management .

This tried-and-true HR hiring metric is as relevant in 2024 as ever. Cost per hire (CPH) shows how much a company spends on average to acquire a new employee. As with any value-per-person or “per capita” figure, a value can be reached by simply dividing costs by the number of people in question—here, total hiring dollars divided by total new hires within a given time period. The result is essentially a simplified cost-benefit ratio expressed in one easily comparable figure.

HR departments have long relied on CPH as one way to gauge the efficiency of the hiring process, as it’s more descriptive than simply adding up expenses. Importantly, this metric includes the costs incurred by outreach to all prospective employees, including those not ultimately hired. While this may seem counterintuitive, it’s less variable and more illuminating of cost-effectiveness, not to mention much more practical to calculate.

For consistency in comparison, the Society for Human Resource Management (SHRM) and the American National Standards Institute have created standardized definitions for what internal and external costs are to be included in the calculation. Included are rather obvious costs such as paying for recruiting staff , recruiting software and advertising, but the list also includes expenses such as health screenings, drug tests, sign-on bonuses and relocation fees the company must cover while preparing for a new hire. The SHRM estimates that in 2021, American organizations spent on average nearly $4,700 per hire and over $28,000 per executive-level hire.

Another essential metric for HR, “time to hire” measures the time from a prospective employee engaging with the recruiting process to their acceptance of a position. Similar to cost per hire, this is expressed as a per-person average and is used to assess the efficiency of the “talent acquisition” process. Investigating a lengthy time to hire may point to poor reach ( job posting or advertising) or to underperformance of the hiring teams in charge of filtering candidates. Regardless, it’s a sign prospective employees aren’t being sufficiently engaged and may be lost to competitors or turned off by the company’s hiring process.

Many HR resources are vague or inconsistent in defining what exactly marks the start of the time-to-hire period. Some use first contact between the candidate and employer while others use the submission of a candidate’s application, which are sometimes different events. However it’s defined, time to hire is distinct from “time to fill,” which begins when a company makes an initial job request and ends when a candidate accepts your job offer.

Perhaps the broadest in scope of any metric on this list, “quality of hire” is something of a super-metric encompassing several different employee metrics (often called “indicators” in this context). The selection of these indicators will vary depending on the specific goals involved.

Unlike cost per hire and time to hire, quality of hire attempts to show the value an employee brings to a company, shedding light not on the efficiency of the hiring process itself but rather on its return on investment. The SHRM describes quality of hire as the “holy grail” of recruiting metrics due to how thoroughly it can address employee value compared to other, narrower metrics.

The general formula for quality of hire adds up the values from whatever employee indicators are being used and divides the result by the total number of indicators being used.

So what are the indicators that compose quality of hire? A 2017 SHRM survey found that “performance appraisal scores,” “retention rates” and “360-degree feedback scores” are the most popular inclusions. Other common inputs include “customer service scores,” “rate of salary increase” and “profit contribution.” While there are different ways to score quality of hire, it’s common for the indicators to be expressed as a percentage, meaning the resulting average will be expressed the same way.

An eNPS measures how much a group of employees would recommend or not recommend employment with their company to others. It’s relatively easy to measure and serves as a good, though general, proxy for overall employee satisfaction.

An employer surveys employees by asking, on a scale from zero to ten, how likely they are to recommend the company to others as a place to work. For calculation purposes, respondents who choose a nine or ten are categorized as “promoters,” those indicating a seven or eight are “passives” and those with a six or below are “detractors.” To calculate an eNPS, subtract the number of detractors from the number of promoters, divide the result by the total number of respondents and finally multiply this figure by 100.

A score of 40 to 50 is considered excellent and any score above 20 is still good, while the ten to 20 range is fair. An eNPS of below ten is considered indicative of more serious workplace satisfaction issues. Regardless of the outcome, employers may wish to include an opportunity for further comment on their survey to better understand what is driving satisfaction or dissatisfaction.

Results can be broken down by the respondents’ workplace characteristics (length of employment, position, department, etc.) and by broader demographics (age, gender, race, etc.). This can help HR teams learn more about issues such as employee burnout, satisfaction with department leadership and equitable treatment among employees of varied identities. For example, if women consistently respond less favorably than men, HR can investigate issues with workplace culture or gender-based discrimination. Using an eNPS in this way allows HR to build a picture of the workplace with only very general questioning, sidestepping loaded survey questions that employees may struggle to answer openly.

Absenteeism , which usually refers specifically to unscheduled absences from work, can have a variety of causes. It may indicate employees’ challenges with health and well-being, rather than with commitment or workplace dissatisfaction. Either way, collecting attendance data is important to HR, both for evaluating the costs and patterns of missed time and for better understanding employees’ needs.

To calculate an absenteeism rate, divide the number of unexcused absences by the total number of expected workdays within any set amount of time. Then, multiply the result by 100 to reach a percentage. The closer to zero, the better.

The equation works the same for a whole company as it does for a single employee and can be applied to time periods of any length. It can be calculated for individual departments within a company, too—so long as the inputs are adjusted accordingly. When calculating for a group, just remember that the “# of expected workdays” used in the equation represents the whole group’s individual workdays added together. In other words, there will be as many “expected workdays” in a single day as there are number of people. For example, a team of ten people working for five days will accrue 50 expected workdays in this context, not five.

Sometimes referred to as “company growth rate,” this metric indicates how much a company is either growing or shrinking its number of employees. It describes this change over any given period of time—perhaps a quarter, a year, five years—by using a headcount at the start of the period (“Point A”) and at the end (“Point B”).

To calculate employee growth rate, begin by subtracting the head count at Point A from the head count from Point B. (If there was a net loss in employees, this value will be expressed as a negative number, making the end result negative as well.) Next, divide this figure by the head count at Point A. Finally, multiply the result by 100 to represent it as a percentage.

Understanding a company’s rate of growth or contraction in terms of employee strength can be important for future planning. A simple head count can inform HR of certain company needs, but being able to predict how these needs will change in the future is critical for many workplaces. HR may also find it useful to compare growth rates between subsections of a company such as different departments or employee tiers, which can shed light on patterns in hiring practices. It may also be desirable to calculate separate employee growth rates for many sequential time periods and to compare the rate of change over time, which gives a more detailed picture than a single figure.

True to its name, employee turnover rate (ETR) reveals the number of employees who resign or are let go within a given time period (often a month or a year). At its core, the figure is simply a ratio comparing employee departures to total employees. As such, it can be calculated by dividing the number of departures by the number of employees at the outset of the time period in question and multiplying the result by 100 to reach a percentage.

An ETR is inversely proportional to the “employee retention rate,” so if 85% of a company’s employees stay on through a given time period, the ETR is 15%. Observable patterns in ETRs can indicate both the percentage of employees who can be expected to depart and also the average likelihood of departure for any one employee.

While most companies strive for the highest possible retention rate and the lowest possible turnover rate, some degree of employee turnover is usually healthy. It’s hard to put a number on ideal rates because turnover expectations can vary dramatically industry to industry, but in many cases, moderate ETRs don’t necessarily imply poor hiring practices.

Due to its very general nature, an ETR is often combined with other metrics to paint a more complete picture of workforce dynamics. Combining it with employee performance metrics, for example, can indicate whether being a top performer at a company increases retention prospects or alternatively increases the likelihood of departure in search of better opportunities. When combined with demographic data, high ETRs observed among specific identities can be one potential sign that workplace inequities or a troublesome company culture are driving away particular employees.

Salary averages can be used to describe relative compensation for virtually any category within a company. This includes subgroups of a company structure, such as different position levels or departments, as well as employees’ demographic groups. To calculate a salary average, begin by adding up the salaries for all members of the specified group. Then, divide that dollar amount by the total number of group members.

Salary averages can be useful both internally and externally. While cross-comparison within a company is important, these averages can also inform how employees at a certain position level are compensated compared to peers at competitor organizations, or when compared to a local or national average. For this, these averages are essential, but while simple and broadly applicable, salary averages by themselves provide minimal insight into the reasons behind any discrepancies, typically offering possible points of correlation but failing to deliver causation.

This metric describes how well an employee is currently being paid relative to an employer-determined salary range for a position. There are many reasons why an employee may be at the high or low end of an anticipated salary range. From an HR perspective, the important part is making sure the reasons for any variance between employees are appropriate.

To begin, identify the minimum and maximum values for the estimated salary range of an employee’s position. Subtract the range minimum from the employee’s current salary. Then divide this figure by the difference between the range maximum and minimum. Finally, multiply by 100.

The resulting percentage describes how far the employee has “penetrated” into an anticipated salary range, with 0% penetration being equal to the range minimum and 100% representing the maximum. For example, in a position with a salary range of $80,000 to $100,000, an employee making $90,000 has achieved 50% penetration; $95,000 would equal 75% penetration.

A figure such as this on its own can be useful at the individual level, but HR departments will likely want to compare salary range penetration statistics among groups of individuals within the company or even externally. Doing so can have many possible utilities, though particularly important is the ability to assess pay equity. For example, observing a pay gap based on salary averages offers less insight into company practices when factors such as position and hours worked are not controlled for—however, combining penetration figures with stats on gender representation in a company hierarchy can provide more targeted information about disparities.

A “diverse” group of employees can mean many things, though the language generally implies the inclusion of employees with varied gender, racial and cultural backgrounds, to name a few examples. As more companies push to include the language of “diversity, equity and inclusion” (DE&I) in company cultures and hiring processes, it’s important to have honest assessments of a company’s performance to back up the rhetoric. For HR departments, understanding representation often begins with employee diversity ratios.

To express diversity data as a ratio, the head counts for two groups being compared are commonly placed side by side. A three-to-one (3:1) ratio, for example, means that there are three employees in the first category for every one employee in the second category. For easy comparison, ratios take the totals (in this case, the employee head counts) of each group and divide them each by the largest factor they share (their “greatest common factor”), sometimes rounding if the groups are large.

For example, let’s say a company has 495 white employees and 163 employees of color. HR might want to know how this makeup compares to broader population metrics, smaller subsections within the company, internal data from the past or metrics from other similar companies. Expressing the ratio as 495:163 is not incorrect but it’s clunky and difficult to compare. However, divide the total of each group by 165 (an easy number very close to 163) and the resulting figures are 3 and 0.988. Because the latter figure is extremely close to 1, we can just say that there’s a 3:1 white to non-white ratio in the company’s workforce.

Comparisons such as these can prove essential to HR for simplifying the numbers and helping develop specific goals. Lumping all non-white employees into a single category, however, has obvious practical limits among other major ethical drawbacks, as does any act of overgeneralizing for easy comparison. Importantly, HR teams must also be aware that increasing head counts within certain categories only begins to address the first part of “DE&I.” The “equity and inclusion” aspects require much more work than simply hiring toward favorable ratios.

For HR teams, simply having data and employee metrics on hand is just the start, but it can be half the challenge to achieve. If your organization is light on data collection, look for ways to collect new data or to interpret existing, unused data through statistics . Collecting data doesn’t have to mean encroaching on employee privacy. It can be as simple as aggregating data on employee bonuses in one centralized place, for example, such that patterns can be tracked and more bonuses can be awarded where they’ll count. Another great place to start is the simple employee survey, which can be surprisingly illuminating.

Look for the areas where your company is most interested in seeking unknown information—evaluating candidates during the hiring process is usually a big one, as are the many factors that can boost or hinder employee productivity. Many companies are also more “in the dark” than one might assume about what factors drive retention and attrition. Whatever the case, a data-driven approach through HR metrics beats speculation.

One of the best ways to use HR metrics is by overlaying several of them to build a bigger picture. Many of the metrics listed here provide decent information by themselves but impart real insight and directives for change when combined. For instance, employee compensation metrics such as salary averages and salary range penetration simply allow HR to see who gets paid what. Compare this data side by side with employee satisfaction metrics such as eNPSs or turnover rates and patterns may emerge, answering questions about how effectively (or ineffectively) compensation tools are increasing retention and where raises can be most efficiently applied.

So long as the data are accurate, what we make of HR data and how we manipulate it to develop metrics for success determines how successful our analysis will be. For successful HR teams , the most important job is to put existing data to use and to look for new areas where uncollected data can be transformed into telling metrics. Advances in workplace technology and data management tools make this easier than ever.

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What’s the difference between time to hire and time to fill?

Both attempt to measure the efficiency of the hiring process . Time to fill measures a longer period of time from a job’s initial posting to an eventual hire. By contrast, time to hire measures the time between an employer’s first contact with a candidate, such as receiving their application, and the candidate’s hiring.

How do I calculate a gender pay gap?

In an HR context, a pay gap between any two groups is determined by calculating the respective salary or earnings averages (salaries of sum of group divided by the number of employees in group) and then finding the difference between the two. Some figures for the gender pay gap rely on median earnings instead of averages. “Controlled” pay gap metrics seek more detail by accounting for factors such as hours worked, but most (including the commonly cited American gender pay gap ) do not.

What is the employee attrition rate?

An “employee attrition rate” is another name for an employee turnover rate , which indicates the proportion of employees who leave a company in a given period of time. This type of figure is most often expressed as a percentage. Unlike a “voluntary attrition or turnover rate,” it accounts for both resignations and dismissals.

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Chauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tractor, but has learned that opportunity is where he finds it and discomfort is more interesting than complacency.

20 Most Important HR KPIs & Metrics to Track

• Updated on January 17, 2024

Do you want to assess your HR department or HR-related business but don’t know where to start? As Someka, we already created HR Dashboard templates with HR KPI dashboard but in this post, you will be able to learn all the HR KPIs and key metrics and how to implement them in a detailed manner.

What is KPI in HR?

HR KPIs mean key performance indicators for human resources departments or agencies, in general. An HR KPI is a key metric for you to track in order to assess and ensure the quality of employee-related departments.

Why should you track HR KPIs?

HR  is one of the core features of any business because of the fact that every business needs employees. Human resources metrics help you to improve your HR department’s success and see the risks and failures.

What are the most important KPIs in HR?

HR is a broad subject and that’s why there are many HR KPIs you can implement in your KPI dashboard. We gathered the 20 most important HR KPIs for you in this article.

Human Resources Metrics

1. Avg. Recruiting Time

HR Metrics / Investment / Cost / Employee Management / Market Share

Description: Average Lead Time to Recruit New Employees. This metrics is important for the company to be able to estimate when they have to start recruiting process to have the new employee when he actually will be needed not few weeks or months later or earlier.

Should be High or Low?: It is good if the hiring time is shorter but it’s not the most important. It is however important to be sure about the time it take and not to have a big variance in the average counted.

2. Avg. New Hires Performance

HR Metrics / Revenue / Financial Performance / Profitability / Sales / Work Efficiency

Description: Performance Score of New Employees within 6M, usually there are some goals set up for new employees to be achieved. After a certain amount of time the results are compared to the set-up goals.

Should be High or Low?: Based on the results you can estimate % of salaries increase for each employee. But also, you can see the influence of the trainings and how much the productivity can grow after an employee is fully trained and has the main know how.

3. Avg. Length of Placement

HR Metrics / Employee Satisfaction / Investment / Cost / Employee Management

Description: Average time to hire a person of a specific position. This metrics is very similar to recruiting time however it is more detailed because you should split the metrics depending on the position you are searching an employee for.

Should be High or Low?: It is important to have knowledge how long it can take to hire a person for a specific position because different positions can have a big difference in time.

4. Diversity (Female to Male Ratio)

HR Metrics / Employee Management / Brand Value

Description: It allows you to track the ratio of new hired people.

Calculation Method / Formula: number of female employees / total number of employees

Should be High or Low?: It is informative metrics.

5. Average Training Hours per Employee

HR Metrics / Employee Satisfaction / Employee Management / Budget Management / Quality / Work Efficiency

Description: This metrics shows you the average training hour of an employee. Training may increase the quality and decrease in the future cost of fixing mistakes.

Calculation Method / Formula: You can calculate it as: (Total number of training hours) / Total number of employees

Should be High or Low?: Target should be estimated based on experience and comparison between higher and lower qualified workers.

6. Productivity Change

HR Metrics / Employee Satisfaction / Work Efficiency / Employee Management

Description: This metrics can be very helpful when it comes to estimating budget for the employee trainings and also to follow the training satisfaction score. So, you know how much you can improve the skills and efficiency of your employees.

Calculation Method / Formula: % Change of Productivity Before/After the Training

Should be High or Low?: You can compare if the results are changing after some changes in the training content or compare it to the satisfaction score if the results are aligned.

7. Employee satisfaction points with training

Description: Employee satisfaction score given in a questionnaire as a result of taken trainings.

Should be High or Low?: The results can show you if the training is helpful, understandable. It can also give an important input on changes in the training. So even if the results are below expectations it can be still a good input for the improvement.

8. Development Plan Execution

Description: Metrics that counts ratio of employees who fully follows their development plan out of total number of employees.

Calculation Method / Formula: % of employees that fully execute their Individual Development Plan

Should be High or Low?: If the ratio is going down, it may mean that the development plans are not well prepared.

9. Coaching Plan Participation

Description: Number of employees following coaching career development plan out of all employees.

Calculation Method / Formula: % of employees that participate Career coaching plan

10. Avg. Time at Same Function

Description: Average time employee is on the same position/function.

Calculation Method / Formula: Average time employees are in the same function

Should be High or Low?: Higher time may be reason for some employees to quit job. However short time can mean a big employee turnover.

11. Leave Ratio

HR Metrics / Employee Satisfaction / Cost / Work Efficiency / Budget Management

Description: % of employees who decided to leave the company in a certain period of time. Usually calculated monthly or yearly. It is one of the factors important while planning hiring budget.

Calculation Method / Formula: % of employees who leave the company in a given time period

Should be High or Low?: It is important to keep this statistic low, because with every leaving employee company is also losing some part of knowhow and experience.

12. Profit Per Employee

HR Metrics / Revenue / Financial Performance / Work Efficiency / Profitability

Description: This metrics can show you how efficient are your employees. You can estimate possible losses or additional income if you think about firing or hiring new employees. This is not one to one implication but can give you a good point of view while seeing changes between that metrics and a number of employees.

Calculation Method / Formula: Revenue – Total Expenses / FTE

Should be High or Low?: Mainly an informative value but you need to be careful how it changes. Maybe you have hired to many people for current situation or not enough, or maybe you are hiring new people for your new branch. Depend on that this number will be changing.

13. Headcount Per HR Staff

HR Metrics / Employee Management / Budget Management

Description: Average headcount of employees in HR team. You can measure just the number of as a ratio to all the employees of the company.

Should be High or Low?: It is an informative metrics.

14. Avg. Vacation Days

Description: Average number of vacation days per employee

15. Overtime Hours Ratio

HR Metrics / Work Efficiency / Employee Satisfaction / Cost / Work Time Management

Description: Total overtime hours as a percentage of all work hours

Should be High or Low?: If the overtime is always high you can calculate the possibility to hire extra employees instead of paying overtime.

16. Average Salary

Description: Average salary is important metrics while creating new budget for the next year.

Should be High or Low?: Number depends on many factors, but it is good to be aware of the average salaries in other companies of the related sector.

17. Average Retirement Age

Description: This metrics has a different importance form company to company depends on a percentage of employees in certain age.

Should be High or Low?: Informative metrics.

18. Hire Budget Realization

HR Metrics / Budget Management / Employee Management / Planning Effectiveness

Description: It is a measure of effectiveness of hiring process as well as the correct hire estimation. Sometimes budget set in the beginning of the year can be not enough after some months due to new circumstances.

Calculation Method / Formula: # actual hired people / Planned and Budgeted number of new hires

Should be High or Low?: It is important to have all the possible inputs, planned projects, opening new branch etc. while planning a budget for hiring so the company won’t have to struggle later if there will be high number of new employees to hire. The budget should be prepared for that.

19. Training Budget Ratio

Description: Percentage of HR budget spent on training

Calculation Method / Formula: budget planned for trainings / total HR budget

Should be High or Low?: You should estimate your budget based according to the number of employees and the results that are achievable due to those training.

20. Avg. Training Cost Per Person

Description: Average training costs per employee, you can compare this metrics with productivity change later and see how valuable and profitable the trainings are. In the training you should include all the trainings together with hard and soft skills trainings as well as the orientation training.

Should be High or Low?: It may seem the lower cost would be better but in fact it is important to have an optimum budget for good quality trainings for your employees because it will result in much higher efficiency of their further work.

Below is the summary of HR KPI metrics:

Most Important KPIs for Different Industries

HR KPIs are specific to human resources departments or HR related businesses. For other departments and industries, you can check our related articles.

Related Posts

HR metrics that matter in 2024: A complete guide

The HR landscape is undergoing a metamorphosis in 2024, driven by evolving employee expectations, a talent-driven market, and an increased focus on strategic people practices. Navigating this dynamic environment requires data-driven insights, and that's where HR metrics come into play.

Today, HR metrics are more than just measuring sticks; they're powerful tools that unlock strategic decision-making, optimize processes, and ultimately, drive business success.

By focusing on the right metrics, you can gain valuable insights into your workforce, optimize your HR investments, and build a stronger, more resilient organization that thrives in the dynamic world of 2024.

What are HR metrics?

HR metrics play a pivotal role in evaluating and optimizing various aspects of an organization's workforce. HR metrics, or human resource metrics, refer to quantifiable measures that help organizations assess the effectiveness and efficiency of their HR practices.

These metrics provide valuable insights into the performance, productivity, and overall health of the workforce, enabling HR professionals and business leaders to make informed decisions.

HR metrics encompass a wide range of key performance indicators (KPIs) that cover areas such as recruitment, employee engagement , retention, training and development , and overall organizational performance.

By analyzing these metrics, HR teams can identify trends, patterns, and areas for improvement, leading to data-driven strategies that align with the organization's goals.

What are the types of HR metrics?

Human Resources (HR) metrics are essential tools for measuring and analyzing various aspects of an organization's workforce and its effectiveness. There are several types of HR metrics, each serving a specific purpose. Here are some common types:

1. Recruitment metrics

• Purpose: Evaluate the efficiency and effectiveness of the recruitment process.
• Usage: Measure time-to-fill, cost-per-hire, source effectiveness, and candidate satisfaction.

2. Retention metrics

• Purpose: Assess the organization's ability to retain employees.
• Usage: Track turnover rates , employee satisfaction, and reasons for leaving.

3. Performance metrics

• Purpose: Measure individual and team performance.
• Usage: Evaluate key performance indicators (KPIs), goal achievement, and employee productivity .

4. Training and development metrics

• Purpose: Gauge the impact of training and development programs.
• Usage: Assess training effectiveness, employee skill development, and learning program engagement.

5. Employee engagement metrics

• Purpose: Evaluate the level of employee commitment and satisfaction.
• Usage: Measure engagement through surveys , feedback, and participation in company initiatives.

6. Compensation metrics

• Purpose: Analyze the effectiveness of the compensation strategy.
• Usage: Evaluate salary competitiveness, incentive program effectiveness, and overall compensation satisfaction.

7. Workforce diversity metrics

• Purpose: Assess the diversity and inclusion within the workforce.
• Usage: Monitor gender, ethnicity, and other demographic factors to promote diversity initiatives.

8. Absence and leave metrics

• Purpose: Track employee absences and leaves.
• Usage: Measure absenteeism rates, reasons for leave, and the impact on productivity.

9. Succession planning metrics

• Purpose: Evaluate the readiness of employees for key roles.
• Usage: Identify and develop high-potential employees, assess leadership pipeline strength.

10. Cost per employee metrics

• Purpose: Analyze the cost associated with each employee.
• Usage: Evaluate overall workforce expenses, including salary, benefits, and training costs.

11. Human capital ROI metrics

• Purpose: Measure the return on investment in human capital.
• Usage: Assess the impact of HR strategies on organizational performance and profitability.

12. Health and well-being metrics

• Purpose: Monitor employee well-being and health-related factors.
• Usage: Track wellness program participation, health benefits utilization, and overall employee health.

Why does HR metrics matter?

HR metrics play a crucial role in modern organizations by providing quantifiable insights into various aspects of the workforce. Firstly, these metrics offer a means to assess and optimize organizational performance.

By tracking recruitment and retention metrics, companies can identify trends, measure the effectiveness of their talent acquisition strategies, and make informed decisions to attract and retain top talent .

HR metrics also contribute to strategic decision-making. Metrics related to training, development, and succession planning help organizations identify skill gaps and nurture talent, ensuring a robust pipeline of future leaders.

It even helps in tracking workforce diversity metrics support inclusivity initiatives, fostering a more equitable workplace and enriching organizational perspectives. Cost-related metrics, such as compensation and human capital ROI, allow for informed budgeting and resource allocation, ensuring optimal financial management.

Lastly, HR metrics serve as a foundation for evidence-based HR practices. In an era where data-driven decision-making is paramount, these metrics enable HR professionals to objectively assess the impact of HR initiatives on overall business outcomes.

By leveraging these metrics, organizations can adapt proactively to market dynamics, enhance employee satisfaction, and ultimately contribute to sustained success in today's competitive business landscape.

What are the metrics for HR strategy?

HR strategy metrics are essential for evaluating the effectiveness and impact of the Human Resources function within an organization. These metrics help HR professionals align their strategies with overall business objectives. Some key HR strategy categories and metrics include:

• Alignment with business goals: Percentage of HR initiatives aligned with overall business strategy.
• Purpose: Ensures that HR activities directly contribute to achieving organizational objectives.
• Talent acquisition effectiveness: Time-to-fill, quality, number of employees to hire, and source effectiveness
• Employee engagement and satisfaction: Employee engagement scores, satisfaction surveys
• Leadership development: Succession planning effectiveness, leadership pipeline strength
• Training and development impact: Training program effectiveness, skill development progress
• Retention rates: Voluntary turnover rate, retention of high-performing employees
• Diversity and inclusion: Workforce diversity metrics, inclusion scores
• HR technology effectiveness: Usage and efficiency of HR technology solutions
• Cost per hire and HR budget efficiency: Cost per hire, HR budget utilization
• Human capital ROI: Return on investment in human capital
• Workforce planning accuracy: Accuracy of workforce forecasts

The 30+ most important HR metrics

Here is a comprehensive list of 30+ important HR metrics that organizations often use to assess various aspects of their workforce and HR functions:

• Turnover rate: Measures the percentage of employees who leave the organization within a specified period.
• Retention rate: The opposite of turnover rate, it measures the percentage of employees retained over a certain period.
• Time-to-fill: Calculates the average time taken to fill a vacant position.
• Cost-per-hire: Measures the average cost incurred to hire a new employee.
• Quality of hire: Assesses the performance and contribution of new hires to the organization.
• Employee engagement score: Measures the level of employee commitment and satisfaction .
• Absenteeism rate: Calculates the percentage of workdays lost due to employee absences.
• Overtime costs: Measures the financial impact of overtime work on the organization.
• Training and development investment: Quantifies the resources invested in employee training and development.
• Training effectiveness: Assesses the impact of training programs on employee performance.
• Leadership pipeline strength: Evaluates the readiness of employees to assume leadership roles.
• Succession planning effectiveness: Measures the success of succession planning initiatives.
• Workforce diversity index: Evaluates the diversity within the organization based on various demographic factors.
• Inclusion scores: Measures the inclusivity and sense of belonging within the workforce.
• Employee satisfaction surveys: Collects feedback on overall employee satisfaction with work conditions and company culture.
• Promotion rate: Measures the percentage of internal promotions within the organization.
• Performance appraisal effectiveness: Assesses the efficiency and impact of the performance appraisal process.
• Benefits utilization rate: Measures the utilization of employee benefits and perks.
• HR technology adoption: Tracks the usage and effectiveness of HR technology solutions.
• Workforce productivity: Measures the overall productivity of the workforce.
• Work-life balance scores: Assesses employees' perception of their work-life balance.
• Compensation satisfaction: Measures employee satisfaction with the compensation and benefits package.
• Human capital ROI: Calculates the return on investment in human capital.
• Employee net promoter score (eNPS): Measures the likelihood of employees recommending the organization as a good place to work.
• Employee wellness program participation: Tracks employee engagement in wellness initiatives .
• Employee Referral Rate: Measures the percentage of new hires recruited through employee referrals.
• Internal mobility rate: Measures the movement of employees across different roles within the organization.
• Flexible work arrangement adoption: Tracks the adoption and effectiveness of flexible work arrangements.
• Cost of benefits: Calculates the total cost of employee benefits per capita.
• Workforce planning accuracy: Measures the accuracy of workforce forecasting.
• HR budget utilization: Assesses the efficiency of HR budget allocation.
• Employee Turnover Costs: Calculates the financial impact of employee turnover on the organization.

These metrics collectively provide organizations with a comprehensive understanding of their workforce dynamics, allowing them to make informed decisions and continuously improve HR strategies and practices.

What is the most important use of HR metrics and analytics?

The most critical use of HR metrics and analytics lies in their capacity to drive informed decision-making and strategic alignment within organizations.

By leveraging data-driven insights, HR professionals can better understand the dynamics of their workforce, identify trends, and make proactive decisions that positively impact both employees and the overall business.

One pivotal application is in talent management, where HR metrics help optimize recruitment, assess employee performance , and strategically plan for succession.

Understanding turnover rates and analyzing the factors contributing to attrition enables organizations to implement targeted hiring process retention strategies , fostering a more stable and engaged workforce.

Furthermore, HR metrics play a pivotal role in aligning HR practices with overarching business goals. These metrics provide a quantitative basis for evaluating the effectiveness of HR initiatives, from recruitment and training to diversity and inclusion efforts.

The ability to measure and demonstrate the return on investment in human capital ensures that HR functions are not only efficient but also directly contribute to the organization's bottom line.

HR metrics and analytics also empower HR professionals and organizational leaders to make evidence-based decisions, fostering a culture of continuous improvement and adaptability.

In an era where talent management is a strategic imperative, the judicious use of these HR data and metrics enables organizations to stay agile, competitive, and responsive to the evolving needs of their workforce and the broader business landscape.

What is the difference between HR metrics and HR analytics?

While both HR metrics and HR analytics are valuable for managing human capital, HR analytics takes a more sophisticated approach, leveraging data to inform strategic decisions and provide insights for future planning. Let’s take a look at the difference between the two.

HR metrics: Specific, focused on individual HR processes and activities.

HR analytics: Comprehensive, involves a strategic, organization-wide approach.

HR metrics: Quantitative measures are often numerical and straightforward.

HR analytics: Involves advanced statistical and predictive analysis.

HR metrics: Provides insights into current performance and trends within HR functions.

HR analytics: Aims to uncover patterns, correlations, and insights for strategic decision-making.

Application

HR metrics: Used to monitor and manage key aspects of the workforce, such as turnover rates, time-to-fill, and engagement scores.

HR analytics: Applied to make strategic, forward-looking decisions, such as predicting workforce trends and identifying factors impacting overall business performance.

HR metrics: Typically focuses on historical and current data.

HR analytics: Incorporates historical data but emphasizes predictive and prescriptive analysis for future planning.

Decision-making level

HR metrics: Operational and tactical decision-making.

HR analytics: Strategic decision-making at the organizational level.

HR metrics: Relatively simpler in terms of data analysis.

HR analytics: Involves more complex data analysis techniques and methodologies.

HR metrics: Turnover rates, time-to-fill, absenteeism rates, employee engagement scores.

HR analytics: Predictive workforce planning, talent forecasting, identifying factors contributing to high-performing teams.

What are HR metrics and benchmarking?

HR metrics and benchmarking are integral components of human resource management that collectively contribute to assessing and improving organizational performance.

HR metrics involve the measurement and analysis of specific quantitative indicators related to various HR functions, such as recruitment , employee engagement, turnover rates, and training effectiveness.

These metrics provide organizations with valuable insights into the efficiency and effectiveness of their HR processes, enabling data-driven decision-making to optimize workforce management.

On the other hand, benchmarking in HR involves comparing an organization's HR metrics against external or industry standards to identify areas of strength and areas that require improvement. This process helps organizations understand how they fare relative to industry peers or best practices, fostering a competitive edge.

Benchmarking can be internal, comparing employee performance metrics from across different departments or business units within the organization, or external, comparing against industry benchmarks.

By adopting benchmarking practices, organizations can set realistic performance goals, identify opportunities for improvement, and implement strategies to enhance overall HR performance.

Together, HR metrics and benchmarking provide a holistic approach to evaluating and enhancing HR practices within an organization. HR metrics offer the necessary data to understand internal dynamics, while benchmarking provides a broader context for assessing performance against external standards.

This combination empowers HR professionals and organizational leaders to make informed decisions, drive continuous improvement, and align human resource strategies with industry best practices for sustained success in a dynamic business environment.

What are the different types of HR tools?

HR software or tools encompass a diverse range of software and technologies designed to streamline HR processes, enhance efficiency, and support strategic decision-making. Here are various types of HR tools:

• Applicant tracking system (ATS): Manages the recruitment process by tracking job applications, managing candidate information, and facilitating the hiring workflow.
• Human resource information system (HRIS): Centralizes employee data, automates administrative tasks, and supports HR functions such as payroll, benefits administration, and performance management.
• HR analytics software: Utilizes data analysis to provide insights into workforce trends, performance metrics, and other HR-related analytics for informed decision-making.
• Performance management tools: Aids in setting goals, tracking employee performance, conducting evaluations, and providing feedback .
• Learning management system (LMS): Manages training and development programs, tracks employee learning progress, and delivers online courses.
• Employee engagement software: Measures and improves employee engagement through surveys , feedback tools, and analytics.
• Payroll software: Automates payroll processes, calculates wages, taxes, and deductions, ensuring accurate and timely compensation.
• Time and attendance systems: Tracks employee work hours, attendance, and time-off requests, aiding in payroll and compliance.
• Benefits administration software: Manages employee benefits programs, including enrollment, tracking, and communication.
• Recruitment marketing platforms: Supports employer branding, recruitment advertising, and candidate relationship management to attract top talent.
• Onboarding software: Facilitates the onboarding process for new hires, automating paperwork, and ensuring a smooth transition into the organization.
• Employee self-service (ESS) portals: Allows employees to access and manage their HR-related information, reducing administrative burdens on HR staff.
• Succession planning tools: Assists in identifying and developing potential leaders within the organization for key roles.
• Workforce planning software: Helps organizations forecast future workforce needs based on current trends and business goals.
• Employee recognition platforms: Promotes employee recognition and rewards through peer-to-peer recognition programs.
• Attendance tracking systems: Monitors employee attendance, leave balances, and absenteeism to ensure compliance and fair leave policies.
• Compliance management software: Assists in tracking and ensuring compliance with HR regulations and legal requirements.
• Survey and feedback tools: Collects employee feedback, conducts surveys, and measures satisfaction to gauge employee sentiments.
• Employee wellness platforms: Supports employee well-being initiatives by offering resources, and challenges, and tracking health-related activities.
• Talent management software: Encompasses various HR processes, including performance management, learning and development, and succession planning.

Significance of using employee engagement software in 2024

In 2024, the significance of using employee engagement software has become even more pronounced as organizations recognize the crucial role engaged employees play in driving overall success.

Employee engagement software serves as a strategic tool to gauge, enhance, and sustain the commitment and enthusiasm of the workforce. In an era marked by dynamic work environments, remote work , and evolving employee expectations, such software is invaluable for fostering a positive workplace culture.

One key aspect of employee engagement software is its ability to facilitate continuous communication and feedback. With features like pulse surveys , real-time feedback mechanisms, and collaboration tools, organizations can promptly identify and address employee concerns, ensuring that their voices are heard.

Moreover, the software aids in measuring and analyzing employee sentiment, providing organizations with actionable insights. By tracking metrics such as job satisfaction, work-life balance, and overall well-being, employers can proactively address issues that may impact engagement levels.

This data-driven approach enables HR professionals, hiring managers and leaders to implement targeted strategies for improvement, ultimately contributing to higher retention rates and increased productivity.

The utilization of HR metrics is indispensable for organizations striving to navigate the intricacies of human resource management effectively.

The diverse array of HR metrics, spanning recruitment, retention, performance, and diversity, empowers organizations to gauge, analyze, and optimize their workforce strategies.

These metrics serve as compass points, guiding decision-makers toward evidence-based insights that enhance operational efficiency, employee satisfaction, and overall organizational performance.

As businesses embrace the data-driven era, understanding and leveraging these key HR metrics that matter are instrumental in fostering a dynamic, responsive, and talent-centric workplace.

By continually assessing and adapting these metrics, organizations position themselves to thrive in a rapidly evolving landscape where strategic human resource management is paramount to sustained success.

Santhosh is a Sr. Content Marketer with 2+ years of experience. He loves to travel solo (though he doesn’t label them as vacations, they are) to explore, meet people, and learn new stories.

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45 Key HR Metrics And Data Management Best Practices

HR teams should be using data to inform decision-making and better support the business. Follow this guide to help you decide which HR metrics to track and build a solid data foundation.

“What gets measured gets managed.” - Peter Drucker

Organizations track HR metrics to better understand their workforce and measure the effectiveness of their HR function.

I’ve been an HR professional for nearly 20 years and one of the core bedrocks of my approach in every role has been to clearly understand the metrics that underpin what I’m trying to achieve. 

Developing a solid grounding with your HR metrics gives you the essential base to build on more sophisticated analysis as you develop your capabilities.

Here I’ll provide example HR metrics and lay out a few guiding principles that will make your data journey more efficient.

What Are HR Metrics?

HR metrics are key data points about your workforce, for example demographics, and the activities of your HR function, for example recruitment. They’re used to track performance against organizational objectives and guide strategy.

HR metrics are the facts of your organization . They aren't opinions, they aren't estimates, they're the facts about the people in your organization. 

Alone they don’t tell a story but, once you combine them with richer information and other business data and metrics, you can build an accurate picture of what drives success.

45 key human resources metrics you should Track and how to assess them

Aim to show the number of employees you have (permanent and contractors if that’s relevant for your business) and where they’re based, in which office, and in which executive department they sit.

5 Attrition and retention rate metrics

• Turnover rate. How many people are leaving and from which location/executive department/demographic?
• Why are they leaving—voluntary/non-voluntary? 
• Average tenure of leavers 
• What is your attrition rate? (and your calculation needs to be consistent here). My suggestion for attrition is:  Number of leavers over last 12 months / ((permanent headcount 12 months ago + permanent headcount today) / 2) Many people prefer to have attrition measuring just voluntary leavers, both measures are needed and you can choose what is the headline method.
• What is your retention rate? Normally calculated annually: Number of individual employees who remained employed for entire measurement period / number of employees at start of measurement period x 100

10 Recruitment metrics

• How many people are you hiring and in what location/executive department?  
• Time to fill
• Best sources of hire e.g. referral 
• How costly is hiring e.g. average cost per hire
• Vacancies per recruiter
• Number of applications 
• Number of interviews
• Job offer acceptance rate (%)  
• LinkedIn (other social?) followers 
• Glassdoor rating.

4 Demographics metrics. Who are your people?

• Gender split
• Nationality
• Diversity measures such as age, education level, ethnicity. Can further split this by location/executive department (depending on what you have today and what’s important to your organization).

5 Organizational measures

• Percentage of managers
• Span of control
• Number of people at each layer in the business
• Number of open vacancies
• Growth over time.

4 Absenteeism metrics

• How many holidays used and remaining by individuals and by the business
• Work-from-home/abroad arrangements 
• Taken/left from allowance.

8 Learning and development metrics

• Hours of learning
• Desired change e.g. behavior or business metric
• Skill improvement
• Knowledge uptake
• Number of mentorships
• Mandatory training program completion rate
• Type of learning (online vs classroom)
• Training budget spent.

2 Performance metrics

• Percentage of employees with goals
• Performance/potential/loss impact rating by location/executive function.

4 Compensation metrics

• Total payroll expenditure
• Payroll expenditure as % of revenue
• Gender pay gap
• Benefit participation rates.

3 Engagement metrics

This depends on what employee engagement tools (if any) you have in place for engagement and the score is dependent on that methodology.

• Employee engagement score by location and executive department
• Intent to stay
• Net promoter score.

These may not be the perfect set of metrics for your organization but they’re a starting point to get you thinking about what’s right.

While some of these have very obvious calculation methods, others are more open to interpretation.

The main thing to be wary of is being consistent and clear about how a metric is calculated and therefore what it means.

How To Establish Your Key HR Metrics

The key HR metrics organizations keep track of vary from business to business.

Here are some pointers for deciding which metrics will take priority.

Align with organizational goals 

The metrics you track will feed directly into your HR KPIs , and these should align with the broader goals and objectives of the organization.

For example, if you’re scaling and need to grow headcount, time-to-hire and cost-per-hire will likely be metrics you pay close attention to.

Learn what interests your stakeholders

HR metrics aren’t just for the HR departments. Senior leadership as well as individual managers and even individual contributors can benefit from this information.

When you’ve started to collect reliable data, share it with your key stakeholders and discover what’s of interest to them.

Maybe you find a particular department is having an issue with new hires leaving in their first year. Someone's likely to be interested in this!

One handy method I borrowed from marketing is to create internal personas for each of your stakeholder groups. This will help you think about who needs what information and how to present it.

How To Collect HR Metrics

Your HR data will likely live in a few different places e.g. your HRIS , learning management system , applicant tracking system , employee engagement software, or even spreadsheets.

There is also specialist people analytics software to help you collect and analyze quantitative and qualitative data.

As stated above, for each of your metrics you need to be clear about what it is, what the data source is, how it's calculated, and how we would audit the underlying process that supports it.

So, if we’re measuring the number of leavers in a month, this could be:

• What is it? Permanent employees leaving location/function/company/team in a given calendar month.
• Data source . HRIS report—leavers by month.
• How it’s calculated . Permanent employees leaving from 1st-last day of the month (garden leave calculated as last day of employment). Any leavers who are missed we recalculate for previous months and make a note in the metrics pack.
• Underlying processes . Check payroll is aligned with leavers, any leaver checklists you might have, and redundancy lists. Revisit any mistakes from previous months with clear trails back to source so you can see what went wrong.

By ensuring you have this level of rigor with each metric you will build stable, strong underlying data and processes that support the development of a more mature analytics capability in the future, as well as solid processes that underpin the whole HR team.

Presenting HR Metrics

The next challenge you have is how to share this information, visualising your data is critical because as you gather this data and share it over time it tells a story . 

Are you growing as an organization (are you growing quickly enough), is your gender pay gap widening?

These are all comparable measures that are only possible by collating and reporting on this data regularly.

In terms of how to visualize the data, here are some pointers.

• Use graphs rather than a table of numbers where possible, Excel is a great tool here
• Set it up so you can see progress over time (monthly or quarterly)
• Use your company color scheme and presentation layout
• Add simple commentary to the presentation to explain anything that isn’t clear or to contextualize the change.

The personas idea I mentioned earlier can help you with this.

Principles For Accurate HR Metrics

I once joined a company to establish the talent acquisition function. For the first 6 months, I gathered as much data as I could on our hiring practices: source/cost/time/location/function/role type—all of the typical hiring data you might expect.

I put this in various presentations to make the case for the changes I felt were necessary. Then, one day, we had a problem.

On an investor call, someone asked a question about our headcount because the numbers didn't look right. Guess what, they were right and we were wrong!

The problem landed on my desk, I can't remember why but likely because I'd tried to use data to drive action, but I do remember sitting in a stuffy meeting room for what felt like an eternity tracing through what data that was sent to our finance team, its origin, and its accuracy to try and find out how it could be incorrect in our public statements.

It came down to 2 simple problems:

1) We sent them data from our (very old, very rubbish) HR system on a set date and it transpired that people updated the system with new starters and leavers in time for payroll and not in time for this report. So the data was never correct, it couldn't be.

2) We sent them an aggregated headcount that included contractors (as that was the report that had always been sent) and nobody, as far as I could tell, ever questioned or asked what the numbers meant.

There were several other headaches as well but these were the two key points. We ended up refreshing our onboarding and offboarding processes, redoing how we calculated the headcount that we shared, and unifying those processes.

I know this seems basic but it’s a good example of how easily these things can go awry. So, some key principles to help you collect accurate data:

1) Be clear about what the metric is

2) Be clear about how it’s calculated and what your data sources are

3) Be clear that you understand and can audit the processes that feed into the metric.

Once you have a stable set of metrics, you then have the opportunity to combine and interpret them to create a picture of what’s happening in your organization and what you might want to do to change them. 

For example, if ‘time to hire’ and the recruiter’s average number of job requisitions are climbing, is more recruiters a potential solution?

Use HR Metrics To Guide Decision-making

Your HR metrics are key to both tracking and enacting change. But complex HR data analysis can only be achieved with good data—following these steps will set you up perfectly for that:

• Agree your metrics
• Be clear on calculation and make sure it’s auditable and consistent
• Display them clearly
• Repeat consistently.

If you do this, you’ll build credibility in using HR data and set your business up for more detailed analysis. 

Join The People Managing People Community

For further support using data to support talent strategy, join the People Managing People Community , a supportive community of HR and business leaders sharing knowledge and expertise to help you progress in your career and make greater impact in your org.

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People are normally the biggest cost and a critical success factor in the continued success of every business.

As we measure our business growth in terms of the number of customers, revenue, profit and value, it makes perfect sense to measure the people elements at the same time. 

They’ll enable data-driven decision-making and help you fine-tune your HR processes and create exciting new initiatives.

What are soft HR metrics?

Much of the data outlined above is hard data i.e. quantitative. Soft data is qualitative, meaning that it’s difficult to represent numerically. Soft data includes information collected from observations, interviews, surveys, and sentiment analysis. It adds an extra layer of depth to the quantitative data and can be just as valuable.

Which are the most important HR Metrics?

As discussed above, the most important HR metrics will vary from organization to organization. That being said, employee retention, turnover, time-to-hire, and demographics are generally universally valuable.

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The Difference Between HR Metrics and HR Analytics: A Comprehensive Guide

Author by : chrmp.

• HR Analytics

In today’s ever-changing industrial landscape, data is important for making informed decisions instead of intuitive ones.

With the rise of HR metrics and HR analytics, HR professionals now have better access to data that can help them better understand the workforce and drive organizational success to new heights.

In this blog, we shall explore the differences between HR metrics and HR analytics and why they’re both crucial for effective HR management and, in turn, a company’s success.

So sit back, relax, and let’s dive into the exciting world of HR data analysis!

What is HR Analytics?

HR analytics is a powerful analytical tool used by HR professionals. It is the practice of using data analysis techniques and tools to extract insights and knowledge from HR data to support data-driven decision-making that is not intuitive in the human resources function. 

HR analytics involves collecting, organizing, and analyzing large sets of employee-related data to identify patterns, trends, and correlations that can be used to form HR strategies, policies and tactics.

This can include data on employee performance, workforce demographics, turnover rates, engagement levels, absenteeism, sabbaticals and more. By leveraging HR analytics, organizations can make data-driven decisions that optimize the workforce, improve overall business outcomes, and enhance employee experience.

Why Do We Need HR Analytics?

HR analytics is essential for companies to make informed, data-driven decisions regarding their human resources function rather than depending upon intuition alone.

HR analytics can provide valuable insights into the workforce, including trends, patterns, and correlations that can help identify improvement areas and optimisation opportunities.

By leveraging HR analytics, organizations can:

1. Improve recruitment and retention:  HR analytics can help identify the sources of top talent and retention issues, enabling organizations to improve recruitment and retention strategies by curbing turnover rates.

2.Enhance employee performance: By analyzing employee performance data, organizations can identify areas where training and development programs are needed, improve welfare amenities, and offer competitive compensation specific to the industry, to enhance the overall employee experience.

3.Optimize workforce planning: HR analytics can provide insights into the workforce demographics and trends, patterns and correlations, helping organizations forecast future workforce needs and optimize workforce productivity.

4.Align HR strategies with business goals: By using HR analytics to identify the drivers of business success, organizations can align their HR goals, initiatives, drives and strategies with the overall goals of the organization.

5.Increase efficiency and reduce costs: HR analytics can help identify areas where HR processes can be streamlined or automated, resulting in increased efficiency and reduced costs to improve financial metrics like revenue and profits.

What are HR Metrics?

HR metrics are specific measurements used to track and evaluate various aspects of the human resources function. HR metrics are typically used to assess the performance, efficiency, and effectiveness of HR processes and practices and to provide insights into workforce trends and patterns. 

HR metrics include employee turnover rates, time-to-hire, training and development costs, absenteeism, skills gap and employee engagement levels.

By tracking and analyzing HR metrics, organizations can identify areas for improvement, make data-driven decisions, and ensure that HR initiatives, practices and drives are aligned with the business’s overall goals.

Why Do We Need HR Metrics?

HR metrics are important for organizations to assess, measure and monitor specific aspects of their human resources function.

By measuring and tracking HR metrics, organizations can identify areas for improvement, make data-driven decisions, and ensure that their HR initiatives are aligned with their overall business goals.

Some key reasons why we need HR metrics are:

1.Measure performance: HR metrics provide a way to measure and assess the performance of specific HR processes and practices, such as recruitment, training, or employee engagement.

2.Identify areas for improvement: By tracking HR metrics, organizations can identify areas where they are underperforming and take action to improve their HR initiatives.

3.Ensure compliance: HR metrics can help organizations ensure that they are complying with relevant govt. and company laws, by-laws and regulations, such as those related to  diversity and inclusion  or equal pay.

4.Evaluate the effectiveness of HR initiatives: HR metrics provide a way to evaluate the effectiveness of HR initiatives and drives, such as training programs or performance management systems, and make data-driven decisions about whether to continue, modify, or discontinue them.

5.Benchmark against industry standards: HR metrics enable organizations to benchmark their performance against industry standards and best practices, providing insight into how they compare with their peers and competitors.

Top 5 HR Metrics used by Organizations

Here are five commonly used HR metrics that organizations use to measure the effectiveness of their HR practices:

1.Employee Turnover Rate:

Employee turnover rate measures how many employees leave an organization over a given period, typically expressed as a percentage of the total workforce. A high turnover rate can indicate problems with employee retention, job satisfaction, or other factors, while a low turnover rate may suggest a healthy and engaged workforce.

2.Time-to-Fill:

Time-to-fill is a metric that measures the length of time it takes to fill a vacant position, from the posting of the job opening to the offer of employment. This metric can help organizations evaluate their recruitment processes, identify improvement areas, and assess the impact of external factors such as the availability of qualified candidates.

3. Cost-per-Hire:

Cost-per-hire is a metric that measures the total cost of recruiting and hiring a new employee, including advertising, recruitment fees, and other expenses. This metric can help organizations to evaluate the efficiency and cost-effectiveness of their recruitment processes and identify areas where costs can be reduced.

4. Absenteeism Rate:

The absenteeism rate is a measure of the percentage of employees who are absent from work on a given day or over a given period of time. High rates of absenteeism can indicate problems with employee morale, engagement, or workplace culture and can hurt productivity and organizational performance.

5. Employee Engagement:

Employee engagement measures how committed and satisfied employees are with their work and the organization as a whole. This metric is typically measured through employee surveys or other feedback mechanisms and can provide valuable insights into areas where the organization can improve its HR practices and foster a more engaged and productive workforce.

What’s the Difference Between HR Metrics and HR Analytics?

HR metrics and HR analytics are both essential for effective HR management but are different in terms of their scope and focus, and application. Organizations have to use an integrated approach of HR metrics and  analytics  for effective workforce management using these parameters.

HR metrics are specific measurements that track, assess and evaluate various aspects of the human resources function. They provide insight into specific HR processes and practices, drives and initiatives such as time-to-hire, training costs, or employee turnover rates. HR metrics enable HR professionals to monitor the effectiveness and efficiency of HR initiatives and identify areas for improvement and implementation to drive the organization’s success to greater heights.

In contrast, HR analytics is a broader and more complex practice that encompasses the collection, analysis, and interpretation of large sets of HR-related data. HR analytics is not limited to specific metrics but instead focuses on identifying patterns, trends and relationships between multiple data points and multiple metrics from across the myriad functions of the organization.

The purpose of HR analytics is to generate insights and knowledge that give relevant information for strategic data-driven decision-making in the HR function. HR analytics can help organizations identify workforce trends, extrapolate and forecast future workforce needs, and develop data-driven HR strategies and practices doing away with intuitional decisions altogether.

In summary,  HR metrics  are specific measurements that track and evaluate the performance of individual HR processes. At the same time, HR analytics is a more comprehensive and integrated practice that encompasses data collection, data analysis and data interpretation to provide insights and provide relevant experience information for strategic decision-making in the HR function.

While HR metrics and  HR Analytics  are essential for effective HR management, HR analytics has a broader focus. It aims to provide a more holistic bird’s eye view of the organizational workforce.

How are HR Metrics and HR Analytics Interconnected?

HR metrics and HR analytics are closely intertwined and support each other in the field of Human Resources. Here’s how they are related:

HR metrics serve as the foundation for HR analytics. Metrics are specific measurements that help HR professionals track and assess various aspects of their workforce, such as employee turnover, recruitment effectiveness, training outcomes, performance evaluations, and more. These metrics provide valuable data points and benchmarks to evaluate the current state of HR practices within an organization.

HR analytics takes this data a step further by analyzing and interpreting the metrics to uncover meaningful insights. By applying statistical methods and data visualization techniques, HR analytics professionals can identify trends, patterns, and correlations within the metrics. This deeper analysis allows HR teams to gain valuable insights into the factors influencing HR outcomes and make data-driven decisions.

In essence, HR metrics provide the raw data, while HR analytics transforms that data into actionable insights. By leveraging HR analytics, organizations can better understand the drivers of their HR metrics, identify areas for improvement, and make strategic decisions to optimize their human capital management practices.

Frequently Asked Questions

1.What are the key differences between HR metrics and HR Analytics?

Answer:  The key difference between HR metrics and HR Analytics is that HR metrics are specific measurements used to track and evaluate various aspects of the human resources function, while HR analytics is a more comprehensive practice that involves the collection, analysis, and interpretation of large sets of HR-related data.

2.How are HR metrics and HR Analytics used differently in the human resources function?

Answer: HR metrics and HR Analytics are used quite differently in the human resources function. HR metrics are typically used to assess the performance, efficiency, and effectiveness of HR processes and practices and to provide insights into workforce trends and patterns. In contrast, HR analytics generates insights and knowledge that can inform strategic decision-making in the HR function.

3.Can HR metrics be used as a part of HR analytics?

Answer: Yes, HR metrics and HR Analytics can be integrated. HR metrics provide specific data points that can be used in the broader practice of HR analytics to identify trends and correlations between multiple data points.

4.What is the scope of HR analytics compared to HR metrics?

Answer: The scope of HR analytics is broader than that of HR metrics. HR analytics involves the collection and analysis of large sets of HR-related data to provide insights and inform strategic decision-making, while HR metrics focus on specific measurements used to track and evaluate various aspects of the HR function.

5.Which one is more suitable for strategic decision-making, HR analytics or HR metrics?

Answer: HR analytics is more suitable for strategic decision-making than HR metrics. While HR metrics provide specific data points to assess performance and effectiveness, HR analytics can provide a more holistic view of the workforce, identifying trends and correlations that can inform strategic decision-making in the HR function.

In conclusion, HR metrics and HR analytics are both valuable tools for managing and optimizing the human resources function of an organization.

HR metrics provide specific measurements to evaluate various aspects of the HR function, while HR analytics involves the collection, analysis, and interpretation of large sets of HR-related data to provide insights and inform strategic, data-driven decision-making so that it can be based on hard-core data and not intuition.

By using a more integrated approach of both HR metrics and HR analytics, organizations can improve recruitment and retention, enhance employee performance and engagement, optimize workforce planning, align HR strategies with business goals, and increase efficiency and reduce costs, turnover rates and absenteeism to push up financial metrics like revenue, sales and profits for the organization.

HR metrics and HR analytics have to be used in tandem to gain an in-depth insight into the organizational workforce and identify opportunities for improvement and implementation. With the right data and analysis, organizations can effectively manage their human resources and drive overall business success to greater heights.

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Very useful information and and detailed explanation about HR metrics and HR analytics.

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HR Dashboards: Examples, key metrics, and best practices

People and HR departments are seeing an accelerated shift to data-driven models of running, managing, and reporting on their activities. There’s a rise in HR tech tools and a growing need to measure everything from turnover rate to employee wellbeing .

But if all this data overwhelms you, and you’re not sure where to start, you might want to use HR dashboards as a neat way to gather, analyze, and present data.

What is an HR dashboard?

HR dashboards are tools that allow People and HR teams to aggregate data and present it using visualization. These business intelligence tools help HR professionals get a birds-eye view of all critical metrics, keep an eye on patterns and trends, and build strategies to tackle concerns proactively.

HR dashboards also make it easy to present data to key stakeholders in a digestible, easy-to-understand way, which helps leaders understand behaviors, patterns, and HR goals better.

HR dashboard examples: 4 classics + 1 newbie

We’re not exaggerating when we say you can build dozens of different HR dashboards, but we’ve narrowed it down to 5 categories that are top-of-mind for HR managers.

Employee turnover dashboard

Employee turnover is one of the most critical HR metrics — a high turnover rate can indicate low employee engagement, dissatisfaction, and poor company culture.

HR professionals can use a dashboard to measure and monitor turnover-related data, such as:

• Turnover rate
• The avg. duration of employee tenure
• Breakdown of turnover per quarter, department, or seniority
• Voluntary vs. involuntary turnover
• Most common turnover reasons

With all this data available at a glance, you’ll be able to see patterns and negative trends and tackle their causes. For example, if your junior positions show a higher-than-usual turnover rate, it might indicate poor onboarding processes or a lack of training and management support.

This great dashboard by Lovelytics is a fantastic example 👇

Diversity dashboard

As DEIB (diversity, equity, inclusion, and belonging) initiatives become one of the essential strategies for employee retention and acquisition, companies are upping their game by tracking and measuring their efforts.

Creating a diversity dashboard is a great way to do that — especially if it includes key data points like these:

• Workforce demographics (age, gender, ethnicity)
• Breakdown of employees by ethnic groups
• Breakdown of employees by gender
• Breakdown of tenure, avg. satisfaction and engagement, and earnings per ethnic group and/or gender

The folks at Qlik did a great job showcasing what a diversity dashboard can look like with the example below:

Employee performance dashboard

HR reporting in the performance domain is no longer about days spent at work, absenteeism, or cost vs. output. It now includes other essential metrics for companies and employees that give a more holistic picture of the employee’s performance and progress. Here are some metrics for your performance dashboard:

• Soft skills like communication, teamwork, and alignment with company values
• Employee engagement and satisfaction rate
• Employee productivity
• Goals (and breakdown of the % of completion)
• Behavior rating

Lattice has great built-in performance dashboards as part of their platform that let People teams, managers, and employees stay on top of performance and always do their best work 👇

Recruitment dashboard

Talent acquisition is a critical metric for every industry and company: it’s usually cost-intensive, the success of the company often depends on its ability to attract the best people, and the recruiting processes can be long and draining.

The best HR dashboards include a recruiting section where all the key metrics can be seen at a glance:

• New hires vs total headcount on a quarterly or yearly level
• Recruiting and training costs for new employees
• Number of open positions by location, seniority, and department
• Candidate sources and their effectiveness
• Application sources

This great dashboard made with Tableau shows how comprehensive recruitment dashboards can be:

Distributed workplace dashboard

Now, the dashboards above were more or less classic — but this one is a newbie. Our workplaces have changed, and they now often include teams or individuals distributed across the US or the world.

Whether your company provides offices or gives access to flex workspaces for people to meet and connect in person — chances are you now have a Workplace and People Operations strategy to manage that is complex, dispersed, and tough to track in a single place. On top of all that, HR systems don’t let you track and manage the distributed workplace, so you can’t see the number of employees using offices or flex spaces, let alone data that is more granular than that.

With Gable’s dashboard , you get real-time insights into budget spending, space usage, collaborations facilitated, and employee satisfaction — all of which are important HR metrics (but also essential for the Workplace function).

Finally, Gable integrates with HRIS tools, so you’ll be able to sync your HR data, like departments, locations, etc., directly with Gable. This powerful dashboard lets you focus on providing employees with chances to spend their workday connecting while staying on top of trends and data at a glance.

Stay on top of your distributed workplace and manage your strategy in one place. See how >>>

Why use human resources dashboards

So, why use a dashboard if you can gather and present all this data by yourself? It boils down to three factors: time-saving, analytics, and easy monitoring .

In today’s workplace, HR teams are expected to manage and monitor everything from employee experience, performance, and engagement to attrition rates and turnover costs. Most of you will likely lack time to pull data manually and present it, even if it’s a quarterly task.

Data visualization doesn’t only help you with reporting — it also makes it easy for stakeholders to get insights they can immediately understand. This speeds up the decision-making processes and helps the company move faster on its way to achieving its key performance indicators.

Five key elements of good HR dashboards

When you’re getting started with HR analytics dashboards, keep in mind the essential features they should have to advance your reporting, monitoring, and data presentation:

• Able to pull from all your data sources . You want to pull data easily from any source you’re using: payroll platforms, recruiting tools, workplace management software, and your HRIS.
• Mobile friendly . Being able to access your HR data from a mobile device isn’t only handy, it’s a requirement in the modern workplace.
• Easy to use and share information . Using your dashboard should feel seamless, from comparing different time periods to sharing reports automatically with key stakeholders.
• Interactive and dynamic . The best HR dashboards let you zoom in on different dimensions of your data and analyze them in different ways and are collaborative, so you can work on the reports with your team.
• Offers augmented analytics . Ideally, your dashboard should be able to alert you when negative trends and patterns emerge, so you can act quickly.

Essential metrics and KPIs for HR analytics

Whether you opt for using one elaborate people analytics dashboard or several of them broken down by initiative, here are the basic HR KPIs and metrics we recommend every company keep track of:

• Employee count and type
• Demographic employee data
• The company’s turnover rate
• Average job tenure
• Employee engagement data
• Time to fill open positions
• Cost per hire and training cost
• Avg. and median salary by gender and age

Make the best of your HR data

Use data to your advantage and stay one step ahead of what’s going on in your company, from high turnover to low employee engagement. And in today’s workplace, where People and HR teams work hand in hand with other departments like Workplace and Finance, collaborating on monitoring and reporting will help you achieve synergy, align efforts, and maximize the success of your People initiatives.

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A Guide to Human Resources Management Metrics

Human resource metrics , also known as HR metrics , are crucial for organizations to track and measure the effectiveness of their human resources initiatives. Companies are increasingly recognizing the importance of people data and analytics, with 82% of executives agreeing that HR metrics are useful for their organization. This article will provide an in-depth guide to 29 essential HR metrics that organizations can start measuring today.

HR metrics help organizations gain insights into their workforce, make data-driven decisions, and improve overall HR performance. By analyzing HR data, organizations can identify areas for improvement, measure the impact of HR initiatives , and align HR strategies with organizational goals. Additionally, HR metrics enable HR professionals to demonstrate the value and impact of their work to key stakeholders.

From recruitment and employee engagement to training and development, HR metrics cover a wide range of areas. Whether it’s measuring cost per hire , employee turnover rate, or training effectiveness , these metrics provide valuable information for optimizing HR processes and driving strategic business growth .

In the ever-evolving business landscape, where talent acquisition and retention are critical, HR metrics play a vital role in shaping effective workforce management strategies. By leveraging HR analytics tools and reporting technologies, organizations can effectively measure HR performance, identify trends, and make informed decisions that drive success.

Now, let’s dive deeper into the world of HR metrics and discover how they can revolutionize your human resources management practices.

Key Takeaways:

• HR metrics are crucial for tracking and measuring the effectiveness of HR initiatives .
• 82% of executives agree that HR metrics are useful for their organization.
• HR metrics enable organizations to make data-driven decisions and optimize HR processes.
• There are 29 essential HR metrics that organizations can start measuring today.
• HR analytics tools and reporting technologies help organizations gain insights into workforce management and drive strategic business growth .

Understanding HR Metrics and Establishing HR KPIs

HR metrics, or human resource metrics , are essential data points that enable organizations to track their human capital and measure the effectiveness of their HR initiatives . By measuring HR metrics, organizations can gain valuable insights into what is working well, identify areas for improvement, and anticipate future trends. Establishing HR Key Performance Indicators (KPIs) plays a crucial role in aligning these metrics with the organization’s overall strategy, ensuring that HR efforts are in line with the company’s objectives.

“Measuring HR and its impact on the organization is critical,” emphasizes a recent study conducted with both executives and HR professionals. It underscores the significance of HR metrics and their role in driving organizational success.

HR metrics provide a comprehensive view of various aspects of the HR function, ranging from workforce management to employee engagement and organizational growth. These metrics enable HR teams to assess the effectiveness of their strategies, programs, and initiatives, empowering them to make data-driven decisions for continuous improvement.

Why HR metrics matter

• They help organizations evaluate the success of their HR initiatives and identify areas for improvement.
• They provide insights into workforce trends, enabling organizations to anticipate future talent needs.
• They align HR efforts with organizational strategy , driving overall business success.
• They enable HR teams to measure employee engagement , satisfaction, and retention, leading to a more productive and satisfied workforce.

Some common HR metrics and their significance

Note: The above table presents just a few examples of HR metrics. Organizations should identify and track metrics that align with their specific goals and objectives.

Importance of HR Reports for Strategic Decision Making

HR reports play a crucial role in strategic decision making for organizations. While many HR professionals acknowledge the importance of HR metrics, there is often a lack of regular reporting to the executive teams . This gap presents an opportunity for HR teams to collaborate with executives to understand their reporting needs and provide them with the necessary HR metrics.

HR reports should include metrics related to employee satisfaction and employee engagement , as these factors are key indicators of HR success and their impact on the overall organization. By including these metrics, executives can gain deeper insights into the effectiveness of HR initiatives and make data-driven decisions that align with the organization’s strategic goals.

“Regular and comprehensive HR reports are invaluable tools for executive teams , providing them with the necessary information to make well-informed strategic decisions. By including employee satisfaction and engagement metrics, HR reports enable executives to understand the impact of HR initiatives on employee well-being and overall organizational performance.”

When HR teams collaborate with executives and provide meaningful HR reports, it creates a stronger alignment between HR initiatives and the organization’s strategic objectives. This alignment enables proactive decision making and the implementation of effective strategies to enhance employee satisfaction , engagement, and productivity.

Moreover, HR reports allow executives to identify trends and patterns in employee data. These insights can help drive transformational change, optimize workforce planning, and address potential challenges or gaps in HR programs. By leveraging HR reports, organizations can foster a culture of continuous improvement and ensure that HR initiatives are aligned with the ever-evolving needs of the business.

Key Benefits of HR Reports for Strategic Decision Making:

• Provide data-driven insights into HR initiatives
• Enable alignment between HR and organizational objectives
• Highlight employee satisfaction and engagement metrics
• Identify trends and patterns in employee data
• Facilitate proactive decision making and strategic planning

By recognizing the importance of HR reports in strategic decision making and leveraging the insights they provide, organizations can drive positive change, optimize HR initiatives, and ultimately achieve strategic business success.

Essential HR Service and Software Metrics

HR service and software metrics are crucial for organizations to measure the effectiveness and efficiency of their HR functions. By tracking these metrics, companies can make data-driven decisions, optimize processes, and drive improvements in employee satisfaction, engagement, and overall performance. Let’s explore some of the key metrics that organizations should consider:

1. Cost of HR per Employee

The cost of HR per employee is an important metric that helps organizations understand their HR expenditure. It measures the total cost of HR activities divided by the number of employees. This metric provides insights into the financial resources allocated to HR functions and allows organizations to assess the efficiency of their HR operations.

2. HR Software Employee Participation Rate

The HR software employee participation rate measures the engagement and adoption of HR software among employees. It calculates the percentage of employees actively using HR software tools and platforms. A higher participation rate indicates better employee engagement and utilization of HR software resources, leading to increased efficiency and productivity.

3. Ratio of HR Professionals to Employees

The ratio of HR professionals to employees is a metric that provides insights into the capacity and workload of the HR department. It measures the number of HR professionals relative to the total number of employees. By analyzing this ratio, organizations can determine if their HR team is adequately staffed to handle the HR needs of the workforce or if additional resources are required.

4. ROI of HR Software

The ROI of HR software measures the cost-effectiveness and value generated by investments in HR software. It compares the financial benefits gained from using HR software, such as increased efficiency and reduced administrative costs, to the initial investment. A positive ROI indicates that the HR software is delivering value to the organization.

These HR service and software metrics provide valuable insights into the effectiveness of HR functions, the engagement of employees with HR software, the workload of the HR team, and the return on investment from HR software. By regularly measuring and analyzing these metrics, organizations can optimize their HR operations, enhance employee experiences, and drive sustainable business growth.

Key Recruitment Metrics for Hiring Success

For organizations, optimizing the hiring process and ensuring successful talent acquisition are crucial goals. To achieve these objectives, it is essential to track and analyze recruitment metrics that provide insights into the effectiveness and efficiency of the recruitment process. This section explores key recruitment metrics that organizations should focus on to drive hiring success.

Acceptance Rate

The acceptance rate metric measures the percentage of offers extended to candidates that are accepted. A high acceptance rate indicates a successful recruitment process, indicating that the organization is attracting and selecting candidates who align with their expectations and requirements. On the other hand, a low acceptance rate may signal potential issues in the recruitment process or misalignment between the organization and candidates.

Cost per Hire

The cost per hire metric quantifies the monetary investment required to hire a new employee. It includes expenses related to sourcing, interviewing, background checks, and onboarding. Analyzing the cost per hire helps organizations evaluate the efficiency of their recruitment strategies and identify areas where cost optimization is possible.

Demographics

Demographic metrics provide insights into the composition of the workforce, such as age, gender, ethnicity, and educational background. Understanding the demographics of the organization’s talent pool helps in evaluating diversity and inclusion efforts, ensuring fair representation, and identifying any potential biases in the recruitment process.

The headcount metric refers to the total number of employees within the organization. Tracking headcount allows organizations to monitor workforce growth and plan for future hiring needs. It also provides a basis for understanding the overall impact of recruitment efforts on the organization’s size and structure.

New-Hire Turnover

New-hire turnover measures the rate at which newly hired employees leave the organization within a specified period, typically the first year. High new-hire turnover can indicate issues with the onboarding process, training programs, or cultural fit. This metric helps organizations identify opportunities for improvement in ensuring the retention and long-term success of new hires.

Time to Hire

Time to hire measures the number of days it takes to fill a job opening from the moment it is posted until the candidate is hired. Analyzing time to hire provides insights into the efficiency of the recruitment process, helping organizations identify bottlenecks and streamline their hiring workflows.

Time to Productivity

Time to productivity measures the duration it takes for new hires to reach their full potential and contribute effectively to the organization. Tracking time to productivity helps organizations assess the effectiveness of their onboarding and training programs, identify areas for improvement, and ensure that new hires are integrated efficiently into their roles.

By monitoring and analyzing these recruitment metrics , organizations can make data-driven decisions to optimize their hiring processes, enhance candidate experiences, and ensure the successful acquisition of top talent.

Employee Engagement and Retention Metrics

Employee engagement and retention metrics are essential for organizations to measure and improve employee satisfaction, engagement, and overall retention rates. These metrics provide valuable insights into the effectiveness of HR initiatives and help organizations identify areas for improvement.

Employee Satisfaction

Employee satisfaction is a key metric that measures how happy and content employees are in their roles. It can be measured through surveys, feedback sessions, or employee satisfaction scores. By tracking employee satisfaction, organizations can gauge the overall level of employee happiness and identify any factors that may be negatively impacting engagement and retention.

Retention Rate

The retention rate is the percentage of employees who remain with an organization over a given period. A high retention rate indicates that employees are satisfied and engaged, while a low rate may highlight issues that need to be addressed. Regularly tracking and analyzing the retention rate can help organizations identify trends, such as departments or positions with high turnover, and develop targeted strategies to improve retention.

Talent Turnover Rate

The talent turnover rate measures the rate at which employees with high potential or critical skills leave the organization. By focusing on talent turnover, organizations can identify areas where they may be losing top performers and take proactive steps to retain them. Implementing targeted development programs and recognition initiatives can help organizations reduce talent turnover and retain their most valuable employees.

Total Turnover Rate

The total turnover rate measures the overall percentage of employees who leave an organization within a given period, including voluntary and involuntary separations. Tracking the total turnover rate provides a comprehensive view of employee attrition and can help organizations understand the impact of turnover on their workforce. Analyzing the reasons behind turnover can help organizations identify areas for improvement and implement strategies to increase retention.

Voluntary Turnover Rate

The voluntary turnover rate measures the percentage of employees who choose to leave the organization. This metric specifically focuses on employees who resign or choose not to renew their employment contracts. High voluntary turnover rates can indicate underlying issues such as poor management, lack of growth opportunities, or a negative work culture. By tracking this metric, organizations can identify patterns and take action to improve retention and engagement.

Performance Management Metrics for Assessing Employee Performance

Performance management metrics are invaluable tools for organizations to assess and improve employee performance . By utilizing key metrics, organizations gain valuable insights into individual and company-wide performance, enabling them to set goals, align performance with company objectives, and evaluate the impact of employee contributions on overall company success.

One essential performance management metric is company performance . This metric measures the overall success and financial health of the organization. It provides organizations with a holistic view of their performance and serves as a benchmark for evaluating employee contributions.

Employee performance metric focuses on evaluating the individual performance of employees. It enables organizations to measure employee productivity, quality of work, and their ability to meet performance expectations.

Goal tracking is another vital metric that helps organizations monitor progress towards achieving specific objectives. By tracking goals, organizations can identify areas of improvement, recognize top performers, and ensure alignment with strategic priorities.

Assessing performance and potential is crucial for identifying high-performing employees who possess the capabilities and potential for growth and development within the organization. By evaluating both current performance and future potential, organizations can identify and nurture talent for key positions.

Revenue per employee metric provides insights into the productivity and effectiveness of the workforce. It calculates the amount of revenue generated per employee, indicating the efficiency of the organization’s human capital and its ability to generate value.

Effective performance management metrics allow organizations to measure, analyze, and improve employee performance , leading to enhanced productivity, engagement, and overall business success.

To illustrate the importance of performance management metrics , the following table showcases a sample of key metrics and their significance:

Training and Development Metrics for Employee Growth

Training and development are vital for nurturing employee skills and driving organizational growth. Effective training programs require constant evaluation and measurement to ensure that they contribute to employee development and overall success. By utilizing training and development metrics , organizations can assess the effectiveness of their training initiatives, improve employee engagement, and optimize their learning programs.

Here are some key metrics that organizations should consider when evaluating their training and development programs:

• Training Completion Rate: This metric measures the percentage of employees who successfully complete the training program. It helps gauge the level of engagement and commitment to training within the organization, providing insights into the effectiveness of the program.
• Time to Completion: Tracking the time it takes for employees to complete the training program is essential. This metric ensures that the training is well-paced and aligned with employees’ learning abilities, preventing unnecessary delays and optimizing the use of resources.
• Training Effectiveness: This metric focuses on the impact of training on employee performance. It assesses whether the training program has improved employees’ skills, knowledge, and job performance. Collecting feedback from participants and supervisors can provide valuable insights into the effectiveness of the training.
• Training Expenses per Employee: Understanding the cost-effectiveness of training programs is crucial for budget allocation and resource optimization. This metric calculates the average training expenses incurred per employee, including costs for materials, trainers, and technology.

By analyzing these metrics, organizations can identify areas of improvement and optimize their training and development initiatives to nurture employee growth and enhance organizational performance.

HR Analytics Tools for Data-Driven Decision Making

HR analytics tools are essential for organizations seeking to make data-driven decisions. These tools enable the collection and analysis of people data , facilitate the generation of HR reports, and provide valuable insights into workforce analytics . With the help of HR software, such as BambooHR, HR departments can streamline the reporting process, making it easier to collect and analyze data efficiently.

By leveraging HR analytics tools, organizations can make informed decisions based on accurate data. These tools enable the identification of trends and patterns within the workforce, helping organizations develop effective strategies for talent management and business growth.

One example of an HR analytics tool is BambooHR, which offers a range of features designed to simplify and enhance HR reporting . Through its intuitive interface, BambooHR allows HR professionals to generate comprehensive reports and visualize key HR metrics . The platform enables the analysis of data related to employee performance, turnover rates, and workforce demographics , among others.

Additionally, HR analytics tools enable data-driven decision making by providing insights into employee engagement, productivity, and performance. By analyzing this data, organizations can identify areas of improvement and implement targeted strategies to enhance employee satisfaction and engagement.

Furthermore, HR analytics tools aid in workforce planning and forecasting. By understanding the current state of the workforce and analyzing historical data, organizations can make informed decisions regarding talent acquisition, development, and succession planning.

In summary, HR analytics tools empower organizations to make data-driven decisions based on accurate and comprehensive people data . These tools, such as BambooHR, streamline the reporting process and provide valuable insights into workforce analytics , enabling organizations to develop effective strategies for talent management and drive business growth.

Human Resources Management Metrics , also known as HR metrics, are essential for effective workforce management and strategic business growth . By tracking key HR metrics , organizations can measure the impact of their HR initiatives, make data-driven decisions, and drive improvements in employee satisfaction, engagement, and retention.

Implementing HR analytics tools and software enables organizations to collect, analyze, and report on HR data, providing valuable insights for strategic planning and decision making. With a comprehensive understanding of HR metrics, organizations can optimize their human resource strategies and drive success in today’s competitive business landscape.

By leveraging HR metrics and analytics, organizations can identify trends, address challenges, and proactively plan for the future. Through workforce management strategies informed by HR analytics, businesses can effectively allocate resources, maximize employee performance, and foster a culture of continuous improvement.

As the HR landscape continues to evolve, it is crucial for organizations to embrace HR metrics and analytics as a key driver of strategic business growth. With the right HR metrics and analytics tools in place, organizations can make informed decisions, enhance their workforce management practices, and thrive in an ever-changing business environment.

Source Links

• https://www.bamboohr.com/blog/key-hr-metrics
• https://www.visier.com/blog/top-10-strategic-hr-ta-metrics/
• https://www.forbes.com/advisor/business/hr-metrics/

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Popular topics

One of the biggest goals for any company is to use the power of their workforce to improve their business. HR analytics aims to do just that. It helps you collect and analyze all HR data, showing you exactly where you need to improve. How you use this tool will depend on your business and your goals. 

Here’s everything you need to know about it, along with some HR analytics examples that will get you on the right path from the start.

What is HR analytics? 

HR analytics is the process of collecting, analyzing, and reporting on HR data to improve business outcomes and make informed decisions about your workforce. It includes all data related to your human resources, including the time to hire, time to productivity, retention, engagement, and more.

Some companies also use the terms people analytics and workforce analytics . These are similar concepts, but they’re not truly the same. As the name suggests, people analytics work with data relating to people. That can mean employees, but it can also mean those outside the company, including customers.  

Workforce analytics work strictly with data related to your workforce. Employees, freelancers, gig workers, and even consultants all fit this category.

All types of analytics have a similar goal: to help businesses make data-informed decisions about their workforce and their business processes.

How to use HR analytics 

There’s no single recipe for success with HR analytics . It all depends on your goals and your strategy. Here are a few steps to help you get started on the right path.

Define your goals. Don’t forget to make them SMART—specific, measurable, achievable, relevant, and time-bound. The better defined your goals, the easier it will be to succeed with HR analytics.

Collect accurate data. Gathering data for the sake of having data is pointless. Choose the data that fits with your goals, and is accurate and up-to-date. You can use both internal and external sources, automation tools, or manual collection.

Choose the tools for data analysis. Analyzing data is central to HR analytics, but doing it manually will be an impossible task for most businesses. Choose a tool that easily integrates with your systems and helps you expedite and automate the process.

Data analysis. Depending on your goals, you may use one or several types of analytics. Options include: 

Predictive analytics , which guides you in forecasting future HR-related outcomes.

Prescriptive analytics , which help you understand the steps you need to take to reach a certain goal.

Diagnostic analytics , which help you understand why something happened.

Descriptive analytics , which provides a summary of historical trends to help you better understand current ones. 

Encourage data-driven decisions. HR analytics can quickly become a waste of resources if you don’t use data in your decision-making process. Make data part of all your processes, from hiring to compensation and performance reviews.

8 HR analytics examples 

There are many ways to use HR analytics. Whether you choose predictive or prescriptive analytics, there are several ways in which HR analytics can help you.

Examples of predictive analytics in HR 

Predictive HR analytics uses statistics and historical data to help you make predictions about future trends. Here are a few examples.

Employee turnover prediction. Understanding what might drive employees to quit and when that might happen is critical for any business. HR analytics allows you to see what factors influence these decisions so that you can leverage the data and improve retention.

Performance prediction. When trying to create programs to boost performance, you need a clear understanding of what drives someone to be a top performer. With predictive HR analytics, you can see how likely your programs are to succeed and create specialized programs that will make a real impact.

Succession planning . To create a strong succession planning program, you must identify the employees most likely to make good leaders. Predictive analytics can guide you in the selection process and help you create programs that will be successful.

Recruitment success . Predicting if a candidate will succeed in a role can help you acquire better talent. Enhancing your recruitment process can improve performance and speed up productivity.

Examples of prescriptive analytics in HR 

Prescriptive analytics takes predictive analytics one step further. Predictive analytics showed you what might happen. Prescriptive analytics helps you find out what you can do about it. Here are four examples.

Retention strategies. Knowing when and why employees might quit is great, but you can’t stop there if you don’t want to lose your top talent. Prescriptive analytics can show you specific retention strategies that can appeal to your employees.

Recruitment strategies. Talent acquisition is a critical process. That’s not only because of its costs but also because the success of the entire company depends on it. Prescriptive analytics can help you find strategies to attract top talent, improve the offer to acceptance rates, and more. 

Diversity and inclusion initiatives . DE&I is not just a buzzword. It should be a priority for every company. Using prescriptive analytics will guide you in choosing the best DE&I initiatives based on where you are today. 

Internal mobility tactics. Employees enjoy working with companies that offer them opportunities for lateral and vertical movement. With prescriptive analytics, you can discover the most effective tactics for internal mobility , mentoring , and more.

HR analytics metrics to measure

HR metrics are essential in assessing the success of any initiatives within your company. They’ll show you how well something is working and they’re a good way to spot negative trends. Here are four HR analytics metrics to track.

Time to fill. The time to fill (or to hire) is an excellent measure of how well your talent acquisition program works. The more time you need to fill a position, the more resources you waste, and the more ineffective your recruitment program is.

Employee turnover rates. This metric assesses the success of your retention strategies. It is especially valuable when using predictive HR analytics. It helps you analyze the correctness of your forecasts and adjust your processes accordingly.

Promotion and internal mobility rates. Track the rates of vertical and lateral movements within the company. The higher the number, the better your succession planning and internal mobility strategies. When employees can be promoted to new positions, it shows you have a healthy talent pipeline with plenty of development opportunities.

Diversity and inclusion metrics. You may have guessed it already, but these metrics show you the success of your DE&I initiatives. Alongside HR analytics, they can help you create a more inclusive culture, where everyone feels welcome and has equal opportunities.

Examples of companies using HR analytics 

Knowing the benefits and how to use HR analytics is one thing. But seeing it in practice is always better than just going through the theory. Let’s look at some companies that have successfully implemented HR analytics.

One way global commerce company eBay uses HR analytics and insights is to make data-driven decisions that improve the employee experience . Scott Judd, Senior Director of People Analytics & Technology shares,

"Employees in many ways are the most important asset that any company has, and you need data to understand how you can help them stay with your company and help them improve. Analytics is a great way to drive those discussions with data and help make the future more exciting for employees and better for your clients."

By using HR analytics across the employee lifecycle, eBay can discover new ways to increase retention like promotions, compensation changes, and career development plans.

2. Providence

Providence uses HR analytics to improve hiring strategies. In a tight labor market, their team was able to use insights to accurately forecast vacancies and proactively hire the right talent to ensure they have the right people in the right roles at the right time— ultimately saving the company $3 million .

By centralizing their people and business data, Providence gained powerful, digestible insights that business leaders use to make informed hiring decisions impacting the workforce and the bottom line.

3. Protective Life

Protective Life uses HR analytics to predict employee turnover to slow resignations, measure DE&I progress, and engage business leaders beyond HR. Matthew Hamilton, VP of People Analytics & HRIS, shares,

"Getting data out into the hands of leaders and democratizing data is really important. A lot of change happens at the frontline or mid-level manager level. So it's really important to get the relevant insights into their hands so they can use the data and ultimately pull those levers of change to improve the employee experience, diversity, talent, and acquisition."

By using HR analytics and putting people insights directly in the hands of leaders, they're able to arm key decision-makers with the insights they need to impact business performance .

More about HR analytics

HR analytics tools help companies collect, analyze, and glean insights from their HR data. These are the key features to look for in an HR analytics tool.

Effective use of HR analytics and reporting within an organization helps to drive evidence-based and objective decision-making. Learn more here.

Finding and analyzing the right data using HR analytics helps companies make the right decisions for their workforce and organization. Here's everything you need to know about HR analytics .

Predictive HR analytics let you make predictions and forecasts about future performance based on historical HR data.

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9 Tips for Using HR Metrics Strategically

Combine workforce measures with broader business data to solve organizational problems.

Introduction

​“The story of why a company is performing as it is isn’t going to come from HR data. Period. Full stop.”

That’s an odd statement from someone who makes his living studying the impact of HR and human capital metrics, among other things. But data science can be a strange business—and Alec Levenson, senior research scientist at the University of Southern California’s Center for Effective Organizations , says one of the most important things HR professionals should understand about HR data is its limitations.  

While scores of articles have been written about the potential for people analytics to transform human resources from an operational function into a strategic resource, so far HR’s fundamental hurdle has been its inability to quantify its ultimate impact.

​A key to changing that, experts say, is to go beyond the HR numbers. To demonstrate how workforce measures can impact the bottom line, HR professionals must meld those metrics with business data.

“Metrics essentially give us a way of qualifying the health of our organization, and, to that end, HR metrics are now different,” says Ross Sparkman, head of strategic workforce planning for Facebook in Menlo Park, Calif. “They’re measuring how the HR function is doing as a whole and also how we’re leveraging the people in the organization to maximize the performance of the company.”

That’s the goal, but the reality often falls short. “Most people use data the way drunks use the lamppost: for support rather than for illumination,” says Alexis Fink, Intel’s Portland, Ore.-based general manager of talent intelligence and analytics. HR, she believes, should focus less on responding to decisions that have been made and more on training executives “to come to you further upstream, to influence the decision.” For that to happen, HR needs to have a better grasp of how metrics and analytics work.

Start with these nine steps.

1. Understand the Role Metrics Play in Talent Analytics

​First, you have to recognize the difference between metrics and analytics. “HR metrics are operational measures, addressing how efficient, effective and impactful an organization’s HR practices are,” Fink explains. “Talent analytics, on the other hand, focus on decision points, guiding investment decisions” that impact the workforce and related matters.

Essentially, metrics use data to assess things like efficiency and performance, while analytics harness those measures to help people understand or predict how changes will affect an outcome. For example, analytics that combine information on employee performance levels and retention data may show you that, once workers reach a certain level of proficiency at their jobs, they’re prone to leave. That, in turn, can help you look for ways to address whatever dynamic is nudging those employees toward the door. You may find that your competitors offer better compensation or have better career advancement programs and opportunities.

Put another way, metrics tell you what is going on, while talent analytics get at what to do about it, driven by both good data and good science. “Metrics are about getting the numbers right, and analytics are about finding answers in the data,” Fink says.

​“Ultimately, metrics define what you’re shooting for. They define your objective,” says Michael Housman, workforce scientist in residence at people analytics firm hiQ Labs in San Francisco. “They shouldn’t be a moving target. If you want people to stay in their job, for example, you look at things like turnover and attrition. The goal is to know what you’re trying to improve.”

2. Understand the Question First, Then Look at the Metrics

​Though metrics can be used to monitor performance, most data scientists emphasize their use in gathering the intelligence needed to resolve an underlying issue or create a new strategy.

“Take turnover. High is bad, low is good. But what story is it telling?” asks Jennifer Currence, SHRM-SCP, president of OnCore Management Solutions , a human resource strategy consulting company in the Tampa Bay, Fla., area. “Why is it high or low? Is it recruiting? Demographics? Who’s retiring? Is it high in just one department? Why? Is there not enough training there? If not, who’s the manager for training in that area? The initial metric gives you a start to digging down deep.”

The point is to “get past the ‘what’ and fully understand the ‘why,’ ” says Cecile Alper-Leroux, vice president of human capital management innovation for Ultimate Software in Weston, Fla. “The benefit of using metrics is that the decisions are better-informed and backed by facts—rather than hunches—and thus make key people decisions far more ‘sellable’ to the business.” That gets to the heart of the next point.

3. Always Build a Business Case

​It has been said, and said repeatedly, that human resources struggles for relevance because it doesn’t speak the language of business: numbers. “HR has to be able to show how its dollars impact ROI [return on investment]. It has to stop acting as a cost center,” Sparkman says. “You can’t act like your costs just happen to have a good impact.”

Instead, focus on building the business case for what the department is doing. As an example, Fink talks about digging into employee departures. After calculating the exit rate, look into what might be driving workers to leave your organization. You might find that certain qualities in a manager discourage some types of employees while other characteristics deepen those same workers’ commitment to the company. Delving further may show that matching managerial styles to specific workers’ personality types will reduce turnover dramatically. From there, you can forecast how much money the organization will save in hiring and training costs.

‘Ultimately, metrics define what you’re shooting for. They define your objective.’ —Michael Housman, hiQ Labs

“Nothing matters unless you can prove it,” says Greta Roberts, CEO of Talent Analytics Corp. in Cambridge, Mass., emphatically. “HR makes mistakes by focusing on a metric and not tying it into the business. For instance, you can’t assume higher engagement leads to less turnover. You have to demonstrate it.”

[SHRM members-only online discussion platform:  SHRM Connnect ] 

4. Recognize that HR Metrics Alone Offer Limited Value

​“You can’t look at metrics in isolation. They have to be looked at holistically,” according to Rishi Agarwal, San Jose, Calif.-based partner and people analytics leader for PricewaterhouseCoopers . That’s why most data scientists believe HR measurements by themselves rarely provide much value to the organization as a whole. 

“Really, cost-to-hire should be cost-to-good-hire,” says Ben Yurchak, president of KnowClick , an analytics company in Bryn Mawr, Pa. “One’s an operational metric, and the other’s a quality metric.”

A caveat: Though quality measures might get you closer to tracking real business goals, compiling them may be easier said than done. “To determine the cost of a quality hire, you need time and information from other departments,” Yurchak notes. “Cross-functional measurement is harder to do, but it connects the dots.”

5. Identify the Workforce-Driven Components of Business-Driven Metrics

​Here again, the process of connecting the dots should be done to solve a business problem that has already been identified.

For example, if executives find that your company’s work contains too many errors, the solution may lie in studying turnover and performance data, Roberts says. “You’re not using data to figure out the issue,” she notes. “You’re figuring out the issue and then knowing what metrics to examine to find the answer.” Is revenue down because turnover is exceptionally high and thus impacting production? Are performance and productivity down because workers have too much to do in too little time?

Facebook closely monitors its number of daily active users. That information hints at whether the company is hiring the kinds of engineers who generate a positive user experience. “Whatever drives the business has to drive HR numbers,” Sparkman says. “HR should be waiting for the top-down strategy to be put in place, then strategize about how HR can help the company deliver.”

​“You have to parse the business challenge to figure out where the workforce element comes in,” says Andrew Courtois, a strategic workforce planner with a California-based global technology company he asked not to be identified. “If you can do that, you can make a better case to management. Show how improving the workforce element improves what management wants to improve.” Remember, he adds, “senior leaders understand things from the cost and finance perspective. HR has to think much like the CFO thinks about ROI.”

6. Learn to Ask the Right Questions

​Another trick to using metrics successfully is to be curious. “We have to always ask why, why, why?” Sparkman says. When you get into that habit, you start to ask better questions and learn to challenge the answers.

If your organization’s executives decide to hire 10 people in Zimbabwe, for instance, inquire about the business reasons driving the decision and whether they’ve considered all of the skills the new hires will need to succeed in such a remote location. 

By doing that, “you’re helping the managers understand how far-reaching their decisions are,” Sparkman says. “Why this location? Why these skills? Why this time frame? It helps you get more clarity.”

​While you’re doing this, be sure to consider the context. As you approach each challenge, Agarwal says, use a “metrics map” as your guide:

• Understand the business strategy.
• Tie the business strategy to the HR strategy.
• Ask the critical human capital questions.
• Determine the measurements that will help you address the issues at hand.

As you work through the process, it’s important to have a clear understanding of individual roles, adds Chris Gagnon, senior solutions partner at global management consultant McKinsey & Co. in the New York City area. “Analytics can identify traits of success to identify who’ll succeed, especially for pivotal jobs that drive a lot of value,” he notes.

7. Work Across the Organization

​It’s vital to collaborate with people in other departments to get the information you need to develop meaningful measures. Given that many organizations regard the human resource department as more operational than strategic, that means being proactive. “HR’s going to have to go and get the numbers,” Fink says.

Incorporating HR data into business strategy requires something of a cultural shift. “You’re changing the paradigm,” Sparkman explains. “This is a commitment, and it’s really important that HR both knows and works with others to understand this. There’s going to be a lot of education involved.”

Exactly how the department gets its message out depends on the size of the employer. “At smaller companies, you just start doing it,” says Cezary Kuziemski, head of HR for insurance underwriter Hamilton USA in Princeton, N.J. “Go to Finance and say, ‘Here’s what I can do for you,’ then do it. You have to speak the other’s language. You have to be humble and admit what you don’t know and ask questions. You have to come to the other function with more than thoughts, but something concrete.”

​At bigger organizations, try running a pilot program with a function whose manager has an interest in data, Kuziemski suggests. The effort could be about improving sales performance or reducing turnover in IT. What’s important is that you create a case study that proves you can solve an issue in a measurable way.

Also, be ready to take advantage of opportunities as they arise. “People come to HR and ask for reports,” Fink says. “Use your answer as a Trojan horse to demonstrate the amount of information you can get from analytics. By studying the data, you’ll be able to answer questions that the business didn’t know how to ask.” For example, you might use metrics to better identify ready-to-hire candidates who can decrease cycle times to fill jobs and thus save money.

8. Embrace Measurement

​HR professionals often argue that much of their work is intangible and hard to measure, but there’s always a way to quantify people metrics. It just requires time, experimentation and setting your own benchmarks if published ones aren’t available. For example, you might train people in new procedures and compare the outcome with the results of previously established practices, Courtois suggests.

One thing is certain: Developing base lines can require a significant investment of time and effort. As an example, Sparkman talks about time-to-hire—how many days, weeks or months it takes to acquire top talent in a particular area. “With these numbers in place, trends can be established,” he says. “Has the time to hire increased or decreased over time? Does it vary by month, quarter or season? How do university graduation dates affect the number?”

‘[I]t makes sense to go out and solicit feedback on how the business leaders perceive HR’s performance on the metric in question.’ —Ross Sparkman, Facebook

Once you’ve identified such trends, “it makes sense to go out and solicit feedback on how the business’s leaders perceive HR’s performance on the metric in question,” Sparkman says. “So HR leaders could ask their clients if their top talent was being sourced fast enough to meet the demands of the business.” That information will help to establish if the base line needs to be improved and, if so, by how much.

​And you may have an average cost-per-hire metric for all positions, but the real meat lies in how the number varies by role. “A clerk’s different from an engineer,” notes Andrew Mariotti, a senior researcher at the Society for Human Resource Management in Alexandria, Va. “You have to look at all of the expenses involved—like ads and travel—and look at each position to figure out how large is the candidate pool and the competition.”

Of course, as you examine all this data, you’ll need to decide what trade-offs to make in developing an optimal solution for your company. “Let’s say your organization enjoys a high profit per employee (PPE), but turnover is higher than industry average and long hours and lack of work/life balance are cited as primary reasons for employee dissatisfaction,” Alper-Leroux says. “If you decide to focus on improving the employee experience by adopting more-flexible policies and discouraging overtime, it’s possible your PPE will drop. The impact of this must be measured against the average cost per hire and your own corporate culture and values.”

“You can measure. You just have to figure out how to do it,” Courtois says. 

Admittedly, that’s easier in some cases than others. For example, linking the right type of call center employee directly to customer satisfaction is pretty straightforward. “But how do you measure lawyers, scientists and the like?” Housman asks. “It really depends on what you’re trying to do as an organization.”

9. Don’t Compromise on Data Quality

​Finally, always bear in mind this basic point: The intelligence you glean from analytics will only be as good as the data included in your metrics.

In his book Strategic Analytics: Advancing Strategy Execution and Organizational Effectiveness (Berrett-Koehler Publishers, 2015), Levenson notes, “More often than not, balanced scorecards use the ‘best available’ metrics—that is, the least worst of what is sitting around.” 

Metrics’ value “is about actively choosing things you track because you want to manage your business better,” he says.

​To help identify what those things should be, find data that meets the “CARE” criteria created by Levenson; include only information that is:

Consistent —The data underlying the metric must be measured steadily over time.

Accurate —Information should be precise, with few to no errors in recording it.

Reliable —Your metrics must be a dependable proxy of what you’re ultimately trying to assess.

Efficient —The cost of collecting the data must be minimal.

“One thing people don’t realize is it’s all a system,” Fink observes. “Data has to be of high quality. We’ve invested in making sure it’s good, quick and accessible. Otherwise, it’s like building a seaside mansion without a foundation.” 

Mark Feffer is a freelance business writer based in Philadelphia.

Illustration by James Fryer for HR Magazine.

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The future of work is already here. Human resources departments are using artificial intelligence (AI) tools to streamline operations, enhance employee experience, and drive better hiring decisions. These innovative technologies are revolutionizing HR processes by leveraging machine learning algorithms, language processing, and predictive analytics.

Below is a running list of some of the most promising AI tools HR teams use today. Did we miss one of your favorites? Let us know by filling out this short form . 

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Clockwise is an AI-driven calendar optimization platform that helps teams reclaim their time and improve productivity. By analyzing calendars and scheduling patterns, Clockwise automatically schedules meetings to minimize interruptions and maximize focus time, enabling teams to work more efficiently and achieve better work-life balance.

Glean is an AI-powered work assistant that connects all your company’s knowledge in one place. Using advanced enterprise search technology to retrieve the most relevant, up-to-date information, Glean generates highly personalized answers grounded in your company’s unique enterprise knowledge. All answers are secure, permissions-aware, and fully referenceable back to source documentation.

While not exclusively an HR tool, Zapier is an invaluable AI-powered automation platform that connects apps and tools to streamline workflows and eliminate manual tasks. HR professionals can leverage Zapier to automate repetitive processes such as data entry, file management, and communication between HR systems. By creating "Zaps" (automated workflows), HR teams can save time, reduce errors, and improve efficiency in various HR tasks, such as onboarding, offboarding, and employee data management. Zapier's versatility and ease of use make it an essential tool for HR professionals looking to optimize their workflows and focus on strategic initiatives.

Primarily known as a writing assistant, Grammarly ’s AI-powered platform offers valuable tools for HR professionals to enhance communication and written content. With its advanced grammar and spelling checks, contextual suggestions, and tone detection features, Grammarly helps HR professionals ensure that emails, job postings, and other written materials are clear, concise, and professional. By improving the quality of written communication, Grammarly enables HR teams to convey messages effectively, uphold the organization's brand image, and foster positive interactions with candidates, employees, and stakeholders.

ChatGPT is a versatile tool that HR professionals can utilize for various tasks. From drafting job descriptions and email templates to answering employee inquiries and providing virtual assistance, ChatGPT's natural language understanding capabilities enable it to generate human-like responses to a wide range of HR-related queries. HR teams can leverage ChatGPT to streamline communication, automate repetitive tasks, and provide timely support to employees, candidates, and colleagues.

Calendly incorporates smart scheduling features that benefit HR professionals. With its intuitive interface and customizable scheduling options, Calendly streamlines the process of booking interviews, meetings, and appointments. By syncing with users' calendars and suggesting available time slots, Calendly eliminates the back-and-forth of scheduling, saving time for both HR professionals and candidates. Additionally, Calendly's reminder notifications and integration with popular calendar platforms ensure that appointments are kept punctually, improving efficiency and organization within the HR department.

Trello is a versatile project management tool that HR professionals can leverage to streamline workflows and organize tasks. While not inherently AI-powered, Trello offers features such as customizable boards, task cards, and automation capabilities that enhance collaboration and productivity. HR teams can use Trello to manage recruitment pipelines, track onboarding processes, and coordinate employee training programs. By visualizing tasks, assigning responsibilities, and setting deadlines, Trello helps HR professionals stay organized and ensure that projects are completed efficiently. Integrations with other AI tools and platforms further enhance Trello's capabilities.

Asana is a powerful project management tool that empowers HR professionals to streamline workflows, track tasks, and collaborate effectively. While not AI-driven, Asana offers features such as task assignment, deadline tracking, and project visualization that enhance productivity and organization. HR teams can use Asana to manage recruitment processes, track onboarding tasks, and coordinate employee development initiatives. By centralizing project communication, providing clarity on responsibilities, and facilitating transparency, Asana helps HR professionals ensure that initiatives are executed efficiently and goals are achieved effectively. Integrations with other AI tools and platforms further extend Asana's capabilities, enabling HR teams to optimize their processes and drive organizational success.

Employee Development

Lattice’s personalized growth plans.

Lattice’s vision is to make employee career growth more accessible to everyone, leveraging AI to save time for managers and direct reports alike. It’s our goal to make it easy to create individual development plans with just a click, based on career tracks, performance reviews, and feedback. Learn more about our vision for Lattice AI here .

WorkRamp is a comprehensive learning management system (LMS) that enables organizations to create and deliver customized training programs. With features such as interactive content creation, assessments, and analytics, WorkRamp empowers companies to onboard employees, develop skills, and drive performance improvement effectively.

360Learning

360Learning is a collaborative learning platform that enables organizations to create, deliver, and track training programs. With interactive courses, peer learning, and real-time analytics, 360Learning empowers companies to foster a culture of continuous learning and development, driving employee engagement and performance improvement.

Pinnacle offers personalized development tips and coaching for early-to-mid-level managers, delivered via Slack & Teams, allowing managers to learn seamlessly during their daily activities, wherever they are, in just five minutes a day with the power of AI.

Gloat 's AI-powered talent marketplace facilitates internal mobility and career development within organizations. By matching employees with relevant opportunities based on skills, interests, and career goals, Gloat fosters a culture of continuous learning and professional growth.

Cloverleaf 's automated coaching turns assessment results into actionable, personalized learning in the flow of work. Using technology-derived micro-nudges to reinforce training, employees can develop according to their context at any moment.

TalentGuard

TalentGuard ’s AI-driven talent management platform facilitates career pathing, succession planning, and performance reviews. By analyzing employee skills, aspirations, and development needs, TalentGuard helps organizations cultivate talent and retain top performers.

BetterUp is an AI-driven coaching platform that focuses on employee development and well-being. Using advanced analytics and machine learning algorithms, BetterUp assesses individual strengths, challenges, and goals to provide personalized coaching sessions and resources. Through a combination of virtual coaching, goal tracking, and feedback mechanisms, BetterUp helps employees unlock their full potential, improve performance, and cultivate resilience.

Pymetrics utilizes neuroscience-based games to evaluate candidates' cognitive and emotional traits. By analyzing gameplay data, Pymetrics generates comprehensive candidate profiles, facilitating unbiased hiring decisions. Its data-driven approach minimizes biases, improves candidate matches, and optimizes team dynamics.

Recruiting and Talent Acquisition

ModernLoop is a hiring experience platform that automates interview scheduling so you stay focused on talent. Features includes AI-powered scheduling, interviewer training, recruiting analytics, and more. ModernLoop also integrates with the rest of your tech stack, including communication tools like Slack and applicant tracking software like Greenhouse.

Findem is an AI-powered talent intelligence platform that helps companies identify, attract, and retain top talent. By leveraging predictive analytics and machine learning algorithms, Findem provides insights into talent trends, market dynamics, and competitor benchmarks, enabling HR teams to make data-driven decisions in talent acquisition and management.

Goodtime is an AI-driven interview scheduling platform that helps companies streamline their hiring processes. By analyzing interviewers' calendars, candidate preferences, and scheduling constraints, Goodtime automates interview scheduling, reduces time-to-hire, and improves candidate experience, enabling HR teams to focus on strategic recruiting initiatives.

BrightHire is an AI-powered interview platform designed to improve the quality of candidate interviews and hiring decisions. Using natural language processing and machine learning algorithms, BrightHire analyzes interview recordings and transcripts to provide feedback on interviewer performance, candidate responses, and overall interview effectiveness. By identifying strengths and areas for improvement, BrightHire helps HR professionals refine their interview processes, reduce bias, and select the best-fit candidates for roles. 

Pillar is an interview intelligence platform that coaches and guides teams to hire faster, better, and more equitably. It utilizes natural language processing and machine learning algorithms to analyze interview recordings and transcripts, providing valuable insights into candidate responses, interviewer performance, and overall interview effectiveness. 

Metaview is an AI-driven interview platform designed to optimize the hiring process. The tool analyzes interview recordings and transcripts to provide valuable insights into candidate performance, interviewer effectiveness, and overall interview quality. By identifying strengths and areas for improvement, Metaview helps HR professionals enhance their interview processes, reduce bias, and make data-driven hiring decisions. Its intuitive interface and actionable feedback empower interviewers to conduct more effective interviews, resulting in better candidate matches and improved hiring outcomes.

Textio harnesses the power of AI to revolutionize job postings. By analyzing language patterns and predicting candidate responses, Textio helps HR teams craft compelling job descriptions that attract diverse talent pools. Its insights optimize inclusivity, improve candidate engagement, and enhance the overall quality of applicants.

HireVue redefines the interview process with AI-powered video interviews. Through facial recognition, tone analysis, and language comprehension, HireVue assesses candidates' soft skills and cultural fit. This not only saves time for HR teams but also provides valuable insights for making informed hiring decisions.

Textkernel 

Textkernel offers AI-based semantic search and matching tools tailored for talent sourcing and candidate screening. By analyzing resumes and job descriptions, Textkernel's technology enhances the precision of candidate matches, saving time for HR professionals and improving the quality of hires.

X0PA AI automates various HR tasks, from resume screening to interview scheduling. By analyzing historical hiring data, X0PA AI identifies patterns and recommends data-driven strategies. This empowers HR teams to optimize resource allocation, enhance candidate experiences, and drive organizational efficiency.

Harver's AI-driven platform evaluates candidates' skills, competencies, and cultural fit through interactive assessments. By analyzing candidate responses, Harver provides insights into potential job performance, enabling data-driven hiring decisions. Its predictive analytics minimize hiring risks and maximize candidate success.

Visage employs AI to analyze candidates' facial expressions and body language during video interviews. By decoding non-verbal cues, Visage offers deeper insights into candidates' personality traits and emotional intelligence. This holistic evaluation enhances HR teams' ability to identify top talent and foster inclusive workplaces.

Predictive Index

Predictive Index offers AI-driven tools for talent optimization, including behavioral and cognitive assessments. Using these inputs, Predictive Index predicts job performance and cultural fit. Its data-driven approach empowers HR teams to build high-performing teams and reduce turnover rates.

Ideal 's recruitment automation platform leverages AI to streamline hiring workflows. By automating resume screening, candidate sourcing, and outreach, Ideal identifies top talent efficiently. Its machine learning algorithms learn from past hiring decisions, enabling proactive candidate engagement and strategic resource allocation.

HR teams today face increasing demands to streamline processes, enhance productivity, and drive organizational success. The emergence of AI-powered tools has provided HR leaders with invaluable resources to meet these challenges head-on. From revolutionizing recruitment processes to optimizing employee development initiatives, AI tools offer a wide array of capabilities for HR professionals. To suggest additional AI tools for HR, complete this short form . To learn how Lattice AI empowers teams and elevates your performance and engagement strategy, sign up for a free tour . 

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✨ Disclaimer: This content was developed with the help of artificial intelligence, though reviewed, edited, and approved by (real) humans.

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