Human resources (HR) metrics are a way to measure how human resource activities contribute to your business performance. They calculate the cost and benefits of people aspects of the business, such as the number of people at various stages in the hiring pipeline, labor law compliance, employee retention, performance management, worker satisfaction, or completion of training programs.
You can keep track of the HR metrics that are valuable to your business with an HR management platform like Zenefits. It gives you all the tools you need to drive productivity and increase employee engagement, including goal management, 360-degree performance reviews, and one-on-one meeting management, all in one place. Start a free 14-day trial.
What Are HR Metrics?
Human resources metrics are data that can help you assess whether your people activities are generating the results you want. They also help you monitor productivity and performance of your HR team. We’ve listed 39 HR metrics in total and chunked them into various aspects of your human resource process, such as employee productivity, recruitment, and compliance.
Most Common HR Metrics for Small Business
Below are human resources metrics examples that companies use to evaluate the performance of their HR team and their HR ― people-focused ― activities. We’ve identified these seven as the most common that you’ll want to measure periodically, especially if your HR is outsourced.
These first seven common HR measurements help you evaluate how your team is doing.
1. Revenue per Employee
Revenue per employee helps you determine the value of employees to your business. Workers, on average, should bring enough revenue to justify their employment. To calculate revenue per employee, determine what your total revenue is for a time frame, such as a month, and divide that by the total number of employees you have.
Revenue per employee = Total revenue ÷ Total number of employees
There’s no recommended range, as it could vary from $200 per day to thousands or more depending on your industry. What’s important is that on average, employees bring in more than what it costs to hire them, and even that may not be true in a startup situation when a salesperson may not make their first big sale for months.
For example, let’s say in March your total revenue was $80,000, and you had seven employees. Your revenue per employee is $11,428 that month ― $80,000/7 = $11,428. Tracking this number over time will give you a sense of how efficient and/or productive your employees are.
2. Cost per Hire
Cost per hire measures what you’re paying to recruit and onboard each new employee. It may cost as much as $4,200 per worker or more. To determine your cost per hire consider your recruiting costs, the cost of an applicant tracking system (ATS), manager’s time interviewing candidates and your onboarding and training costs.
Cost per hire = All recruiting and HR staffing costs ÷ Number of new hires
For example, let’s say you hired an HR manager this year who spends half their time recruiting. You also spent $600 on software, $3,500 on referral fees, and about 200 hours of managers’ time interviewing candidates and onboarding new hires. If that added up to $36,500 and resulted in nine new hires this year. Your cost to hire would be $4,055 ― $36,500/9 = $4,055.
3. Employee Turnover
Employee turnover is used to determine whether your employees are happy or not. A 20% turnover rate is average across most industries, and a good goal to strive for would be 10% or less. To calculate employee turnover first determine how many employees you have, and then divide that number by the number of employees who have quit or been fired.
Turnover rate = Number of employee terminations ÷ Average number of employees
For example, if you had 88 employees in January 2018, and you now have 100 employees in January 2019, your average number of employees would equal 94 (88+100)/2 = 94. If 22 employees quit or were fired in that time frame, your turnover rate would be 23% (22/94 = 23).
Turnover can be calculated for any time frame: month, quarter, or year. Turnover can also be by division, location, department, or manager to get a better sense of staffing issues. For additional details and variations read our article on employee turnover rate.
4. Overtime Percentage
Calculating overtime as a percentage tells how efficient your scheduling is. Most employers would prefer to avoid paying overtime as it’s costlier by half. To calculate overtime as a percentage, you’ll determine how much you paid in payroll per pay period and then determine what percentage of those payroll dollars were paid as overtime.
Overtime percentage = Overtime pay amount ÷ Total payroll
For example, let’s say you pay employees every other week, and your total payroll last pay period was $14,000, of which $2,500 was paid as overtime to complete a job by a client’s deadline. About 18% of your payroll dollars would have been spent on overtime ($2,500/$14,000 = .18).
Some businesses use absenteeism as a measure of employee health and wellness as it’s common knowledge that unhappy employees or those with health or home life issues take more time off. A rate of 2.5% is typical. To calculate absenteeism, you’ll need to add up all the missed workdays and divide that number by the total workdays scheduled.
Absenteeism = Workdays missed ÷ Total workdays scheduled
For example, if one of your restaurant employees missed four of 19 work shifts, their absence rate would be 21% (4/19=.21). This rate is best tracked per employee over time to determine patterns of behavior that may be a cause for concern. You can also use it to determine if one manager’s employees are absent more often than another’s.
6. Length of Service
Length of service is another indicator of employee job satisfaction and workforce happiness. The longer your employees stay, the more stable your business becomes; employee longevity reduces your hiring costs as you’ll have fewer employees to replace. To calculate the length of service, subtract each employee’s hire date from today’s date, and then divide by the number of days in a year.
Length of service = (Today’s date – Employee’s hire date) ÷ 365
For example, let’s say Jaime started June 15, 2011, and today is January 1, 2019. When you subtract the number of days, you come up with 2,757, which you then divide by 365 (the number of days in a year). The result is 7.55 years. To get an average for the whole company, you would total all employees’ years of service and then divide by the total number of employees.
7. Job Satisfaction Rate
Job satisfaction can be measured on a survey, much like a customer satisfaction survey. You can use any kind of scale, but the key is to measure a baseline at some point in time and then periodically check to see if employees appear to be more or less satisfied over time. HR managers often refer to this type of information as employee engagement.
Job satisfaction rate = Number of people who report being satisfied ÷ Total number of employees
For example, let’s say you have 40 employees. Using a five-point scale like an Amazon rating, 32 of your employees say they are satisfied (four) or highly satisfied (five). That’s an 80% job satisfaction rate (32/40=.80). To create your own employee job satisfaction survey, check out our article on employee engagement.
The remaining HR metrics assess the effectiveness of various HR functions, such as recruiting and training, in addition to measuring workforce productivity and labor costs. Finally, if you want to measure your labor law compliance or employee engagement, which can alert you to potential problems so that you and your HR team can address them, you’ll want to check out the last two categories below.
HR Metrics for Employee Productivity & Performance
HR metrics like labor costs and profit per employee can help the business gauge employee performance and understand how staff contributes to the bottom line. Hiring talent that’s matched to the job, conducting effective training and managing employee workloads all contribute to how productive employees are. Here are some ways to measure employee productivity.
8. Profit per Employee
Measuring profit per employee can ensure you aren’t over or understaffed. You can calculate your yearly or monthly profit and divide it by your number of employees.
Profit per employee = Business profit ÷ Number of employees
For example, you may have added sales team members to improve your revenues, but are they adding dollars to the bottom line? This HR metric will let you know if more is better, or whether your increased staffing is merely eating into your profits.
9. Timesheet & Scheduling Match
This helps you determine how closely the number of hours scheduled are in line with the number of hours worked. This gives you insight into over or understaffing and is useful for retail shops, restaurants, and other shift based sales businesses. Add up all scheduled hours for required shifts. Then, calculate the number of hours worked that week and notice the difference. Your goal should be less than 5% difference.
Timesheet / Scheduling match = Number of scheduled hours ÷ Number of hours worked
For example, you may be understaffed if your business is busier than you expected, and you’ve asked employees to stay late. You may be overstaffed if you’re sending employees home early. Matching your scheduling to your business needs saves money as well as improves employee morale as few want to lose hours or be asked to stay late.
10. Health Care Costs per Employee
This metric helps you understand how much of your budget is being spent on employee health insurance costs. To calculate it, sum up what you contribute to your employees’ health care premiums over a time frame, such as a month or a year and divide it by the number of your employees who are using health insurance benefits.
Health care costs per employee = Total health care costs ÷ Number of employees signed up for health care
For example, you may find that few of your employees are using their company-provided health insurance, and you’d be better off setting up a flexible spending account (FSA) that they could use to purchase health insurance on their own. Alternatively, you may find this data helps you when negotiating with a new health care provider.
11. Billable Hours per Employee
If you have a small project management firm, or marketing firm, or another business where you bill out to clients, you will want to use this metric to figure out if your staffing is in alignment with your client needs. Law firms also commonly use this HR metric and have a minimum number of hours they expect each lawyer to bill for each month. To calculate it, first determine your time frame: week, month, quarter, or annual. Then, take the number of hours you billed out and divide it by the number of your employees.
Billable hours = Billable hours ÷ Total hours worked
Target about 35 billable hours per week for full-time employees. Any less and they may be spending too much time on internal time-wasters like email or nonvalue-added projects.
12. Average Time Until Promotion or Pay Increase
This HR metric measures how long it takes for an employee, on average to be promoted or receive a pay increase. It sounds like an odd metric until you consider whether you’re losing employees around the two- to five-year mark after not getting a promotion. To calculate it, take your employee base and determine how long it took for any of them to be promoted or receive a pay raise. Then, divide the amount of time by the number of employees that were promoted or given a raise.
Average time until promotion = Date of pay increase or promotion – hire date
The result will be in the number of days, but you could convert it into months or years by dividing by the appropriate number of days (30 or 365, respectively). For example, If you have 10 employees, three of whom have been promoted, and these three on average waited 18 months to get a promotion, then 18 months would be your average time until promotion.
13. Cost of HR per Employee
If you have an HR rep or more than one person who manages HR activities such as recruiting, conducting new hire orientation and managing training, then this is how much you pay the HR team vs how many total employees you have. To calculate it, add up the total salary and benefits package of your HR team and divide by the number of employees.
Cost of HR per employee = Total HR salary and benefits ÷ Number of employees
This is an efficiency metric. For example, if you have all salaried, full-time employees, you may need an HR person by the time you hit 50 people. However, if you run a restaurant with a part-time hourly staff, you might not need a full-time HR staff person until you have closer to 100 workers as you may not need to manage benefits.
Using an HR and payroll system like Zenefits, you’ll know each pay period what your HR salary and benefits cost. You’ll also know how many employees you have, making this metric easy to calculate. In fact, with Zenefits, you may not need HR staff at all as it provides labor law compliance and HR onboarding in one platform. Try it free for 14 days.
HR Metrics for Training & Development
Since effective training and coaching often result in more productive employees, many organizations track HR metrics related to employee development costs and training effectiveness.
14. Training Spend per Employee
This metric determines how much money you spend on employee training. You calculate it by determining the cost of employee training, and some businesses include the labor cost of employee hours spent in training classes as well. Also include the travel costs, course fees, the cost of your learning management system, and the time spent administering employee training, such as setting up courses and printing certificates.
Training spend per employee = Total training costs divided by ÷ Number of employees
For example, sending each of your service employees to an out of town training class can be costly due to travel, meals, and time away from work. That’s in addition to the cost of the workshop. Knowing what you’re spending on training, can help you determine if it’s worth it, using the next metric below.
15. Training Return on Investment
While this requires a bit more number crunching, it answers the question, “is our training paying off?” To calculate it, you’d determine employee productivity based on performance metrics which could range from sales performance to customer satisfaction, or net promoter scores. You’d then compare those before and after results with your training spend to determine how much more productive employees are vs how much money you spent on training.
Training return on investment (ROI) = Cost of employee training ÷ Value of increased performance
For example, let’s say you choose to send five of your customer service reps to training. Consider measuring their results before and after training to see if they now have fewer complaints, spend less time on routine issues, answer more calls per day, or enter data more accurately into your CRM system. That lets you know your training whether your training is paying off.
16. Time to Productivity
Time to productivity is an HR metric that’s calculated as a time frame: number of days, weeks, or months. You’d need to use a performance management system like Zoho Perform, and then track how long it takes for a new hire to get to full productivity.
Time to productivity =
Date new hire hit the target (as defined in your performance management system) – New hire start date
For example, if a fully productive salesperson earns $500 a day on revenues, how many days, weeks or months does it take a newly hired salesperson to hit that target? Alternatively, if the average wait staff can handle six tables during the rush, how long until your newly hired wait staff can manage six tables at once?
17. Above Average Performance Management Ratio
This is a measure of how many people are performing at a high level per your performance review system. Unless you have a performance management system in place with a quantified scoring system like using rating scales of one to five or one to 10, this is somewhat subjective and hard to calculate.
Above average performance management ratio = Number of employees rated above average ÷ All employees
If you have a performance management system that rates employee performance using points, you will want to figure out the cut off for an above average performer like 70 out of 100 points, and then determine how many employees meet that out of the total number of employees.
If you want your team to develop new products, new ways to excite customers, or better ways to manage internal processes, you’ll want to measure your innovation pipeline in terms of the number and quality of ideas. Consider providing a way to gather and measure new ideas, such as with a software tool like monday.com.
Innovation = Number (or value) of successful product or process ideas ÷ Total number of suggestions
You might measure innovation success by determining how many successful product or market launches you had last year based out of all the product ideas that were sourced and evaluated in your pipeline. If you’re just beginning an innovation pipeline, you may start by tracking the percent of employees contributing ideas or the total number of ideas contributed.
HR Metrics for Recruitment & Hiring
If you have an HR team that manages your recruiting function, you can use several metrics to determine how well they’re doing. In larger firms, these HR metrics are tracked by individual recruiter so that you can see which hiring team members are doing a better job at sourcing, selecting and onboarding new hires.
These HR metrics home in on recruiting and performance. If you are a performance-driven company, such as a company with sales or client quotas, this section should be useful for you.
19. Time to Hire
Recruiting processes can take far too long at some companies, and it can mean that you lose talent. Having a recruitment process that takes less than four-to-six weeks to fill positions is best to save time and money. To calculate time to hire, you’ll subtract the date of the employee’s first interview from their start date or hire date.
Time to hire = Start date – Date of first interview
For example, if Susan had her first interview on February 15, and was hired April 15, it took 60 days to hire her. If you want the average, sum the number of days that each job you offered took to be filled from the time the candidate started interviewing, and then divide by the number of jobs.
20. Annual Recruiting Costs
Similar to tracking your cost per hire, you may also want to manage what you are spending on recruiting, such as the cost of your recruitment software and the cost to sponsor job posts. You also should include the work hours your HR and management team dedicated to recruiting, such as reviewing resumes, phone screens, and interviewing. To calculate it add up all the time and expenses for recruiting in one year.
Annual recruiting costs = Total off all hiring expenses the year (software + advertising + fees)
21. Offer Acceptance Ratio
This is a simple metric showing what percentage of people you offer jobs to accept them vs how many decline them. This may indicate whether your job offer is on target or too low and whether your benefits and culture are in sync with what candidates want. A good target is to have 70% to 90% of your job offers accepted. To calculate it, divide the number of offers accepted over the number of offers extended.
Offer acceptance ratio = Number of offers accepted ÷ Total job offers extended
22. Ghost Rate
Ghosting is when job candidates accept an offer but don’t show up the first day for work. You should strive for a rate of zero or no ghosting. However, businesses that hire a lot of people, entry-level staff, or part-timers may find they sometimes have no-shows.
Ghost rate = Number of candidates who fail to show up on the first day ÷ Total hires
For example, if you confirm 10 jobs for server positions in your new restaurant and four fail to show up, your ghost rate is 40%. This may be an indicator you’re not hiring the right staff, not paying enough or you may need to stay in closer touch with applicants and candidates between the time they accept the offer, and the day they are scheduled to start work.
23. New Hire Fail Rate
The new hire fail rate shows how many employees voluntarily leave, or quit, your company after starting. You can calculate it based on a target, such as new hires completing 90 days of training, or by their first performance review. Similar to the ghost rate, it can indicate whether a change is needed in your selection process to clarify job expectations better. Perhaps your business needs to improve its onboarding and training process to help new hires feel welcome and productive.
New hire fail rate = Number of new hires that quit or are fired ÷ Total new hires in that time frame
For example, if 20% of your new hires are fired within the first month, or 10% of them quit, it may be that your hiring process is not robust enough, and you’re bringing in mismatched or unqualified candidates. You can also measure this based on source, hiring manager or HR recruiter to determine if most of the ineffective hirings are coming from one or more pipelines.
24. Employee Referral Program Success
If you have an employee referral program as one of your recruitment strategies, you’ll want to make sure it does what it’s supposed to ― create a pipeline of qualified employees. To calculate it, determine how many roles you’ve had open and the number of referrals you’ve interviewed and found qualified.
Employee referral program success = Number of referrals ÷ Number of open jobs
For example, if 10% of your new hires are coming from referrals, that’s great! Those candidates cost less to recruit and are typically hired faster. However, they don’t have to make it all the way through to hire. It depends on what you define as a successful referral. If you’ve had none, you might want to rethink your referral program.
Human Resources Metrics Focused on Employee Engagement
These human resources metrics are broad categories focused around what we call “soft skills.” These are employee satisfaction metrics that can measure employee morale and culture and how they correlate to the bottom line.
Communication should be strong, respectful, transparent and consistent with the company culture you are trying to create. A high level of communication means there are very few incidents of miscommunications that result in stress, tension or a call to HR. You can determine how well your organization is communicating across verbal, electronic, and written channels using survey tools like SurveyMonkey.
Environmental metrics identify the kind of workplace your office has. Is it one that people enjoy working in? Some companies prefer quiet office spaces while others thrive on loud, open office floor plans. Neither environment is bad nor good ― it depends on who is working there, and whether they’re satisfied with that environment. To calculate it, you’ll want to conduct an employee survey, or you can also go with a general gut instinct, such as on a one to 10 scale, how happy are people working in this environment and their workspaces?
27. Collaboration & Teamwork
A classic goal for improvement is for companies to be more collaborative and use teamwork more wisely. However, how can you measure this? Perhaps you implemented a collaboration tool like Slack to improve teamwork. Has it been effective in fostering a team environment? Have conflicts reduced? Are projects getting done faster? Ask your managers and your employees what they think.
28. Mission & Vision Alignment of Work
One of the most important components in employee engagement is connecting an individual and team performance to the mission, vision, and goals of the business. Before you can calculate alignment, you will want to have a top-down goal setting session and cascade the subgoals to inform what people do. A performance management system can help.
Alignment = Number of goals aligned ÷ All work activities and goals
29. Employee Wellness
To keep productivity up, you will want to evaluate how well your environment allows employees to take care of themselves in physical, mental, emotional and spiritual senses. You can measure everything from the number of employees who smoke to the number of sick days taken or frequency of EAP visits. How you measure it depends on what behaviors you’re trying to improve.
Critical HR Compliance Metrics
Depending on the size of your organization, you’ll want to gather HR metrics that need to be reported to various government entities such as the Equal Opportunity Employment Commission (EEOC) and Affordable Care Act (ACA), that are required when your business reaches a certain size, such as 50 or 100 employees.
30. EEOC Metrics
Employers with more than 100 employees need to provide a report each September to the EEOC. The data is based on how your employees and applicants self-identify into the protected classes, like race and sexual orientation, across your employee base. However, no one is obligated to self-disclose his or her identification.
To calculate it, prepare a confidential survey on the basic protected classes for every employee. Here is a good resource if you have to file an EEOC report, but smaller businesses can also use it as a sample for what you should ask in your survey.
31. Benefits & ACA Compliance
Once your business has 50 or more full-time-equivalent (FTE) employees, you’ll need to provide metrics to support ACA reporting and prove that you’ve offered health insurance to your team. Here’s information on how to complete your ACA reporting, which may be completed by your benefits provider. For example, Gusto is an HR or payroll provider that helps you obtain benefits and provide mandatory ACA reporting.
32. Pay Equity
Pay equity is a way to measure that your employee compensation is fair. You calculate it by comparing variables like worker performance, education, experience, and management or supervisory levels to ensure that employees in like jobs are being paid equitably across gender, for example. To learn more read our article on pay equity.
Clever HR Metrics Used by Small Business Pros
We found business experts using creative HR metrics to improve their employment brand, support a healthy work culture and measure workplace performance. While these may not be the standard metrics used by all HR professionals, you may find that they supply exactly the kind of data you need to create a great workplace environment.
33. Employee Net Promoter Score
“Tracking the right HR metrics is vital to small business success. Sadly, it seems many small business HR leaders talk the talk, but can’t walk the walk, when it comes to being a data-driven organization. A 2017 survey from software vendor Sage found that while 83 percent of HR leaders agree that all people decisions should be based on data, only 37 percent of them used data to solve people management problems.
“I think if small businesses have to start somewhere, they should start with this HR metric to not only gauge the health of their business but also to communicate to leadership the value that HR brings to the organization. The eNPS [employee net promoter score] is the simplest, quickest way to measure employee engagement. It tells you how much of your workforce is enthusiastic about their work, committed to the company and championing your organization to others. Consider a pulse survey tool or an employee engagement system to monitor this.”
― Brian Westfall, Senior HR Analyst, Capterra
34. Diversity & Inclusion
“More than ever, diversity and inclusion are (or should be) areas of focus within an organization. Having data on diversity is essential to ensure the appropriate programs are in place to recognize and support a diverse workforce. Organizations should also be able to talk about their diversity initiatives during hiring campaigns. Much of this information is collected at time of hire; however, using a survey tool can help collect data that is not stored in an HR or payroll system.”
― Richard Pummell, Human Resources Lead, Develop Intelligence
35. Percent of New Hires Who Leave Within 90 Days
“The one metric that Jobvite provides that startles many HR managers is that around 30% of job seekers have left a job within 90 days of starting.”
― Matt Singer, Vice President of Marketing, Jobvite
To calculate this, divide the number of new hires who quit in the first 90 days by the total number of new hires in that same time frame.
Percent of new hires that leave in 90 days = New hire quits (within 90 days) ÷ All new hires
36. Employee Engagement Survey Data
“Twice a year we partner with Gallup ― a national research and consulting firm ― to track employee engagement and suggest ways to help attract and retain top talent. Once someone is hired, our engagement scores measure how well company leadership treats our employees and provides a positive and supportive working environment.”
― Marshall Staton, Director of Human Resources, Aeroflow Healthcare
37. Executive Perceptions vs That of Employees
“Turnover data from Paycor shows a mismatch between what execs think matters and what employees think matters. Paycor recently surveyed more than 700 CFOs [chief financial officers], CEOs and HR leaders about their people management practices. Here is a summary of the findings.”
― Alex Harrell, Business Compliance, Paycor
38. Human Capital Supply Chain Survey Data
“Operations teams already sufficiently quantify production output. HR can and should be tracking the efficiency and effectiveness of the internal human capital supply chain. Survey tools are more important ― and should be leveraged more ― than iterative performance review tools. Surveys enable us to collect business intelligence about employees’ experiences while they are learning. How that information and those learnings do/do not allow employees to thrive tells us where to invest further, where to abandon efforts and, lastly, how to train managers to continue to develop talent efficiently.”
― Charles Rodriguez, Vice President of Human Capital Management, Adams Keegan
39. One-on-One Management Meeting Frequency
“Metrics are all the age … and all too often occupying too much of HR’s time. Want to know what’s happening? Talk to your employees. The best metric I use as an HR exec is asking my managers how often they have lunch with their employees? When the number is zero, I know they are not engaged in their staff.
“We have plenty of metrics to review, turnover, absenteeism, high OT not correlated with sales volume … all tell you a picture. But, my managers that spend time with their employees never show up on my radar. The breaking bread metric is the best predictor of highly engaged and productive workers.”
The Bottom Line
Monitoring your HR team performance and employee HR metrics can provide you data to improve your people strategy. While HR is often seen as a cost center HR metrics will give you the insight you need to know if your HR department or person is making a difference at your business and to determine how to improve performance while reducing your people costs.
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