Necessary HR Metrics You Should be Measuring

In an organisation, keeping track of all spending and the benefits gained from what you spend is mandatory. In that regard, organisations should also measure the work of the HR team to get a proper indication of various aspects of the employees, such as growth, retention, development, and engagement.


Measuring these aspects will help the employer identify the areas requiring immediate attention. Using various HR metrics, various insights can be collected and acted upon to better employees’ lives.


What Are HR Metrics?

HR metrics, or HR key performance indicators, are figures that help the organisation keep track of the efficiency of the human resource team. Performing this analysis helps to find out how much human resources contribute to the overall success of your organisation.

Organisations use HR metrics to measure the core and non-core areas of an organisation’s human resources process, such as recruitment, employee engagement, culture, diversity, and employee retention.


Key HR Metrics to Measure

The roles of the HR team are aplenty. To manage all these roles and use suitable metrics for them. It is essential to group all the metrics so they are easier to handle.

The following are some core areas to group the HR metrics:

  • Recruitment
  • Engagement and Retention
  • Time Tracking
  • Revenue


Recruitment Related HR Metrics

The recruitment process is the initial stage where the candidates learn about the company and its culture. Just like how employers assess candidates and their skills, candidates assess the organisation and its values. Recruitment KPIs can also offer various insights relating to an organisation’s hiring process.


  • Employee Headcount

Employee headcount is simply the count of the total number of employees in your organisation. This can also be applied on the team or department level to get the count of employees. This HR metric is essential since some other metrics rely on this.

  • Demographics

Demographics refer to the various data about your organisation regarding the employees’ age, gender, nationality, education level, and experience. Tracking these details can give you a detailed report of your employees and the requirements they might need.

  • Offer Acceptance Rate

The offer acceptance rate gives you the percentage of the candidates who have accepted your job offers. To calculate the offer acceptance rate, divide the number of candidates you extended the job offer to by the number of candidates who accepted the job offer. 

  • Time to Productivity

Every new candidate will require some time to become accustomed to an organisation’s workflow. Time to productivity is an HR metric that calculates the time it takes for a candidate to join the organisation and complete their training before they start working at total productivity.

  • Cost per Hire

Cost per hire gives you the average cost of hiring an employee. To calculate this, sum up all internal and external costs for the recruitment process and divide it by the number of employees the organisation hired during that said period. 48% of candidates respond positively to receiving interview information ahead of time.

  • New Hire Turnover

The new hire turnover is the number of new employees who leave the organisation after some time. This HR metric helps you identify the number of employees who quit within the initial engagement with the company. A high new hire turnover indicates a fault in the retention strategy.


Engagement and Retention Related HR Metrics

Once the candidate becomes an employee, keeping them engaged and retaining them is the primary task at hand. Good company practices can help an organisation retain talents and keep the organisation afloat. For that, make use of HR metrics related to engagement and retention.


  • Employee Satisfaction

Employee satisfaction is a metric that identifies employee engagement with the organisation. Employees who are content working for the organisation will likely be advocates and recommend the organisation to their friends, peers, and family.

  • Voluntary Turnover Rate

The HR metrics calculate the employee turnover rate for those who leave the organisation of their own free will. To help you understand more about why employees leave, it is crucial to hold one-to-one meetings and an exit interview.

  • Retention Rate

The retention rate refers to the number of employees who have stayed with the organisation during a given period. To calculate this, divide the number of employees exited during a given period by the total number of employees.


Time Tracking Related HR Metrics

Time tracking metrics offer insight into the employees and the time they put in for the organisation. The HR handles the leaves and the employees’ attendance, and these metrics are helpful in that aspect.


  • Absence Rate

The absence rate, or absenteeism, measures the average number of days the candidate was absent during a given period. It does not include paid time off.

  • Absence Rate per Manager

The absent rate per manager is similar to the absent rate, except it is calculated for individual teams and managers. This helps to identify the absence rate for separate teams.

  • Overtime Hours

This metric calculates overtime hours the employee works in a given duration. Based on the requirements, it can be broken down into individual employees and separate teams and managers to indicate the overtime hours for that specific unit.

Revenue Related HR Metrics

HR metrics related to the revenue are important for the actual business. It focuses on the employee’s efficiency and their revenue for the organisation.

  • Revenue per Employee

This HR metric offers insight into the entire revenue the employees are responsible for. This gives an idea of the efficiency of the organisation. To calculate the revenue per employee, divide the total revenue by the number of employees. 

  • Cost of HR per Employee

This metric offers the measurement of how much money is spent on the HR operations in an organisation. To calculate this, sum up all the costs related to HR operations and divide them by the total number of employees.

  • Billable Hours per Employee

Not all working hours of an employee come under the billable category. To measure the efficiency of the employee, it is important to understand the total hours the employee works on billable tasks. Keeping track of this metric helps the employer gauge an employee’s working hours.


Final Thoughts

HR does a lot of heavy lifting in an organisation. To measure them and produce proper results while fixing the problems with the process is crucial. The HR metrics will offer you insights into areas of improvement and make your management process much smoother.

Also, keep in mind that it is unnecessary to use every metric mentioned above. Start with something small, making sure that it is a metric that is easy to keep track of and scale from that point. Measure only the metrics you feel are required for your organisation since the requirements of each organisation differ based on their niche and your industry. Do not sleep on valuable insight the HR metrics can provide.


Award-winning recruitment software that will find, attract, hire and analyse the way you want to work. At LogicMelon, we have experienced software recruitment marketing specialists to help you build effective recruitment solutions supported by the best customer service you’ll find anywhere!

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