As HR professionals become more metrics-driven, it’s important to be familiar with all the different ways to leverage your people data and measure your team’s impact on the broader organization. Learning new metrics can inspire you to look at your company data in new ways and help you discover powerful insights about your people and organization. From absenteeism to time-to-hire, here’s a glossary of the most popular HR metrics you can use at your company:
Absenteeism is the rate at which employees take unplanned, unexcused absences from work. Increased absenteeism is typically an indicator of unhappy, disengaged employees and could eventually lead to higher turnover. That said, you may see some seasonality with this metric, especially during cold and flu season, so be sure to keep that in mind when drawing insights.
Number of Days Absent ÷ Total Scheduled Work Days
Benefits Enrollment Rate
Your benefits enrollment rate evaluates how many eligible employees are enrolling in your benefits. Low enrollment rates could suggest costs are too high or your options aren’t appealing to your employees. You can also calculate this for specific voluntary benefits to gauge employee interest in your offerings.
Number of Employees Enrolled in Company Benefits ÷ All Eligible Employees
Career Path Ratio
Career path ratio shows you how people are moving in your organization, or how many internal moves are promotions versus lateral transfers. Before calculating, you need to establish what it means to be promoted or transferred at your company. Distinct roles and title hierarchy will make this step easier. The ratio will tell you how much upward movement there has been in your company in a given time frame. If the ratio is too high, your organization may be top-heavy. If it’s too small, you may not be investing enough in your employees.
# of Promotions ÷ (Total Promotions + Total Transfers)
Compa-ratio, or compensation ratio, measures how an individual employee’s salary compares to the midpoint salary range for their position. A compa-ratio around 100 percent means an employee’s salary is in line with the industry average and they should be performing their job as is expected of them. A ratio well below 100 percent indicates an employee is either new, inexperienced, or underpaid, while a ratio well above 100 percent suggests the employee is a top performer who consistently performs above expectations. Many companies use compa-ratios during performance reviews to dictate salary increases.
( Employee Salary ÷ Midpoint Salary Range for that Position ) x 100
Cost per Hire
Cost per hire measures how much money your company spends on recruiting and HR to hire a new employee. It considers a recruiter’s time and salary, job board fees, applicant tracking software costs, staffing agency costs, and more. SHRM estimates companies spend an average of $4,129 to hire a new employee.
Total Recruiting and HR Costs ÷ Number of New Hires
This spooky phenomenon has been frightening recruiters recently. Employee ghosting is when an employee accepts your job offer, but fails to show up on their first day.
Number of Candidates Who Fail to Show Up On Their First Day ÷ Total Number of New Hires
High Performer Retention
All HR professionals want to keep their best employees happy. High performer retention measures top performer turnover for a given period. To measure, start by identifying what it means to be a top performer at your company. Then establish standards for what “good retention” means. As a general rule of thumb, top performer retention should be equal to or higher than overall employee retention.
( (Current Number of Top Performers) ÷ (Number of Top Performers at the Start of the Period) ) * 100
New Hire Failure Rate
Not every new hire will be a perfect fit. New hire failure rate measures the percentage of new employees who leave your company within their first year. Higher rates could be caused by inaccurate job descriptions, poor management, lack of training, culture issues, etc.
New Hires Who Left The Company Within Their First 12 Months ÷ Total New Hires During This Period
Offer Acceptance Rate
Your organization’s offer acceptance rate compares the number of job offers you extend to the number of offers your candidates accept. It can be a helpful way to evaluate how competitive your compensation and benefits are and how they compare to your competitors.
Number of Job Offers Accepted ÷ Number of Job Offers Extended
Your company’s overtime rate measures how often your employees work over 40 hours a week. It can be used to indicate scheduling inefficiencies, identify increases in payroll costs, and justify the need for increased headcount.
Quality of hire takes a look at a new hire’s adjustment, acclimation, and performance since joining your company. To start, you’ll need to establish success criteria—this could be how well a new hire fits with your culture, performs, or exhibits the required competencies, for example. Once you choose your criteria, use a rating scale of 1-5 to rate each individual for each criterion. The average will give you their quality of hire measurement and help you see how they stack up to the rest of your recent hires.
Revenue per employee helps you estimate how much money each employee generates for your business. A higher revenue per employees indicates increased employee productivity and optimal use of company resources
Revenue During a Specific Period ÷ Average Number of Employees During That Period
Time to Fill
Time to fill measures the period of time between when you open a new position and a candidate’s first day on the job. It measures the duration of your hiring process and helps you see if the length of your hiring process could be hurting your hiring efforts. SHRM estimates it takes companies an average of 42 days to fill an open position.
Number of Days Between Posting a New Open Position and a Candidate's First Day
Time to Hire
Time to hire is very similar to time to fill. It measures the number of days between opening a new position and when a candidate accepts your offer, not the employee’s first day.
Number of Days Between Posting a New Open Position and a Candidate Accepting/Signing an Offer
Turnover measures the rate at which employees voluntarily or involuntarily leave your company. Namely benchmarking data estimates that the average organizational turnover rate is 22 percent, while voluntary and involuntary turnover are 13 percent and 6 percent, respectively. Measuring turnover rate by department, team, ethnicity, etc. can help you isolate areas of concern in your organization and better understand why your employees are leaving.
( Number of Employee Departures ÷ Average Total Employee Headcount ) * 100