A hand raised to a floating diagram about human resources and its different initiatives

Key HR Metrics You Should Be Tracking

5 min read | Jun 17, 2024
 Marta Gongos- Ad Culture By Marta Gongos

Human resources metrics give employers insights into human resources initiatives like hiring talent, retention, and employee training. HR professionals rely on these numbers to improve the department’s effectiveness in keeping employees engaged and maintaining competitiveness while reducing costs.

We’ll jump right into the right HR metrics to help you achieve business success. Keep reading to learn more about the different types of HR metrics and get tips for tracking HR metrics correctly.

Cost per Hire and Time to Hire

The recruitment process may look simple, but it gets technical once you factor in key HR metrics like cost per hire and time to hire. 

Cost per hire refers to the cost spent on internal and external costs for talent acquisition, training, and online resume databases. To get the cost per hire, divide the total cost of the hiring process by the number of new employees. The result gives you a budget to follow without affecting the quality of employees being hired. 

Time to hire tracks the number of days between the day a job seeker applies for a role and the day they accept the offer. It measures your hiring efficiency and shows how fast your company fills a vacancy. Get the time to hire by subtracting the day a candidate accepts an offer from the day they send an application.

Read more: 6 Recruitment Challenges and How to Overcome Them

Time to Productivity

HR employees use time to productivity as a key HR metric measuring how long an employee will work at full capacity. It involves counting from the start date until the day when high productivity is observed. 

It’s one of the key KR metrics that shows how effective the onboarding, training, and development programs are. The result varies per employee based on their department and job position, but an employer should achieve a short time to productivity. It may help in increasing cost savings and achieving goals on time.

A recruiter reviewing a candidate’s resume on a laptop

Image Source: Canva

Employee Turnover Rate

Turnover rate refers to the number of people leaving the company over a given period. It greatly affects employee morale and applicant attraction, which is why employers should strive for a low turnover rate. 

The lower the turnover rate, the more attractive your company is to applicants since it signals favourable work conditions and environment. To get the turnover rate, divide the number of employees who left by the total number of employees then multiply by 100.

Employee Retention Rate 

One of the HR metric examples you should track is the employee retention rate, which measures the company’s ability to keep employees and maintain a stable workforce. To compute this, divide the number of employees at a chosen end period by the number of employees at a start period. Multiply the result by 100 to get the rate.

Employers should strive to have high employee retention rates because it means less time and resources are spent on recruiting. Instead, you focus on keeping employees engaged and satisfied.

Engagement Rating

Of all the HR metrics examples, employee engagement rating is one you should remember the most. This shows your company’s productivity and presents how much an employee likes working with the employer. A high rating means more engaged employees, translating to better results and higher customer satisfaction.

Use the employee net promoter score (eNPS) to measure how likely your employees are to recommend your organization to their loved ones. You can also conduct performance reviews to gauge their engagement quantitatively.

A group of employees huddled together in a meeting room

Image Source: Canva

Internal Promotion Rate

Another HR metric to track is the internal promotion rate which shows how many employees are promoted internally. Its formula is as follows: divide the number of internal promotions by the total number of employees who started a new role in the same period. Then multiply the result by 100.

Organizations may strive for a high promotion rate since internal career advancement opportunities motivate employees to work hard and invite new employees to apply for a role. It also implies your company has a diverse workforce that’s free of bias.

Total Cost of Workforce

The total cost of workforce (TCOW) is the accumulation of expenses an organization spends on its workforce. It includes salaries, benefits, and operational costs for HR initiatives like hiring and company development. To compute your TCOW, simply add compensation, benefits, and other costs.

This metric reveals an organization’s labour costs and main drivers. Shedding light on this allows company heads to manage budgets more accurately, making it a crucial metric that, if managed poorly, can leave a business vulnerable to financial instability.

Use the Key HR Metrics to Stay on Top of Your Company

The different types of HR metrics will help you get an overview of your company’s expenses, employee satisfaction, and time spent on acquiring new talent.

If you’re struggling with HR metrics examples related to hiring, Ad Culture can lend a helping hand. We can lower your cost per hire and time to hire by finding talented candidates that match your organization’s needs. 

Do you have questions about what other HR metrics to track? Send us a message!

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