Top HR Metrics Every Organization Should Track

Top HR Metrics Every Organization Should Track

HR metrics form a pivotal part of an organization’s toolkit. Key data points known as HR Metrics are used by organizations to track their human capital and gauge the success of their HR efforts. Organizations may monitor their HR success by measuring this data, which includes what’s functioning well, what needs improvement, and what trends to look out for in the future. HR metrics just don’t just measure the present but enables the future prediction for an employee, the employers, the organization. HR metrics are the test reports to the “body” of an organization, determining the current institutional (say, human body) status and inferring the “To Dos” and “Can’t be dones” for better organizational (say, human body) performance.

Cost per Hire: how much it costs the company to hire new employees?

Cost per hire is a simple metric that accounts for all the costs incurred during the hiring process. Using the following simple method, you may determine the company’s cost per hire:

Sum of external recruiting costs and internal training costs divided by the total number of hires in a time period.

Cost per hire = (Internal recruiting costs + External recruiting costs) / Total number of hires

Utility: Can be used to evaluate the efficiency of recruitment strategy and find room for any substantial improvements to savings in recruitment costs. Determines what your recruitment function can do to increase savings or cut down costs.

Time consumed in filling:

Calculation: Date of declaration of hiring to the Date of sending an offer to the desired candidate.

Number of days after the approval of requisition and the date on which the talent is finally selected to work for the organization.

Utility: Test the efficiency of the recruiting team, as, a slow hire signifies a not so driven organization.

Having a long time to hire, reflects on candidate experience. Candidates may drop out of the recruitment process if it is long. Hence, this inefficiency can be tackled if this HR metric is effectively analysed.

Retention measure/ Early Turnover Rate:

Calculation: (Number of terminates during the defined period)/ ( Number of employees at the beginning of the period)

We often think that Recruitment issue is the bigger one in an organization while RETENTION is the major one, as the former largely relies on the latter.

This HR metric does not just determine the hiring success of the company but its credibility to keep them committed. Analyzing the percentage of recruits leaving in the first year helps in predictive analysis of the company’s future retention power, and gaining a deep insight into the “why’s and “how’s to launch or incorporate strategies to build a sense of employee devotion and organizational integrity.

A key metric. It displays the percentage of total employees divided by the number of employees who remained with the company throughout time. It is seen as a crucial sign of the culture of an organization. 

If the terminates are high in number, efficient exit interviews can be implemented to strike the root cause and prevent a similar future picture.In absence of a data oriented Metric, critical analysis on turnover issue might be too cumbersome.

Scope of Promotion:

Calculation: [(Number of candidates actually promoted)/(Number of eligible candidates)]*100,


Eligibility criteria for promotion varies from org. to org.

This HR metric is equally significant as the talent pool is always willing and ready to upgrade rather than staying stagnant in a comfort zone. This metric is used to calculate the average number of internal promotions successfully executed.

If the analysis shows a low score for promotional opportunities, the company can start an in-depth research of how can the employees be given the ladder to climb up, as often we might lose the competent ones when their potential isn’t utilized fully through recognition, as in promotion.

Absence rate:

(No of absence days/Total no of working days)

Employees take more time off when they are dealing with family, job, or health concerns. As a result, absenteeism is an excellent HR statistic for monitoring employee health and wellness. The average absence rate across all industries is 2.5%.

Determine if the organization suffers from an absenteeism problem, which is one of the foretellers of turnover.

Since it’s a strong indicator of dissatisfaction, chalking out the absence rate helps to implement necessary motivators at workplace in this HR Metrics.

Training ROI:

Calculation : (Total benefits-Total training costs)*100

In this HR Metrics, the net financial benefit realized by the organization from a particular training programme or development workshop. It involves the total benefit minus the total direct and indirect cost incurred to develop, produce, deliver the training assistance.

Training ROI is crucial to assess the contribution of the training programmes, if they are at par with the organizational goals and employee goals.

An Unusual ROI signifies either under-training or ‘not required assistance’ leading to wastage of time, capital and other resources. It can help us immediately arrange for a plan of action according to the suitability of both parties.

Performance XPotential Score:

Mapping an employee’s potential as well as performance on 3 levels, to infer the kind of performer or the kind of contributor he is, helps to have a clearer picture of what and who my organization exactly constitutes and it’s future scope with such candidates.

It aids in decision making regarding employee retention, or deciding wanted or unwanted turnover.

It fosters accuracy in  talent management and succession planning.


Plotting 2 parameters, namely performance and potential, along the two axes and graphically calculating  a suitable organizational approach for each employee based on his performance/potential level.

Revenue per Employee:

Calculation: (Total revenue earned/ total no of employees)*100

The prime HR metrics to assess organizational profit, contributed by the hired talent pool. It is the most crucial of all to determine how much our investments are getting paid off, enabling us to enhance our manpower planning based on the evaluated results, thereby avoiding any wastage.

Acts as a benchmark to assess employee’s score as capital rather than an expense.

Offer rate, Offer Decline rate:

Offer rate: Percentage of applicants interviewed receiving offer letters.

(No of candidates offered/total no of candidates interviewed)*100

Offer Decline rate: Percentage offers extended that are declined.

(No of offers declined/No of offers extended)*100

This HR metrics helps to determine the frequency with which the org is not hiring the top candidate or starting a search over. Identifying if the compensation package is not comparable with the market. The results push the organization to dig into the grave of specific reasons for the decline and not just “accepted other offer”.

Competency Rate:

The degree to which employees in key positions have the ability to achieve performance objectives with their skills.

Calculation: (No of incumbents with sound competency level/ No of candidates assigned with respective work)*100

This metric helps us to analyse the current talent management and innovate new strategies to upgrade the skillsets if necessary, or decide the “hire or fire”.

With a lower competency rate,the organization might be able to sustain, but would not be a market winner at all.

Average Performance Rating:

The mean of performance scores of a group of employees assigned with performance assessments.

= (Sum of performance ratings/no of employees who received a performance rating)* 100

This HR metrics is needed to determine the top ,average, under performers and analyze the tasks and approaches with respect to their ratings. This HR metrics does give us a thorough idea of an employee’s performance status on various indices, from his area of improvement to his area of expertise. Having the data, decision making becomes easier regarding grooming/developing/sacking.

Employee engagement:

Calculation: Surveys, Pie charts, Bar graph

Measures how well connected the employees are to the management and the organization, how well they are behavioral involved with the company and their performance management, and how well they feel familiar with the workplace factors.

This HR metrics helps to plan employee motivation framework by considering psychological and behavioral parameters and not just monetary motivators, thereby keeping the work environment lively, engaging, easygoing leading to organizational effectiveness.

Applicants per opening:

Calculation: ( No of applications received/ Number of job openings.)*100

This measures the efficacy of the Job posting of an organization, the image of a company, the luring power of the company to get talents voluntarily willing to apply.

This HR metrics plays a vital role in understanding the flaws or improper ways or the ineffective approaches during job postings if any, and modify the existing not so satisfactory measures.


In addition to the information explained above, this blog contains other HR metrics. They are essential if you want to make data-driven decisions that are supported by evidence. Everything you do is for the good of your staff and the business. The appropriate criteria are based on things like workforce size, money, time, and resources, among other things. Whatever you have, manually gathering data isn’t a really enjoyable activity. Get a central HR metrics dashboard, then concentrate only on making strategic choices.

Data is king right now. HR metrics give you important information about the strengths, weaknesses, and strategic priorities of your company. Before choosing which HR metrics to implement for your company, consider the following:

What am I measuring here?

What result do I seek?

Which number do I desire?


Additionally, remember the following techniques when creating your metrics:

-By analyzing business needs, determine which HR responsibilities are directly aligned with corporate strategy.

-Determine measurement zones. This is accomplished through coordinating HR goals and initiatives with business objectives.  You can determine three to five KPIs from this.

-Calculate, translate, and obtain the raw data. If you can divide the data into other categories (such demographics, organisational structure, functions, employment levels, etc.), you’ll gain more understanding.

-Examine, assess, and report on the metric after data analysis.

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