Tracking key metrics helps your HR department improve the candidate experience and business operations. People data provides insights into organizational health and growth opportunities.

Collecting employee data points such as gender, age, role, salary, tenure, and performance ratings, combined with other data points such as time and departmental data, helps analyze business health. The findings help uncover pain points to resolve for increased operational efficiency.

Importance of HR Metrics

HR metrics are data points that track key human resource and recruitment activities. The data help HR departments and people managers monitor program functions and make necessary adjustments.

Examples of HR metrics include:

• Compensation
• Engagement
• Employee performance
• Retention
• Time to hire
• Cost per hire

Analyzing people and workforce data creates an environment where employees feel valued. Tracking HR metrics connects people data with business outcomes to make data-based decisions aligned with company goals.

The following are eight key metrics every HR department should track.

1. Talent Acquisition

Track how candidates move through the hiring process. Use the findings to make informed hiring decisions and reduce recruitment, onboarding, and training costs.

Emphasize these talent acquisition metrics:

• Applications per role
• Diversity hires
• Quality of hire
• Revenue per employee
• Turnover in key roles
• New hire failure rate
• Revenue lost due to vacancies

2. Headcount

Headcount is the total number of people, including contract and contract-to-hire workers, working for the company at a given time. An accurate headcount is essential because most of the company’s budget goes toward people costs and accomplishing business goals. Forecasting how headcount might change strengthens cost estimation and financial management.

3. Compensation

Salaries, bonuses, paid time off, health insurance, and retirement plans are part of compensation. Tracking this metric ensures the pay scale aligns with market demand.

Monitor these compensation metrics:

• Salary
• Comparative ratio
• Range minimum, midpoint, and maximum
• Range penetration
• Grade or band

4. Employee Engagement

How well an employee relates to their colleagues, coworkers, and managers impacts their work quality. High engagement strengthens productivity and reduces burnout and turnover.

Track these employee metrics:

• Performance
• Absenteeism
• Net promoter scores in feedback surveys
• Voluntary turnover
• Employer reviews

5. Learning and Development

Track employee professional development and career advancement. Offering learning and development opportunities elevates employee engagement, performance, and retention.

Prioritize these learning metrics:

• Baseline of workforce skills
• Future skills required
• Trajectory of learning paths
• Internal hires and promotions

6. Turnover

The turnover rate includes voluntary and involuntary departures. Analyzing this metric helps understand the trends and reasons behind reasons for leaving.

Focus on these turnover metrics:

• Predicted resignation: An approximate number of employees who will leave
• Resignation trends: Patterns estimating whether more or fewer employees will quit soon as compared to the past quarter
• Resignation drivers: Why employees leave
• Estimated replacement costs: Costs to replace employee departures

7. Total Cost of Workforce

The total cost of workforce includes headcount, salaries, benefits, and financial and market data. Knowing this cost helps develop an efficient workforce plan.

Pay attention to these total cost of workforce metrics:

• People: Recruitment, pay, onboarding, training, retirement
• Overhead: Costs incurred per employee
• Facilities: Office space, equipment, utilities

8. Workforce Planning

Knowing the headcount and skills required at a given time supports workforce planning. These metrics help identify gaps between the current workforce and future needs to attain business goals.

Focus on these workforce planning metrics:

• New hire time to proficiency
• Skills coverage
• Tenure, seniority, and experience levels
• Absenteeism
• Turnover rates 

Does Your HR Department Need Help Tracking Key Metrics?

Tracking key metrics such as talent acquisition, headcount, and compensation helps your HR department improve the candidate experience and business operations. These evaluations help uncover pain points to resolve for greater operational efficiency.

Arlington Resources can help your HR department track key metrics for increased business success. Reach out to learn more today.