12 essential metrics all HR managers should be measuring

Mina Pampus · 24 Feb

If the word ‘metrics’ makes you instantly recoil, conjuring up images of being knee deep in numbers, then fear not: we are here to help.

Selected and measured correctly, metrics are your friend. They can help you to identify weaknesses and strengths and to build a strategy in reaction, helping your organisation to evolve positively and be more focused.

So, it’s time to stop relying on your gut and start relying on the indisputable data. We have selected 12 simple metrics, to help you upgrade your HR practices.

Let’s banish metrics from the stuff of nightmares and transport it to your vocabulary’s more pleasant contingent...


1) Cost per hire: (Amount spent on recruitment + amount spent on training + ) ÷ number of new hires

Calculating the amount you are spending per new recruit can help you determine where to invest your recruitment cash. UK employers spend on average £30,614 (SOURCE?), per new employee. This is more than the average UK salary, and means that employee turnover is costly.

Handy Hint: Making the most of the recruiting tools available online can significantly reduce your employment costs. Host interview on Skype to reduce travel costs or publish your adverts on LinkedIn for free, for example.


2) Effectiveness of recruitment sources: (Number of successful applicants from a source ÷ total number of applicants from a source) x100

Monitoring the sources you use for recruitment will help you ensure the best ROI and can help you adapt your strategy based on this.

Handy Hint: Draw up a comparison of paid and free sources to see where you could be saving some cash.

3) Acceptance rate : (Number of people who reject a job offer ÷ number of offers made) x100

Ideally, this number should be very low. If it is not, consider investigating why you are losing out to your competitors.

Handy Hint: Compare your acceptance rate to that of others in your industry industry. Rates vary greatly so look to understand see where you lie compared to other companies.

The average number of sick days taken in the UK per employee is 5.7 days.


4) Average Length of Service: (Total years service ÷ number of employees)

There is no denying that employee turnover is a costly business, in senior roles in particular. Measuring this metric can help you to see where greater investment might help to generate higher returns.

Handy Hint: This metric should be considered against an industry average - a “good” average length of service can vary greatly across sectors.

5) Revenue per employee: Total sales revenue ÷ Number of employees

Measuring revenue per employee gives you a measure of the output of your employees on a more granular level and can help you measure your employees’ productivity. It can also help you compare your spending and your profit.

Handy Hint: Measuring this metric consistently, at regular intervals, will helps you understand how many employees you need to maintain a profit.

6) Salary Competitiveness Ratio: Salary offered by your company ÷ Average salary offered by competitors

A competitive salary package is integral to the attraction and retention of staff. Tracking this metric will ensure that you are offering fair compensation to your employees but not overpaying them!

Handy Hint: You should aim for a 1:1 ratio (or better) with competitors.

7) Employee Turnover: Number of employees who have left the company in the previous year ÷ Number of employees at that time) x100

High turnover can present a significant financial burden to your business. It is therefore important to track this metric to keep it as low as possible. Doing so will allow to you identify problem areas and trends and adapt in light of these.

Handy Hint: The UK average employee turnover rate is approximately 15% a year, but varies greatly between industries. Look up your industry’s average rate and make a comparison.

8) Overtime: Number of hours worked overtime per year, per employee

Calculating the extra time your staff are spending in the office can be helpful to see where the need for extra resources and manpower lies. It can also help you identify areas where productivity might be falling short.

Handy Hint: Employers aren’t legally obliged to pay workers for overtime but employees’ average pay for the total hours worked must not fall below National Living Wage, so be sure to adhere to this.

9) Absence Rate: Number of sick days taken ÷ Number of workdays in the year

Sick days incur significant costs to your company. Measuring absence rates can be used as a good starting point for ascertaining patterns and can be used to set a benchmark for the company.

Handy Hint: To give you a rough guide, the average number of sick days taken in the UK per employee is 5.7 days.


Employee engagement :

10) Training time per employee: (Number of hours spent training ÷ number of hours worked) ÷ number of employees

The importance of Learning and Development should not be underestimated. It is a key driver of retention and something that is considered increasingly valuable, it. Putting time into employees’ education can show that you are making a marked investment in your employees.

Handy Hint: If your number is low it is worth considering implementing more measures to ensure that your employees are performing to their maximum capabilities: consider a lecture series, or sponsored attendance at courses, for example.

11) Benefit Cost Per Employee: Amount spent on employee benefits ÷ number of employees

Ascertaining how much you are spending and comparing it to the employee satisfaction rating (see next) can help you deduce whether or not your offering is really helping your employees.

Handy Hint: Try Perkbox for an easy way to group your benefits together into one simple subscription.


12) Employee Satisfaction: Employee satisfaction survey

Though employee satisfaction is somewhat harder to measure, carrying out a quarterly survey is a good way to keep track of your team’s happiness levels.

Handy Hint: Limit the survey to a few questions to ensure participation and easy comparison of answers.

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