HR pros spend countless hours developing strategies to improve employee recruitment, retention and performance. The right HR software can make these processes more efficient but more importantly, provide HR data to measure their success. Using HR metrics provides employers the ability to see what areas they’re excelling in and what needs improving, ultimately increasing their bottom line.

What are HR Metrics?

Human resources metrics or HR metrics are key pieces of data that allow companies to measure the performance of their HR efforts. Areas that can be measured include recruitment, engagement and retention, time tracking, employee value and performance, training and development, HR services and software and more. According to SHRM, key HR metrics allow companies to qualify the health of the organization. These metrics measure how HR is doing as a whole and how it is leveraging its employees to maximize the performance of the company.

How do these Metrics Provide Insights into Your Organization?

Metrics use data to assess the efficiency and effectiveness of your HR processes. While they provide data, there is a difference between metrics and HR analytics, according to SHRM. Analytics takes the measurements HR metrics then provide to help predict future outcomes. Some HR metrics examples show retention rates for your employees. Analytics use that data to determine why employees leave. Once you have that information, strategies, like increased compensation or training, can be put into place to reduce your turnover. Simply put, metrics tell you what’s going on and analytics tell you what to do about it.


Are Companies Measuring HR Metrics?

More companies are using HR metrics to measure their performance. Case studies have been done over the last decade to illustrate how using HR metrics have improved a company’s bottom line. For example, one study showed employee engagement was directly tied to store income. Best Buy saw a sales increase of $100,000 per store with every 0.1% increase in employee engagement. Another example is how IBM measured employee recruitment, tenure, promotion history, performance, salary and other factors to reduce turnover by 25%. A mining company located abroad used metrics to determine under and overstaffed departments. The company measured employees per department against each department’s productivity and plotted the results. It was plain to see which department’s staff size aligned with productivity and which didn’t. Companies are seeing the value of tracking HR data as a way to increase sales or cut costs.

Essential HR Metrics to Track Closely

The million-dollar question is which HR metrics should you be tracking? The amount of available data is massive but here some key HR metrics you should be paying attention to.

Recruitment Metrics

Recruiting and ATS software collects metrics to help you figure out your most effective recruiting channels, application completion rate, candidate per hire rate and how long it takes to fill a position.

  • Time to Hire: Time to hire measures the time from the beginning to the end of the recruiting process. The end can be the date an offer is made, the date an offer is accepted or the date a new employee shows up at their new office for their first day. This measure helps you determine how much time your company is spending recruiting, which can raise the cost per hire.
  • Cost per Hire: Cost per hire takes the total costs spent on recruiting, like recruiter fees, and advertising, and divides it by the number of hires made from those efforts. Cost per hire metrics allows you to estimate the average amount spent to hire a new employee. This data is valuable when developing hiring budgets and plans.
  • Quality of Hire: Quality of hire looks at job performance, engagement and culture fit, and assigns a score from 1 to 100, then divides the sum by the number of factors. Consistently high-quality hire scores indicate your recruiting process is hitting the mark; low-quality hire scores mean something needs to be adjusted.
  • Sourcing Channel Quality: This metric looks at how far candidates went through the recruitment process based on the channel used, i.e., LinkedIn, referrals, a specific job board and so on. It can tell you which channels are working best and which need to be retired.
  • Application Completion Rate: Application completion rate determines the time it takes a candidate to start the application, to when they submit it. A complicated application process could lead to more applicants falling off before completion. Using a mobile-friendly application gives candidates the ability to find your career page or submit an application without a home computer, allowing you to reach more candidates..
  • Candidates Per Hire: Candidates per hire assesses how many candidates are interviewed before the company makes a hire. Too many candidates and your HR department could be taxed, too few and you may not find the right person for the job. Most companies have a goal of interviewing three to four candidates.
  • Employee Referrals: Tracking the number of employee referrals that lead to hires can give companies a large amount of information. For example, if you’re receiving a great deal of hires through referrals, it could indicate your employees are happy. If not, the data could point to unengaged employees who are reluctant to recommend your company to family or friends.

Engagement & Retention

Companies that focus on improving job satisfaction see higher employee engagement, better retention and a reputation as an employer of choice.

  • Calculate Retention Rates: Use this formula to calculate your retention rate: (# of individual employees who remained employed for the entire measurement period / # of employees at the start of measurement period) x 100.
  • Calculate Voluntary Turnover: To better gauge employee satisfaction, calculate the number of employees who leave voluntarily versus those left involuntarily. Use this formula: = 1 – (Total Number of Employees at the Level/Total Number of Voluntary Terminations) × Days in Year ÷ Average of 30 days per month (360) × (Start Date – as a numeric, Current Date – as a numeric)
  • Calculate Turnover Costs: With hiring costs averaging $4,000 per employee, high turnover is expensive for any company. Use this formula to determine how much turnover costs your business: (Recruiting Costs + Onboarding Costs + Training Costs + Unfilled Time) x (Number of Employees) x (Annual Turnover Percentage) = Annual Cost of Turnover
  • Employee Satisfaction Survey: Conducting workforce surveys can measure levels of employee engagement within your organization, according to SHRM. The results of such surveys can identify which engagement initiatives are achieving the desired goals.

Time Tracking

Time tracking software gives employers a wealth of information about when and where their employees are working. Report features can show employers hours worked per employee and location but also:

  • Regular Hours
  • Overtime Hours
  • Start and Stop Time
  • Absence Rate

These reports give employers actionable insights. Managers can quickly regulate overtime or address employees who aren’t showing up to work or taking off early.

Employee Value & Performance

Performance management shows your employees you value them and are invested in their future with your company.

  • Goal Tracking: Use HR software, like performance management software, to track goal progress over time or per project. You can quickly review which employees are meeting goals and which aren’t, letting you know if goals need to be adjusted or realigned to SMART goals.
  • 360-Degree Feedback: 360-degree feedback uses performance management software to gather feedback on employee performance from managers, subordinates, peers, customers and suppliers through multi-choice and opened ended questions. This data provides insight on communication skills, conflict resolution skills and how employees work with others.
  • Work Quantity: This HR metric tracks the physical amount of work produced per employee whether that is through the number of leads, sales or units produced.
  • Revenue Per Employee: Many companies tie compensation, like profit-sharing rewards, to the company’s annual profit goals. Revenue per employee is the total amount of revenue a company earns divided by the number of employees.

Training & Development

A robust learning and development program can boost employee productivity and satisfaction that helps your company thrive. Learning management software can provide key HR metrics that show your training effectiveness.

  • Training Costs Per Employee: Tracking training costs per employee helps ensure you’re not blindly investing and allows you to realign as needed, according to HR Technologist.
  • Rise or Dip In Operational Efficiency: Dips or rises in productivity, especially for production-orientated business can point to how effective your workers are in developing new skills. This metric ties into your performance management system.
  • Progress for The Company and Employee: Tracking how much progress an employee achieves with learning development alerts companies about their future potential. Succession planning helps companies identify those with leadership skills or can fill future skills gaps.

HR Service & Software

HR’s job is to manage human capital, the employees you’ve invested in to make your company successful. Metrics are also useful to determine how well your department is working.

  • Cost of HR Per Employee: Look at the budget for HR and divide it by the number of employees to see how much HR is spending per employee. The metric shows the cost efficiency of HR in dollars.
  • Ratio of HR Professionals to Employees: For example, one person per 50 employees or two per 150 (1:50 or 2:150). With HR software, your company should be able to do more with less.
  • Effectiveness of HR Software: According to HR Analytics, this metric uses your learning management software to measure the number of active users, average time on the platform, session length, total time on the platform per user per month, screen flow and software retention. It allows you to see how effective your software is and detects needed change.

How to Use HR Metrics to Improve Your Business

Calculating metrics and analyzing what they mean can turn your HR department into a strategic resource for your company.

  • Better Decision Making. SHRM notes that using metrics leads to decisions that are better-informed because they’re backed by facts. Approaching your executive team with figures and numbers enables you to convince them to upgrade your software and give their approval to other HR-related purchase decisions. More importantly, HR can show how its dollars impact ROI.
  • Solving a Problem. Data alone may not be able to help you solve an issue at your company but it can identify the solution. For example, if production is low, metrics can help you determine if more training is needed or if your turnover rate is high. Metrics allow you to get past the “what” and instead fully understand the “why,” according to SHRM.
  • Asking The Right Questions. Gathering HR metrics puts companies in the habit of asking better questions and poised to challenge the answers, according to SHRM. Whenever looking at a challenge, the association advises to follow this guide:
    • Understand the business strategy.
    • Tie the business strategy to the HR strategy.
    • Ask the critical human capital questions.
    • Determine the measurements that will help you address the issues at hand.

7 more HR Metrics to Consider


Your HR software is only as good as the data it gives you. BirdDogHR’s Talent Management System gives companies a wealth of knowledge about their recruiting process, onboarding, benefits management, compensation management, performance management, learning management and succession planning. All of our products work together to give companies the most effective talent management solutions. Schedule a demo to see how they can work for your company.