Our guide to the top 21 key HR metrics

As Peter Drucker once wrote: “What gets measured, gets managed”. 

HR is a broad function that delivers many systems, processes, and initiatives to increase the wellbeing and productivity of workers across the board. The only way to measure their effectiveness, however, is to constantly monitor and optimise using key metrics. 

Doing so is even more crucial for frontline (or ‘deskless’) workforces. Most of the time, these workers are on their feet, working different shifts and dispersed across multiple locations, while juggling multiple tasks at once. With this being the case, gathering comprehensive HR metrics and insights can be difficult  — especially without the right technology in place.  

Whether you’re a frontline manager reporting to the head office, a HR coordinator reporting to your manager, a Chief Human Resources Officer (CHRO) reporting to C-suite, or a HR manager maintaining compliance across various employment laws, this guide will help you pick the top HR metrics to include in your next report. 

The Humanforce HCM suite provides comprehensive analytics and reporting across all aspects of the employee lifecycle, covering Workforce Management, HR Management, Talent Acquisition, Benefits and Payroll. Although there are literally hundreds of potential HR metrics to track, below we highlight just the essential metrics across seven key areas.

Workforce

1. Workforce headcount

As a foundational HR and business metric, workforce headcount simply refers to the number of people in your organisation at any one time. 

While this seems like a simple figure to keep track of, many organisations find it difficult to keep an accurate workforce headcount — especially for larger organisations with multiple locations and a casualised, shift-based frontline workforce.  

With Humanforce’s People Analytics solution, you can easily determine the number of people employed at your organisation at any one time, either as headcount or full-time equivalents, depending on how your organisation reports: 

• Headcount: refers to the number of bodies in your organisation at any time. It does not distinguish between full-time, part-time, casual, etc. employees. 

• FTE: refers to the number of full-time employees working in your business. This is often a more accurate representation of the total capacity of your workforce at any time.

  

  Humanforce HR’s workforce headcount report

2. Demographics and diversity

In addition to the number of people in your organisation, it’s often important to be able to describe your people across a range of attributes such as age, gender, team, and location, especially to evaluate and report on any diversity and inclusion efforts. 

Using Humanforce’s People Analytics solution, you can cross-filter your people data to gain more specific insight into the structure of your workforce e.g. 

• Work type / work class: Shows the distribution of human capital across different employment types. Is your workforce permanent or contingent? What is the ratio of full-time to part-time to casual? How many independent contractors do you have? 

• Gender / age: Demographic filters can provide useful insight into the composition of your workforce. What is the gender composition in your leadership teams? How many employees are nearing retirement? What positions do they hold? Is your business compliant with the relevant equality legislation for your region? 

• Business unit / business entity: Shows the distribution of human capital across different areas of the business. Where do you have the most capacity? Does this reflect true business needs? 

• Pay inequality / gender pay gap: Automatically calculate the gender pay gap in percentage and dollar value across your organisation. You can also apply filters to identify pay inequality in different departments, work classes and seniority levels. 

• Ethnicity / ability / other demographics: Use custom fields to gather further demographic information to support your diversity, equity and inclusion (DEI) initiatives. E.g. How much ethnic representation do you have in your workforce? Are your employees with special needs well-supported? Do certain departments have higher education requirements than others?

  

Recruitment and attraction

There are a number of key HR metrics that can give you insight into the start of an employee’s journey with your organisation. The following metrics will help you gain a better understanding of your hiring and onboarding processes.

3. Recruitment spend

Total recruitment spend is the total amount you’ve spent hiring new employees over a certain time period. With People Analytics, you can also break down this information to identify your spend on different recruitment channels, and the most effective channels based on their ROI.

4. Cost per hire

Cost per hire is the average financial cost (or investment) you incur in bringing new employees on board. This HR metric can be used as a budgeting tool as well as an indication of recruitment effectiveness. 

CPH = (All external costs + All internal costs) / Total no. of hires in time period 

CPH is a multi-purpose metric applicable to any business that’s straightforward to calculate. Frontline businesses relying on seasonal hiring patterns, such as those in Retail or Hospitality, can find great utility in CPH when optimising hiring budgets for mass intakes.  
For more details on calculating CPH and its variations, check out this Society for Human Resource Management guide.

5. Time to hire/time to fill

Average time to hire is another important recruitment metric that gives a good indication of the efficiency of your recruitment process. It’s simply the number of days between when a candidate applies for a job and when they accept an offer.  

Average time to fill captures the number of days from when a job requisition is created, to when the offer is accepted by the candidate. By capturing the admin processes at the beginning of recruitment which can so often slow things down, this metric provides additional insight into your recruitment process efficiency.

It is critical to reduce the average time to fill, especially during an ongoing skills shortage where the best talent gets snapped up by organisations that act swiftly, leaving the others to return to square one. 

Wondering what a good time to fill a position is? According to the Majer Recruitment, in Australia, the average time is about 82 days. How does your organisation compare? 

Humanforce Talent helps track all your key recruitment metrics and can reduce time to hire and cost per hire — find out more here.

6. Time to productivity/performance

Time to productivity is the average time it takes a new employee to reach the expected level of performance. 

When a new employee starts, depending on their role, it can take up to 12 months to get up to speed. Until this time, the employee isn’t profitable because the organisation is outlaying time, resources, and financial costs that are typically higher than the profit the employee generates (as you can see on the employee lifecycle graph above). 

That’s why it’s useful to know the average time it takes an employee to reach this breakeven point, so that you can do what you can to speed up the process to help your employees attain the profitable performing stage earlier on in their tenure.

7. New hire turnover

New hire turnover is the number of new employees who leave your organisation within a certain time period, typically 90 days, 6 months, and 12 months. 

This key HR metric can shed some light on important recruitment and retention questions. Is our onboarding process effective? Are we hiring the right people? Are new starters receiving enough support?

Productivity and performance

Productivity and performance can be measured at both organisational and individual levels. To understand the productivity of your workforce, you can calculate the revenue or profit per employee and human capital ROI. Every organisation uses different metrics and methods to measure individual employee performance — we’ve listed just a few below.

8. Revenue per employee

Revenue per employee is the amount of revenue from operations generated per permanent employee, calculated as: 

Revenue per employee = Revenue / No. of permanent employees 

A fairly straightforward metric, revenue per employee can give you a holistic view of how revenue driven your workers actually are. While a higher RPE can indicate stronger productivity, a lower one can uncover inefficiencies, overstaffing, or a need for better processes.

9. Absenteeism rate

Investigating your absenteeism rates, or how frequently employees use their sick leave doesn’t just reflect the productivity of your workforce, but also provides clues to their overall health, happiness and commitment. High rates of absenteeism can also be an early indicator of turnover. You can calculate your absenteeism rate with the following formula: 

Absenteeism rate = Total no. of workdays missed due to illness / No. of permanent employees 

For frontline workplaces, high levels of absenteeism can quash business productivity — and even worse, act as a sign of disengagement or declining mental health throughout the team. Similarly, tracking tardiness (being late for shifts) can provide a clue to overall performance. Tardiness can be tracked in Humanforce’s Workforce Analytics.

10. Overtime

This metric is the average amount of overtime hours worked by your employees within a certain period. Overtime figures have an impact on other key HR metrics such as engagement, performance, and employee turnover; extended work hours are often drivers of burnout and rising instances of mental health issues. 

Average overtime hours = Total overtime hours / No. of employees 

It’s worth comparing this metric to the industry average. While overtime is common (and often necessary) in many industries, a disparity between company and industry averages can be a sign of the issues mentioned above. Track overtime easily during roster creation using Humanforce’s Rostering & Scheduling solution, and track labour spend in the Workforce Analytics solution.

11. Goal achievement

One easy way to work out if your employees are performing is to measure their goal or KPI achievement rate. If you have access to a goal setting and tracking software, such as Humanforce’s Performance Management solution, tracking and quantifying goal progress is simple and quantifiable. You can even cascade organisational goals down to teams, or allow employees can set their own.

12. 360-degree feedback

Want to get a full picture of how an employee is performing? Ask those around them. 360-degree feedback can be collected from peers and co-workers, direct and indirect reports and a score can be calculated from a rating across different areas e.g. collaboration, quality of work etc.

Engagement and wellbeing

A healthier, happier, more engaged workforce means a more motivated and productive workforce — who in turn provide better customer service. Achieving this means placing engagement and wellbeing at the top of your priorities list. Here are a couple metrics to uncover how your employees truly feel at work.

13. Employee happiness / satisfaction

Employee satisfaction has been linked with a whole range of benefits for both the employee and the organisation, including higher sales, productivity, customer satisfaction and lower turnover. While there’s no set formula to measure employee satisfaction, there exists software solutions to help quantify and measure the wellbeing and attitudes of your employees at any given time. 

The Humanforce Employee Engagement solution generates analytics automatically generates a report that shows the “happiness” of your workforce based on continuous feedback that you collect through check-ins.  

With Humanforce Employee Engagement, you can harness the power of customisable forms, anonymous surveys, and keyword clouds. This gives insight into employee sentiment and attitude at a particular point in time. It can also help identify training and L&D needs.

In addition to your happiness score, you can quickly explore why happiness might be dropping or increasing through interactive charts and filters. For example, if the keyword cloud indicates “busy” might be a common theme, it will appear larger and more prominent in the cloud.

14. eNPS

eNPS or employee net promoter score is a good proxy of employee engagement, which assesses how loyal an employee is by asking: “How likely are you to recommend this company to your friends and family?” 

eNPS is typically measured on a ten-point scale where 1 is not happy and 10 is satisfied. Employees are then divided into three groups based on their scores: 

• 9-10: Promoters – employees who are more likely to speak positively, or promote the organisation to others 

• 7-8: Passives – neutral employees 

• 0-6: Detractors – employees who are more likely to speak negatively about the organisation 

The organisation eNPS is calculated using the following formula with the final score falling somewhere between -100 to +100. 

eNPS = Employee Net Promoter Score = % of Promoters minus % of Detractors

15. Sentiment

The sentiment of your organisation is the overall “mood” of how employees are feeling and can reflect the culture and internal factors as well as broader external factors (e.g. during tough economic times, sentiment can drop). 

Humanforce’s sentiment analysis tool takes all of the inputs across your business — from pulse surveys, to wellness checks and feedback — and analyses them using AI to come up with a mood indicator.  

If this is in the red, or you see it shifting downward over time, you can drill down to quickly identify where issues are occurring.

Training and development

Training metrics can help you understand employee development and put a figure on both the monetary and time costs your organisation is investing into training, so you can answer the all-important question “Are you getting a return on your investment?”.

16. Training cost per employee

Training hours per employee is an average of the number of hours of training each employee is completing within a given time period. 

If you track all of your training in Humanforce, then we’ll automatically calculate this figure for you. Toggle to the “hours” display on the training investment report and select the chart insights widget again to see the average training hours.

Humanforce HR's training and development report helps track your investment over time.

17. Training hours per employee

Training hours per employee is an average of the number of hours of training each employee is completing within a given time period.

If you track all of your training in Humanforce HR, then we’ll automatically calculate this figure for you. Toggle to the “hours” display on the training investment report and select the chart insights widget again to see the average training hours.

Retention

According to Gallup, replacing a frontline worker costs up to 40% of their salary. It almost always makes sense to try and retain the talent you’ve already got, helping you save on hiring costs while also preserving team morale and knowledge. These metrics are the first to consider when improving your retention strategy.

18. Attrition rate

Employee turnover, or attrition, is defined as the loss of employees who need replacing from an organisation over a period of time. Attrition rate (or turnover rate) is the proportion of employees that have exited the business, divided by the total number of people employed at the beginning of the reporting period: 

= No. employees exiting organisation – total employees at start of reporting period x 100 

Note: this means that generally, a shorter reporting period will return a lower attrition rate, as there has been less time for employees to leave. A useful tool to compare trends over different time periods is to calculate an ‘Annualised Attrition Rate’. This is calculated using the following formula: 

12 x attrition / reporting period (in months) 

A high attrition rate can signal a variety of issues within your business, from toxic culture to lack of flexibility. Some frontline industries, such as Leisure & Events & Stadiums, may experience inherently high attrition rates due to their reliance on casual, seasonal staff. 

It’s also important to differentiate between voluntary and involuntary turnover: 

• Voluntary turnover is when an employee resigns on their own accord 

• Involuntary turnover is when they’re terminated or let go 

Understanding these figures gives important context; high voluntary turnover may signal a toxic work environment, while high involuntary turnover may be a sign of business transformations, downsizing, or inefficient workforce planning.

19. Average cost of turnover

Average cost of turnover is how much it costs you to hire and replace employees who have left. You’ll want to consider not just the costs of hiring a new employee (e.g. advertising and recruitment), but also the costs of onboarding and training their replacement, including the time costs of the staff who are taken away from their normal activities. 

This can be quite a complex calculation — we suggest using an online calculator to make things a little easier.

20. Exit drivers

These are the reasons why your staff are leaving and will help you to understand and address any issues that may be contributing to turnover. It might be inadequate onboarding, poor company culture, or a managerial issue — but if you don’t ask, you’ll never know. This is why exit interviews are so important.

Understand and explore what’s driving turnover with Humanforce HR’s exit drivers analytics.

21. Retention rate

Employee retention rate is the number of people who remain at an organisation within a given period. This metric can help indicate what events, changes, or context caused employees to stay in or leave their roles. The calculation is as follows: 

Retention rate = No. of employees staying across time period / (No. of employees at start of time period ) x 100 

Note: this formula does not include any new employees hired during the period. 

Retention rate can help HR leaders understand what is and isn’t keeping people on deck, while also speaking volumes about company culture and progression pathways.

About Humanforce

Humanforce is the all-in-one platform for frontline and flexible workforces, offering a truly employee centred, intelligent and compliant human capital management (HCM) suite – without compromise. Founded in 2002, Humanforce has a 2300+ customer base and over half a million users worldwide. Today, we have offices across Australia, New Zealand, the US, and the UK. 

Our vision is to make work easier and life better by focusing on the needs and fulfilment of frontline workers, and the efficiency and optimisation of businesses. 

To learn more about how Humanforce’s solution can help automate people processes in your business, please contact us.