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 has on your organization.

HR welcoming new hire while thinking about HR metrics

Quick Guide

    The value that human resources departments have on companies continues to increase year after year. HR departments are able to influence almost every other 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 resources does, in the end, it all boils down to metrics. 

    Finding the right human resources metrics, specifically the HR metrics that matter, can be the key to unlocking all of the ways that HR stakeholders can put their stamp on an organization and have a positive influence on things. 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 For

    Turnover Rate

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

    When you spend the 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 significant human resources metrics. If your turnover rate is increasing compared to what it was in the past, it’s a sign that something is wrong. HR managers shouldn’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 keep seeing employees leave, but it can also harm company morale, which is another area where human resources have a huge 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 even worse on your return on investment. 

    At the end of the day, recruiting and onboarding are very much 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 HR metrics that matter, it’s important 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 and those who don’t, as this can help give you a more accurate impression of whether or not your turnover rate is an acceptable one.

    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 job listings and other resources it takes to find the right person. After all, HR managers will spend a lot of time looking at resumes, while other managers might take time from their busy schedules to conduct interviews. Therefore, productivity goes down the more time it takes to fill the vacancy. 

    On the other hand, if you rush the process, there’s a better chance that you’ll end up with the wrong candidate and have to start the process again from scratch. But if your HR department can fill positions 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 is the cost of filling a vacancy. This calculates the fees spent on job posting 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 new positions that become available.

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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 when new jobs become available. This can also help with retention and employee morale within the company. 

    By tracking the number of jobs filled by internal promotion, you can also get a sense of how effective your company is in hiring people in the first place. Ideally, you want to be hiring people who have the skills and ambition to move up the ladder and take higher positions within the company at some point. 

    The higher your internal promotion rate, the more effective you are at doing just that. In the long run, that 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 different perspectives to the table. 

    Most company leaders and employees are coming around to the idea that workplace culture is a critical part of success. This directly relates to a workplace embracing diversity and inclusion. Without them, company culture can suffer, which has a negative impact on 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 you’re required by the laws in certain states to fix that problem, now is the time to start tracking it. Even if the law doesn’t require it, paying employees the same wage for doing the same job is the right thing to do, making it important to monitor HR metrics that can allow your company to be transparent on this issue.

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

    Employee Productivity

    Needless to say, everything boils down to whether or not employees are being productive. But with more employees working remotely, only coming into the office part of the time, or now following the traditional 9-to-5 format, there need to be new human resources 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. 

    HR managers need to look for new ways to track what employees are getting accomplished based on their specific job and the functions they’re asked to perform. It’s become important to set up a productivity index that can measure what employees are getting the most done.

    Overtime Costs

    Since non-exempt employees make 1.5 times their normal wage when working overtime, the cost of paying employees overtime is one of the HR metrics that should be monitored most 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 making overtime requests is worth the extra money being spent on it. Plus, if you have an accurate measurement of overtime costs, you can determine whether or not it might be more cost-efficient to hire more employees rather than paying current employees to work 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 you offer being used by employees? 
    • Is your current insurance carrier offering a plan that works for your employees? 

    The answers to these questions should be measured 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 a costly endeavor for some companies. This metric will also relate 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.

    At the end of the day, employee happiness is one of the few HR metrics that matter. Who doesn’t want their employees to be happy and satisfied with their employer? Plus, happy employees can be a strong indicator of other HR metrics. 

    Doesn’t it make sense that 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 what to expect from other HR metrics that matter.

    Don’t Skimp On HR Technology

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

    The leading HR management app professionals like yourself turn to is Connecteam. Connecteam 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:

    Social Feed & Updates

    Increase morale and engagement, plus keep everyone on the same page, by sharing KPIs, business milestones, new hires, celebrate anniversaries, even start an employee of the month program.

    1:1 or Group Chat

    Whether it’s a personal message from senior management or HR itself or a company-wide announcement, chat is a great way to stay connected and introduce an open-door policy.

    Surveys, Suggestion Box & Live Polls

    Gain feedback and insights straight from your employees at any time. Compile the data to make smarter HR, business decisions.

    Onboarding & Training

    Create a digital, custom media library with courses and quizzes to train employees and new hires. Include videos, PDFs, links, etc. 

    Ensure Compliance

    Refer to “read and sign” forms or house all key materials in the library, for example the employee handbook, attendance policy, travel requests, COVID forms, etc.

    Digital Workflows

    Automate checklists, forms and reports by moving digital like emergency contact information, bank details for payroll, etc. All of which can be completed from mobile or desktop. 

    GPS Time Tracking

    Ensure accurate timesheets for easier payroll processing with GPS timestamps at each clock in and out entered.

    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!

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    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. As we have already explained through this blog! 

    Remember that 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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