A guide to human resource metrics

Human resource metrics are vital for measuring the effectiveness of your organization’s policies and initiatives. Does your organization have all the data it needs to make changes and monitor the health of your HR department?

Our complete guide provides essential information and tips for tracking your HR metrics.


Why your HR initiatives need performance metrics

HR metrics are critical for accurately tracking the effectiveness of your organization’s people strategy and HR programs. They offer deeper insights into your organization’s overall efforts regarding your human capital.

Small to medium-sized organizations sometimes overlook vital human resources metrics because they consider them too complicated or time-consuming to track. They may not realize their importance and sometimes undervalue the benefits of having this type of data.

It’s important to know which metrics to measure. After all, you can’t improve what you don’t track. This guide to tracking essential HR metrics will provide an overview of the most important metrics you need to know.

Topics covered in this guide include:

What key metrics do you need to track?

Choosing a few key HR metrics to track will help you uncover strengths and weaknesses within your organization and help you understand which areas need improvement.

HR metrics help you:

  • Tap into the quality and stability of your workforce
  • Understand if human resources initiatives are working
  • Make informed decisions to recruit and retain the best talent
  • Spend your HR budget wisely
  • Set a foundation for long-term organizational success
  • Establish a business strategy

Now that you know why gathering and tracking HR data is essential, the next step is to figure out what to track. Different data provides different insights. You should identify your organizational goals to know what data to gather and track to measure your business performance.

Below are the top HR data points any business can track to provide strategic insights into HR trends, costs, efficiencies, productivity, and success. Every organization is unique, so choose the most relevant metrics to your preferred business outcomes.

Employee demographics

Your HR department should track employee demographics and headcounts over time to measure growth and diversity. Protecting organizations against discrimination claims and satisfying federal and state laws is also essential.

Organizations with 100 or more employees must file an EEO-1 report annually to the Equal Employment Opportunity Commission (EEOC). This includes information such as race and gender. However, all employers should track this information.

Potential employee metrics include the age of your workforce, education level, location (i.e., if an employee is on-site, fully remote, or hybrid), and how long your employees have been with your organization. You can also collect information on disabilities and sexual orientation to support your workforce better. However, you can’t require employees to provide this information.

One way to gather employee demographic information is by conducting an anonymous survey. You’ll want to be transparent about how you will use the data to encourage participation.

Employee retention rate

You can track your employee retention rate to understand how your retention strategies are performing and gauge employee morale. Pair this metric with your employee turnover rate and the average cost associated with turnover to get a sense of how much your organization spends on replacing workers who leave.

Tracking these overall recruitment metrics helps organizations make data-driven decisions on hiring, onboarding, retention, and HR policy.

Calculating your employee retention rate

Calculating your employee retention rate is simple. Subtract the number of employees who left during a particular measurement period (such as a year) from the total number of employees you started with at the beginning of the time period, then divide that number into the total employee count you had at the beginning of the time period. This will give you the percentage of employees who remained at your organization.

Sample inputs

Sample calculation

Period of time

Fourth quarter

24 employees - 4 terminated employees = 20

20 / 24 = 0.8333

0.83 x 100 = 83, or 83% retention rate

Total employees at the beginning of Q4


Total employees terminated/lost in Q4


Standard retention rates are anywhere from 70%-85% but vary significantly by industry and calculation method. You can even break down your retention rate by department, business leader, or manager. This is known as the retention rate per manager.

Cost of turnover

Knowing and tracking the cost of losing an employee will help you make more strategic decisions about benefits and retention activities. You should also monitor new hire turnover, or what percentage of new hires leave within their first 90 days or year of employment.

How to find your turnover rate

The example below shows a company with 24 employees. It had four workers leave during Q4.

Sample inputs

Sample calculation

Period of time

Fourth quarter

4 / 24 = 0.1666667

0.167 x 100 = 16.7%, or 17% turnover

Total employees at the beginning of Q4


Total employees terminated/lost in Q4


According to the U.S. Bureau of Labor Statistics, the average total turnover in the U.S. was 3.5% in September 2023. The average voluntary turnover rate was 2.3%.

How to calculate the cost of employee turnover

The cost of losing an employee varies by industry and the role at your organization.

Here are estimates based on a Center for American Progress (CAP) study you can use to estimate your costs.

Annual wages

Cost of turnover

Less than $30,000

16% of annual salary

Between $30,000 and $75,000

20% of annual salary

Greater than $75,000

Up to 213% of annual salary

Of course, each company is unique. Some organizations have an easier time replacing an employee based on the job or location.

With the right data, you can calculate your specific cost of employee turnover by taking into account the following factors:

  • Lost productivity
  • Lost employee engagement
  • Hiring and recruiting costs
  • Orientation and training costs
  • Cultural impact on your organization, which can affect overall employee performance

Time to fill and time to hire

Time to fill and time to hire are related common metrics, but they don’t measure the same thing.

Time to fill is the time it takes for you to fill an open position. Similar to recruiting and hiring expenses, knowing your time to fill a position will help you understand the true cost of employee turnover. It can also help you improve your candidate experience.

Remember that this is heavily affected by current economic conditions and the public perception of your organization. The longer the recruitment process takes to fill a position, the greater the costs.

Meanwhile, time to hire represents the time between a candidate applying for the job and signing an offer letter. If your recruitment process is too long, you may lose the interest of qualified candidates to a competitor.

You want to ensure your time to fill and time to hire is as short as possible.

How to calculate time to fill

You can measure the time to fill a position with a simple calculation:

Time to fill = average days a job is open before it’s filled.

For this calculation, track the following inputs:

  • Position and department
  • The date you opened or posted the job
  • The date a candidate accepts an offer or starts

Current and historical compensation data

Your organization should track compensation data to ensure you’re meeting your area’s minimum wage and overtime expense requirements. This also helps you understand employee growth within the organization. It’s also helpful to know what other organizations pay for comparable positions so you can stay competitive.

How to calculate compensation data

To track historical and current compensation data, collect and analyze the following information:

  • Employee name
  • Employee class
  • Position start date
  • Starting salary
  • Current salary
  • Additional wages, such as bonuses or tips
  • Other wage information relevant to your current workforce

Training and onboarding expenses

If you have training or onboarding programs, you must calculate the training costs to see how much you’ve invested in onboarding versus the program’s effectiveness.

Workforce planning—including calculating your training and onboarding expenses—helps you understand your cost per hire and is vital for budgeting. Successful onboarding can reduce hiring costs, and ongoing employee training and professional development will help lower turnover and improve the employee experience.

How to calculate training and onboarding expenses

To calculate training and onboarding expenses, include the following:

  • Personnel time (i.e., the average time spent preparing for and hosting training sessions, determining training effectiveness after completion, etc.)
  • Training materials and supplies, including subscriptions and memberships
  • Any external costs, including meeting space, catered lunches, etc.
  • Social activities

You can collect this data in a budgeting spreadsheet or flag it in accounting software for easy tracking and analysis.

Recruiting expenses

In addition to your training and onboarding expenses, your recruiting expenses factor into your hiring costs. You can use this information and your recruitment data to see which job posting platforms your eventual hires find you on to determine which ones produce quality candidates for your organization.

How to calculate recruiting expenses

To calculate training and onboarding expenses, include the following:

  • Advertising costs
  • Recruiting software fees
  • Networking
  • Personnel time (creating an engaging job description, time spent screening, managing the interview process, etc.)
  • Any fees for posting an open position on job boards or social media platforms
  • Any fees for screening programs

You can collect this data in a budgeting spreadsheet or flag it in accounting software for easy tracking and analysis.

Employee satisfaction and experience metrics

Employee satisfaction data, typically collected through surveys, is an important indicator of morale and company culture. Engaged employees stay at your organization longer, are more productive, and help reduce recruitment and hiring costs thanks to lower turnover and more referrals.

How to calculate employee satisfaction

An easy way to determine if you have an engaged workforce is with a pulse survey. Free survey tools, such as Google Forms, are available online, or you can use a third-party specialist to determine your employee engagement score.

When creating a survey, keep it simple. Include a few targeted questions about satisfaction, culture, growth, pay, benefits, advancement, etc.

You can use the results of this survey to make improvements that can result in more satisfied employees, thereby increasing retention.

Absence rate

Absenteeism is when employees miss work due to personal illness, personal time off, or other reasons that usually exclude pre-approved paid time off. You can measure this at your organization with an absence rate. This simple measurement gives you a clearer picture of how many days employees are missing from work.

A high absence rate can indicate employee dissatisfaction and disengagement, which can lead to turnover if left unchecked.

How to calculate your employee absence rate

To calculate your absence rate, you can use the equation below.

Absence rate equation

Sample inputs

Sample calculations

Individual employee absence rate = (number of unexcused absences / total work days) x 100

Number of absences


Individual absence rate = (10 / 260) x 100

Individual absence rate = 0.03846 x 100

Individual absence rate = 3.85%

Total work days in 2023


Organization absence rate = (number of unexcused absences / (total work days x average number of employees)) x 100

Number of absences


Organization absence rate = (45 / (260 x 8)) x 100

Organization absence rate = (45 / 2080) x 100

Organization absence rate = 0.0216 x 100

Organization absence rate = 2.16%

Total work days in 2023


Number of employees


Revenue per employee

Revenue per employee (RPE) shows you how much revenue each employee generates for your organization. A higher number represents higher employee productivity and efficiency. This metric mainly applies to for-profit organizations, though not always.

This also lets you easily see how revenue compares to employee wages and other costs.

It's essential to understand that some employees may not directly contribute to sales or higher revenue but are still necessary members of your team. When using this metric to track individual employee performance, you shouldn’t apply it to those employees.

How to calculate revenue per employee

To calculate an average revenue per employee for your organization, you take the total revenue generated over a period of time, such as the previous year, and divide it by the total number of employees.

For example, suppose you had $1 million in revenue last year with 20 full-time employees during that period. In that case, you’d divide $1 million by 20. This equals $50,000 per employee.

Benefit and perks metrics

Calculating common metrics related to your employee benefits helps you budget better and understand how much your employees value your perks. Calculating benefits metrics lets you easily see which benefits contribute to employee retention and satisfaction.

Offering competitive benefits is extremely important for attracting and retaining top talent for your organization. Providing perks to your workers can improve job satisfaction and employee happiness.

You must ensure your benefits budget per employee is high to recruit and retain workers, but it should also be realistic and affordable. At the same time, you don’t want to contribute to benefits your employees see little value in. A low benefit participation rate will hurt your overall budget and can also reflect low employee satisfaction.

Calculate benefits and perks expenses

Each company has a unique set of benefits and perks. You should track how much you spend on your benefits package.

To calculate benefit and perks expenses, include the following:

  • Benefit plan costs, such as contributions to health insurance premiums, employee stipends, tuition reimbursement, retirement, 401k matching, and more
  • Any administrative costs associated with managing your benefits
  • Software fees
  • Supplies, such as free snacks, party supplies, and more
  • Employer-provided cell phones

This data can be collected in a budgeting spreadsheet or logged in accounting software for easy tracking and analysis.

You can also measure benefits costs per employee in various ways. Each method produces different metrics that can help you assess the effectiveness of your benefits package.

To get your benefits costs per employee, divide the annual costs of your benefits by the average number of workers you employ. You can also calculate benefits as a percentage of overall pay. To do so, divide the total amount you spend on benefits annually by the total you spend on salaries and wages.

How to reduce benefits costs

If you have a high benefit cost per employee, you might be tempted to cut back on the benefits you offer. However, this can increase turnover and absenteeism if your workers seek new opportunities with better benefits.

You can send out an employee benefits survey to determine which benefits your employees value the most. If there are benefits with little to no use, you can cut those benefits without worrying about any adverse side effects.

You should also consider alternatives to traditional employee benefits. Personalized benefits provide increased flexibility for your workers while helping to reduce your overall benefits costs. For example, you can offer a tax-free health reimbursement arrangement (HRA) instead of traditional group health insurance.

An HRA allows you to reimburse your employees for their qualifying medical expenses, such as out-of-pocket expenses and individual health insurance premiums, giving them more freedom to use their benefits on the medical expenses they want.

You can also offer employee stipends to reimburse your employees for various expenses such as health, wellness, remote work, professional development, and commuter perks. These lifestyle benefits give your employees flexibility in how they use their allowances.

Your employees will value your new individualized benefits, and you get better cost control by setting maximum monthly allowances for reimbursement.

Time since last promotion

This metric measures the average time (generally in months) since an employee’s last internal promotion. This can help you identify if your employees have opportunities to move up within the company and grow their careers. If not, it might help explain your high turnover rate.

Effectiveness of your HR software

If you utilize HR software at your organization, you’ll want to measure its effectiveness often. For example, suppose you pay for software that provides online courses for your employees to learn new skills. In that case, you’ll want to track how many employees use the software, how long they spend on the platform, and whether or not employees who use the software stay at your organization longer than those who don’t.

Measuring the success of your HR software will show you what software helps your organization grow and which doesn't.

Return on investment (ROI)

Knowing your return on investment (ROI) is key to making strategic decisions for your organization. ROI is a performance measure used to evaluate the efficiency of an investment.

How do I calculate return on investment (ROI)?

To calculate ROI, divide the payback (return) of an investment by the cost of the investment and multiply by 100 to get a percentage.

ROI = [(payback - investment) / investment)] x 100

Tips for tracking human resource metrics

HR metrics should be simple, clear, and connected to your organization's goals and priorities. Here are six tips for tracking HR data as you consider which data points matter to your organization.

1. Know why each HR metric matters

As you collect and track HR data, remember why you're collecting the data and why it's important to your organization. If you’re not connecting the data to an organizational priority, don't spend time tracking or analyzing it.

Without a good idea of why your ROI and metrics matter, you won't be able to develop a cohesive business strategy.

2. Keep it simple

HR metrics shouldn't be complicated. It likely won't be used if the metric isn't simple, clear, and easily gathered and calculated. Track and collect simple, straightforward information that will provide deeper insights into your HR and organizational objectives.

3. Identify how you will track data

Many tools are available to track HR data, from spreadsheets to comprehensive human resource management systems. An important step is to identify which data you will collect and how.

4. Know your audience

As you collect HR data, some information will be more insightful to HR, and others will be more insightful to stakeholders like the owner or CFO. Remember the metrics that matter most to your audience as you present information.

5. Connect HR metrics to organizational objectives

The most powerful and useful HR data connects HR metrics to business objectives. If you've collected the data, be sure to put it into use.

6. Don’t just file data away—share it

You've collected a lot of great HR data. But it’s a continuous process, so don't just file it away each time you gather it. Analyze, learn from, and share it with your leadership team. Then, create a strategic plan with actionable next steps to help you reach your business goals.

How to use your results

When it comes to HR ROI calculations, the goal is to use the information to make smarter HR decisions, spend company money more wisely, and create a high-performing and productive workforce.

HR data that leads to action

When it comes to HR ROI calculations, the goal is to use the information to make smarter HR decisions, spend company money more wisely, and create a high-performing and productive workforce.

HR data that leads to action

Data without analysis and action is just numbers on a screen. Use your HR data to understand trends, issues, and opportunities. Then, take action to make changes based on your learnings.

To maximize your HR ROI calculations:

  • Connect the HR data to business objectives and goals.
  • Use the data to drive organizational improvements. Find out what is working and not working, then make changes based on your learning.
  • Schedule regular times to review the data and put it into action. Strong habits produce strong results.
  • Communicate learnings and recommendations to key decision-makers.

Data management options when calculating HR ROI

An important step in tracking HR data is developing a system to track and record information. How you track and analyze the data will depend on what you are tracking. Don't worry; your data management system doesn't need to be overly complex. But it does need to be consistent, time-efficient, and scalable.

Data management options and tools





Use Excel, Google Sheets, or another spreadsheet program to track your HR data points.

  1. It’s easy to use
  2. It’s inexpensive to set up (and sometimes free)
  1. It requires manual entry and maintenance
  2. It’s time-consuming to accurately maintain

HR software

There are numerous HR software solutions on the market to help with employee management, the hiring process, personnel, and compliance administration.

  1. There are various options and features are available
  2. There are cloud-based options are available, which are easy to set up and use
  3. It makes data collection and reporting more automated
  1. Fees are required but they vary by type of software and vendor
  2. Some businesses find limitations in customizing HR software

Comprehensive human resource management system (HRMS)

A human resource management system (HRMS), also known as a human resource information system (HRIS), is a comprehensive system designed to store and analyze HR data, as well as track job applicants, performance management, attendance, compensation, and benefits management, workforce analysis, and scheduling.

  1. It minimizes errors since there is less manual data entry
  2. It allows for employee self-service
  1. It has the most expensive administration costs of these options.
  2. It may not deliver a high enough return for small- and medium-sized organizations

Employee benefits administration software

Employee benefits administration software like PeopleKeep is designed to make setting up and managing your employee benefits simple. With our HRA and stipend solutions, you can manage your benefits in just minutes each month.

  1. It’s easy to manage benefits
  2. It has useful dashboards that show summaries at a glance
  1. Some platforms can be expensive

Looking for employee benefits that provide a better ROI?

Providing a robust employee benefits package is a great way to attract skilled workers and retain employees while improving morale. But choosing the right benefits and perks for your organization is crucial to your employees receiving the best value while you get the best bang for your buck.

With PeopleKeep's industry-leading benefits administration software for HRAs and employee stipends, you can easily manage personalized, low-cost benefits and allowances for your employees.

Contact a PeopleKeep personalized benefits advisor who can answer your questions and help you discover the best benefits for your company.