HR Metrics

What are HR metrics?

HR metrics, or Human Resources metrics, are Key Performance Indicators (KPIs) that quantify how well a company is optimizing their human capital. This is analyzed in the context of overall business performance. Tracking HR metrics provides actionable data so you can make better decisions.

Human Resources teams can track metrics for all HR functions including hiring, compensation, training, engagement and retention.

Common HR metrics include:

• Time-to-hire
• Cost-per-hire
• Time-to-productivity
• Employee turnover
• Absenteeism
• Overtime percentage
• Revenue per employee
• Employee productivity rate
• Diversity and inclusion
• Pay equity
• Healthcare costs per employee
• Average performance rating
• Employee engagement

How do you use HR metrics?

Tracking HR metrics is pointless if you don’t leverage them to make decisions. Here is the basic process of using HR metrics:

1. Capture data about your workforce
2. Analyze the data
3. Make changes to improve operations
4. Assess whether the changes were effective
5. Adjust as necessary

Using metrics is especially important when your company has made a change. Perhaps you just opened a new location or started offering a new product. Maybe your city or state just passed a new sick leave or predictive scheduling law. All of these events require adjustments in how you manage employees.

What are the benefits of tracking HR metrics?

• Optimize resource allocation
• Improve oversight
• Minimize compliance risks
• Improve training ROI
• Improve benefits ROI

Using a scientific process to make business decisions is a best practice used by successful companies. HR metrics reveal trends on a granular level. They show you what changes to make in how you manage employees.

What happens if you don’t track HR metrics?

Failing to track and improve HR metrics can cause problems throughout the organization. Here are some potential consequences:

• Customers are ignored when too few employees are scheduled
• Managers waste time correcting timecard errors
• Employees don’t understand and use their benefits
• You don’t know how effective your training programs are
• Employees commit hours theft by punching in early every day
• Teams miss project deadlines

Every business has problems. Not every business takes a scientific approach to solving them. If you want your business to succeed, track HR metrics to continually improve human capital management.

What software products track HR metrics?

Human Resources Management Systems (HRMS), Human Resources Information Systems (HRIS), and Human Capital Management (HCM) are all types of HR software that helps track HR metrics.

See also

• Human Resources
• FTE (Full-Time Equivalent)

Additional resources

• 20 HR Metrics You Need to Track in 2022
• 3 Reasons You Should Track Time-to-Hire (And How To Do It Right)
• Workforce Management: Leverage HR Data for Smarter Decisions