15 HR Metrics That Matter and Their Impact on Your Organization

HR Management
Rea Regan October 28, 2021 10 min read

Finding the right human resources metrics is the key to unlocking how to increase business success and employee productivity. We explore 15 HR metrics that matter and the impact they have on your organization.

HR welcoming new hire while thinking about HR metrics

Quick Guide

    The value that human resource departments have on companies continues to increase year after year. HR departments are able to influence almost every part of the company, which means they play a great role in the direction and success of the company. 

    While it’s hard to simplify the work that human resource does, in the end, it all boils down to metrics. 

    Finding the HR metrics that matter is the key to having a positive influence on the way a company runs. With that being said, let’s explore 15 HR metrics that matter and the impact each of them can have on your organization.

    15 Key HR Metrics To Watch Out For

    Turnover Rate

    Employee turnover is one of the biggest ways that companies waste money. 

    When you spend money to recruit and onboard new employees, you typically want them to stay for the long haul so you can get the most bang for your buck, which is why employee turnover is one of the most important human resource metrics. If your turnover rate is increasing, it’s a sign that something is wrong.

    HR managers can’t wait for the next exit interview to start looking for the things that are driving people to leave the company. Not only does it waste money to have high turnover, but it can also harm company morale, which is another area where HR has major influence.

    Turnover in First Year

    To be more specific, employee turnover within one year of being hired is a more advanced HR metric that should be examined closely. 

    Ordinary turnover can tip the scales on the budget, but first-year turnover is detrimental to your return on investment. 

    At the end of the day, recruiting and onboarding are investments. If that investment is leaving within one year, it could signal that there is a flaw in the hiring process that needs to be fixed.

    It could also point to an issue with the onboarding process and making new employees feel comfortable while they are transitioning to a new job. Be sure to reference your employee handbook for ways to improve the onboarding process.

    Voluntary Turnover Rate

    While turnover rate is unmistakably one of the most important HR metrics, it’s crucial not to overlook the voluntary turnover rate. For example, if an employee turns out to be a bad fit and the company decides to terminate employment, it may not necessarily be a bad thing.

    You must take the time to differentiate between employees who leave voluntarily due to company flaws and those who leave because they weren’t a good fit for the company, as this can help give you a more accurate impression of whether or not your turnover rate is acceptable.

    Time to Fill Empty Position

    Among the HR metrics related to employee turnover and onboarding, this is perhaps one of the most overlooked.

    The average time to fill a position is 36 days. 

    Naturally, the sooner a job is filled, the less money you’ll spend on searching for an employee and the more time you’ll save where other employees can focus on their jobs and focus less on picking up the slack. After all, HR managers spend a lot of time looking at resumes, while other managers might take time from their busy schedules to conduct interviews. Productivity decreases the more time it takes to fill the vacancy. 

    On the other hand, if you rush the process, there’s a good chance you’ll end up with the wrong candidate and have to start the process all over again. If your HR department can fill positions with the right canidates in just under 36 days, you can consider yourself slightly above average in this metric. Look for key qualities in each candidate and ask behavioral questions during the interview to better gauge the candidate.

    Cost to Fill Vacancy

    Of course, all of the various HR metrics related to turnover and hiring all relate to the most important metric, which iOf course, out of all of the various HR metrics related to turnover and hiring the most important one is the cost of filling a vacancy. This calculates the fees spent on job postings and recruitment, among other costs associated with the interview process.

    Vacancy sign as a part of following HR metrics

    The biggest reason to track this as a human resource metric is so you can set a budget for future job openings and estimate the cost of filling available positions.

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    Internal Promotion Rate

    Companies can save a considerable amount of time and money on recruitment and onboarding if they’re able to promote people from within. This also helps with retention and company morale. 

    By tracking the number of jobs filled by internal promotion, you can also get a sense of how effective your company is in hiring the right people in the first place.

    Ideally, you want to be hiring people who have the skills and ambition to climb up the ladder and take more responsibilities within the company. In the long run, internal promotions will save a lot of money and increase the continuity within the company.

    Don’t forget to send an internal promotion announcement.

    Staff Diversity and Inclusion

    In most industries, it’s helpful to have a diverse workforce that’s made up of people from different backgrounds who can bring multiple perspectives to the table. Company leaders are beginning to understand that workplace culture is a critical part of success.

    This directly relates to a workplace embracing diversity and inclusion. Without diversity, company culture can suffer, which can impede success. This is why staff diversity is becoming one of the newer HR metrics that matter.

    Equal Pay

    If your company isn’t already tracking pay gaps based on gender and race, or if you’re now required by law, it’stime to start. Even if the law doesn’t require it, paying employees the same wage for doing the same job is the right thing to do, which is why it’s important to monitor HR metrics that create transparency on this issue.

    Be aware of what minimum wage is in your state, along with meal and break requirements.

    Employee Productivity

    Everything boils down to how productive employees are. With more employees working remotely, only coming into the office part-time, or following the traditional 9-to-5 format, there needs to be new human resource metrics for measuring employee productivity. (In fact, you may offer a flexible schedule or even a 4/10 system.) 

    You can’t just look at who shows up on time and who’s staying late – not that this was an effective metric in the first place.

    HR managers need to look for new ways to track what employees are accomplishing. It’s become important to set up a productivity index that can measure what employees are successfully completing.

    Overtime Costs

    Since non-exempt employees make 1.5 times their normal wage when working overtime, the cost of paying employees overtime is a HR metric that should be monitored closely.

    Paying for too much overtime can quickly put a strain on the company’s budget. 

    It’s important to make sure that the work being performed by employees working overtime is worth the extra money. You can then determine whether or not it’s more cost-efficient to hire more employees rather than paying current employees overtime.

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    Employee Absence Rate

    Few things can kill productivity as quickly as high absenteeism. HR departments will have records of how many sick days employees are taking, but this is a metric that should be tracked closely and monitored for a sudden spike.

    mployee working while HR works on sharpening HR metrics

    If the absentee rate is higher than normal or higher than expected, it can point to fundamental problems within the company. This can include employees getting sick at work, employees who are stressed out or working too hard, or simply poor morale among the staff.

    It’s also important for HR managers to differentiate between scheduled and unscheduled absences when trying to get an accurate measurement of the company’s employee absence rate.

    Turnover and Absences Per Manager/Department

    Among the more specific HR metrics that matter are the rates of turnover or absenteeism within a certain department or a particular manager or supervisor. 

    A spike in turnover or absenteeism may not necessarily be a company-wide problem. Certain teams or departments might have higher rates because there is a problem with leadership or employee engagement. 

    The more specific HR departments can get with issues like turnover, the easier it’ll be to spot potential problems that can be corrected.

    Healthcare Costs

    It’s a given that healthcare costs will increase year after year. However, human resources metrics should measure whether the company is getting the most out of the money being spent on healthcare. 

    • Are the benefits offered being used by employees? 
    • Is your current insurance carrier offering a plan that works for your employees? 

    Check-in with your employees because a better plan or a different set of benefits might be more advantageous.

    Training Cost and Effectiveness

    Along with recruitment and onboarding, training can be costly. This metric also relates to employee performance and productivity. If employees are being trained to do certain things but are still struggling to accomplish them, the training system might be flawed. 

    It’s not always a matter of spending more money on training; sometimes, you have to find ways to be more effective with your training methods.

    Employee happiness is extremely important as well.

    Happy employees will be more productive, have lower rates of absenteeism, and be less likely to leave the company, creating a lower turnover rate. Be sure to focus on your employee retention strategies here.

    Something as simple as encouraging employee feedback or employee satisfaction surveys can tell you a lot about how happy your employees are and give you a good indication of how the company can make improvements.

    Don’t Skimp On HR Technology

    At this stage, it’s crystal clear (if it wasn’t already) that human resource metrics are vital to your company’s success. And it may seem like an exhausting list of human resource metrics to keep your eyes on. However, if you’re investing in HR technology, this becomes much easier.

    The leading HR management app professionals like yourself turn to is Connecteam. This all-in-one app offers you all of the tools that you need to boost productivity, increase employee engagement, and track HR metrics with real-time data. In fact, research shows that when employees feel involved, have things communicated to them, and know that they are heard, turnover drops dramatically.

    The most beneficial features to maintain human resources metrics include:

    Employee Timeline

    With an employee timeline, you can increase morale and engagement, plus keep everyone on the same page, by sharing business milestones, new hires, celebrate anniversaries, even start an employee of the month program.

    The employee timeline allows you to track your employees history within your company so you can see if an employee should be given a pay raise or promotion.

    Onboarding & Training

    Create a digital, custom media library with courses for better employee training. Include videos, PDFs, links, and any other type of media file to make the learning process easier for your employees.

    Quizzes

    Create online quizzes to ensure new hires and seasoned employees alike are retaining the information you present to them through refresher courses or onboarding. Get the quiz results in real time to see what employees are misunderstanding and where the courses need to be made more clear.

    Documents

    All documents HR needs to process such as new recruit forms, payroll information, contact infor etc. can all be filled out and uploaded digitally making storing and finding relevant employee documents a breeze. 

    Recognition & Rewards

    Boost employee morale by providing employees with public recognition and rewards for their work accomplishments. Celebrate promotions, work anniversaries, completion of projects and any other work related achievements. You can send badges or tokens to your employees that they can use to purchase gifts for themselves from major retailers.

    Connecteam has the full package of features so that you can focus on HR metrics that matter! Especially when you set up good onboarding that creates a better smoother entrance for new employees!

    Wrapping Up Our Thoughts On HR Metrics That Matter

    By ensuring high morale, whether through solid HR processes or employee incentives, it’s important to track human resources metrics. 

    Technology is a great way to consolidate information so that you can avoid high turnover rates, termination, and low engagement rates.

    Connecteam: Best All-In-One HR Solution

    Enhance HR metrics with actionable data and streamline employee management with a robust set of features.

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