Essential Human Resource Management Metrics you need to pay attention

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Human resources (HR) indicators are a way to measure the contribution of human resources activities to your company's performance. They allow you to calculate the costs and benefits of the human aspects of your business, such as the number of people at different stages of the hiring process, compliance with labour law, employee retention, performance management, employee satisfaction or completion of training programs.

What are HR metrics?

HR metrics are data that can help you assess whether your employees' activities are producing the desired results. They also help you monitor the productivity and performance of your HR team. We have listed a total of 39 HR metrics and grouped them into different aspects of your HR process, such as employee productivity, recruitment and compliance.

The most common HR metrics for small businesses

Below are examples of HR metrics that companies use to evaluate the performance of their HR team and activities - with a focus on people. We've identified these seven metrics as the most common ones you'll want to measure regularly, especially if your HR department is outsourced.

Talent Acquisition

1. The start time (average time needed to fill a vacancy)

The start-up period is calculated by dividing the total number of days the positions are open by the number of positions occupied.

This key figure can provide insight into the effectiveness of your job branding, marketing efforts and application process. High" numbers can also give perspective to your application process. The application process may be too long, there may be too many interviews or you may have a bad experience with a candidate.

2. Productivity time (average number of days for satisfactory productivity)

Productivity time is calculated by dividing the number of days between the start date of the new employee and the time when he or she reaches a satisfactory level of productivity by the number of positions occupied.

This key figure is an important indicator of how well your entry-level program is working. The results can also be an indication of the quality of your recruitment process and the caliber of candidates you attract.

3. Turnover rate (the rate at which employees leave the company)

Staff turnover is used to determine whether or not your employees are satisfied. A turnover rate of 20% is an average in most industries, and a good target would be 10% or less. To calculate employee turnover, first determine how many employees you have, then divide that number by the number of employees who have quit or been laid off.

Employee turnover rate = number of employees who gave notice ÷ average number of employees
For example, if you had 88 employees in January 2018 and you have 100 employees in January 2019, your average number of employees would be 94 (88+100)/2 = 94. If 22 employees resign or are laid off during this period, your turnover rate would be 23% (22/94 = 23).

The turnover rate can be calculated for any period: month, quarter or year. Turnover can also be calculated by department, location, division or manager to get a better overview of personnel matters.

4. Cost per hire (average cost per hire)

The cost per hire is calculated by dividing the costs (marketing costs, recruitment costs or relocation costs) by the number of new hires.

Excessive external costs could be an indicator that you need to invest in internal recruitment resources such as training or technology, hire an additional recruiter, or re-evaluate the media you have selected to market your positions.

Cost per hire measures what you pay to hire and employ each new employee. It can be as high as $4,200 per employee or more. To determine your cost per hire, consider your hiring costs, the cost of a applicant tracking system (ATS), the time the manager spends interviewing candidates, and your integration and training costs.

Cost per hire = All costs for recruitment and HR staff ÷ Number of new hires
For example, suppose you hired a human resources manager this year who spends half his time recruiting. You also spent $600 on software, $3,500 on referral fees, and about 200 hours of management time interviewing candidates and welcoming new employees. Add to that $36,500 nine new hires this year, and you have nine new hires. Your hiring costs would be $4,055 - $36,500/9 = $4,055.

5. Acceptance rate (percentage of candidates who receive and accept offers)

Acceptance rates are calculated by dividing the total number of accepted applicants by the number of complete offers and then multiplying by 100.

This number helps you determine whether you need to improve your candidates' experience, your service offerings, or the competitiveness of your offers.

Learning and Development

6. Readiness (degree of readiness of the organisation from a human capital perspective to implement the company's strategy)

Readiness is calculated by dividing the total number of vacancies by the total number of approved posts, then multiplying that number by the total number of persons who have undergone the required competency assessments and dividing it by the total number of persons who have undergone competency assessments. The answer is then multiplied by 100. Let me make it simple: (Vacant positions/total number of positions) x (Employees with required competency assessments/total number of employees assessed) x 100.

We recommends that you perform this calculation for key roles only. This is an important measure of whether your workforce is aligned with your company's performance.

7. Training participation rate (percentage of employees participating in development opportunities)

The training participation rate is calculated by dividing the number of employees who have attended a training opportunity by the number of employees who were eligible for it and then multiplying by 100.

The results will help you determine whether you are providing the "right" type of training, whether you are using the best method of delivery, or whether you have delivered the opportunity effectively.

Performance Management

8. average performance rating (average performance rating for a selected group of employees)

The average performance rating is calculated by dividing the total sum of all performance ratings by the number of employees who have received a rating and then multiplying by 100. I suggest taking this number and comparing it with a broader distribution.

If you follow this measure, you will know if your performance management programmes are working effectively and if some teams are falling behind.


9. use of benefits (percentage of employees participating in a particular benefit plan or program)

Participation in benefits is calculated by dividing the number of employees enrolled in a plan or benefit by the number of eligible employees and then multiplying the result by 100.

Each benefit involves costs. If employees do not use some of them, the connections must be severed and moved on. Invest the money in plans that are used more frequently.

Organizational effectiveness

10. Employee engagement (degree of employee commitment to the strategy and objectives of their organisation)

The calculation of the obligation is a delicate matter. Most organisations invest in a third party resource, which usually includes a thorough investigation - it is worth it. A high level of commitment is an essential characteristic found in high performance organisations.

11. Workers' compensation claims (measuring safety at work)

The analysis of your employees' claims for compensation (amount and cause) enables you to ensure and maintain a safe working environment for your employees.

If you’re looking for an automated Human Resource Management system, we suggest you IceHrm which is one of the best HRIS systems which has so many HR functions automated into one system.

IceHrm is a Human resource management system for small and medium-sized organizations. This HRM software centralizes employee data and allows only one authorized person to access it, providing a high level of security. The presence module monitors employee time based on information about insertion and perforation. It covers all the basic HRM needs of a company such as Time Management, Training, and Development, Attendance Management, Expense management, leave management, Recruitment management and handling employee information.

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