Top 20 most important HR metrics for data-driven teams

Tracking the right HR metrics has become essential for data-driven teams looking to align their people strategies with business goals. In a time where employee engagement, retention, and performance are more critical than ever for organizational success, the ability to measure and analyze key human resources metrics empowers teams to make informed, strategic decisions.

In this guide, we share the most important HR metrics and why they matter. From recruitment and retention to growth and development, the metrics you'll discover in this article can reveal insights into workforce trends, highlight areas for improvement, and help your organization move in the right direction.

What are HR metrics?

HR metrics are key data points that companies use to monitor, assess, and manage their workforce effectively. By tracking HR metrics, organizations can gain insight into areas like employee performance, employee satisfaction, retention, recruitment, and efficiency. These types of HR metrics, part of the broader field of people analytics, support data-driven decision-making and lay the groundwork for strategic workforce planning.

Tracking the right HR metrics helps businesses evaluate and optimize their human capital by addressing questions such as: 

• Are we retaining top talent? 
• Is our recruitment process efficient and cost-effective? 
• Are employees engaged and satisfied? 

Setting specific KPIs (key performance indicators) allows companies to target the metrics that align with their goals and monitor progress in real time.

To establish effective HR KPIs, businesses should focus on metrics that directly support their organizational goals and emphasize key areas like employee engagement, turnover rate, and revenue per employee. This approach ensures that the data they collect measures performance and also reveals actionable insights for growth.

Why are HR metrics important?

HR metrics play a significant role in helping organizations of all sizes understand and improve the effectiveness of their workforce. These metrics allow HR professionals to move beyond instinct and subjective experience to make decisions grounded in data, resulting in smarter, more impactful strategies. Here are five specific benefits of tracking the right HR metrics:

Enhanced employee retention

Monitoring metrics like turnover rate and employee satisfaction allows HR teams to detect early signs of dissatisfaction or burnout, especially in high-risk groups. By analyzing trends in employee turnover, HR professionals can develop targeted retention strategies, such as career development programs, improved workplace culture initiatives, or mentorship opportunities that address specific concerns, ‌increasing employee loyalty and reducing costly employee turnover.

Improved decision-making

Data-driven metrics allow HR teams to make informed decisions rather than relying on guesswork. For example, tracking the quality of hire and cost per hire gives teams a precise understanding of the effectiveness of their recruitment efforts. This insight helps HR professionals refine hiring practices, focusing on sources that yield top talent, ‌improving the overall quality of new hires and maximizing hiring ROI.

Better workforce planning

HR metrics provide critical data for workforce planning, helping HR leaders anticipate future needs. Metrics, such as internal mobility rate, succession planning rate, and absenteeism rate, help forecast staffing requirements and identify talent gaps early. This insight enables teams to take a proactive approach to filling essential roles with trained internal candidates, ensuring smooth transitions and continuity in leadership and key positions.

Compliance and risk management

Metrics related to compliance, like adherence to training completion rates (e.g., for safety or anti-discrimination training), help organizations stay compliant with labor laws and industry regulations. Tracking these HR metrics also provides a clear record of compliance efforts, which is key to minimizing legal risks and protecting the organization from potential fines or lawsuits.

Cost efficiency

Tracking HR metrics focused on cost efficiency, such as cost per employee and revenue per employee, allows organizations to assess the financial impact of their HR function and make adjustments to optimize costs. When organizations find overextended areas in the HR budget, they can streamline resources, focus on high-impact initiatives, and cut unnecessary spending, leading to better financial health and productivity.

20 key HR metrics to track in 2024

Tracking the right HR metrics can help your business gather actionable insights and make data-driven decisions. Below are essential HR metrics examples organized by focus area:

Recruitment HR metrics 

Recruiting the right talent is an essential first step in building a strong workforce. Tracking recruitment metrics can help you understand the effectiveness of your hiring processes, identify areas for improvement, and optimize resource allocation.

1. Quality of hire

This HR metric measures how well new hires perform relative to your company's standards, helping assess the effectiveness of recruitment processes.

Formula: (Average performance rating of new hires) ÷ (Average performance rating of all employees)

Insight: A high quality-of-hire score shows recruitment methods are bringing in high-performing employees, indicating effective sourcing, screening, and interview processes. A low score suggests the need to refine recruitment channels or candidate assessments to better align hires with performance expectations.

2. Cost and time per hire

This HR metric tracks the average expense of hiring each employee, including advertising costs, agency fees, and internal HR resources.

Formula: (Total recruitment costs) ÷ (Number of hires)

Insight: A low cost per hire score demonstrates efficient recruiting strategies, enabling resource savings without compromising candidate quality. High costs suggest that recruitment efforts may require streamlining, such as by optimizing sourcing channels or improving the application process.

3. Application completion rate

This HR metric tracks the percentage of candidates who complete the entire application process, providing insight into the effectiveness and usability of your organization’s application process.

Formula: (Completed applications) ÷ (Total applications started) x 100

Insight: A high application completion rate indicates an accessible and straightforward application process, which minimizes candidate drop-off. A low rate may highlight a cumbersome application experience, suggesting the need for simplification to retain more qualified candidates.

4. Offer acceptance rate

This tracks how many candidates accept your company’s job offers, reflecting the attractiveness of the offers and the candidate experience.

Formula: (Accepted offers) ÷ (Total offers extended) x 100

Insight: A high offer acceptance rate indicates attractive job offers and a positive candidate experience, which suggests competitive compensation and alignment with candidate expectations. A low acceptance rate may signal issues with offer competitiveness or candidate perceptions, suggesting a review of compensation packages or the hiring process.

Retention HR metrics 

Retaining top talent is just as important as attracting it. Retention metrics provide insight into factors that drive employee loyalty, engagement, and satisfaction. By tracking these metrics, you can understand and improve the employee experience, leading to lower turnover and higher retention rates.

6. Turnover rate

This HR metric measures the rate at which employees leave your organization over a specific period, highlighting retention success.

Formula: (Number of employees who left during the period) ÷ (Average total employees) x 100

Insight: A low employee turnover rate can reflect strong employee engagement and satisfaction, indicating effective retention strategies. A high turnover rate suggests possible engagement or satisfaction issues, highlighting a need to assess employee feedback and identify potential improvements in the workplace.

7. New hire turnover rate

This tracks the percentage of new hires who leave your organization within their first year, revealing potential issues in onboarding or job expectations.

Formula: (Number of new hires who left within the first year) ÷ (Total new hires) x 100

Insight: A low new hire turnover rate shows an effective onboarding and role-matching process, resulting in hires who are a good fit and committed. A high rate suggests misalignment between role expectations and reality or gaps in onboarding, indicating areas where adjustments can improve retention.

8. Voluntary vs. involuntary turnover

This metric breaks down the turnover rate by distinguishing between voluntary exits (resignations) and involuntary exits (terminations).

Formula: (Voluntary exits) ÷ (Total exits) x 100 and (Involuntary exits) ÷ (Total exits) x 100

Insight: High voluntary turnover indicates potential dissatisfaction among your employees with certain aspects of the workplace, such as culture or growth opportunities. High involuntary turnover indicates performance or disciplinary challenges, indicating a need for improvement in hiring practices or performance management.

9. Employee net promoter score (eNPS)

This score gauges employee satisfaction and loyalty by asking if employees would recommend your company as a workplace.

Formula: % Promoters - % Detractors (based on survey responses)

Insight: A high eNPS indicates strong employee loyalty and satisfaction, signaling a positive workplace culture and effective engagement strategies. A low score suggests room for improvement in culture, career development, or management practices to enhance employee commitment.

Performance HR metrics 

Employee performance directly impacts productivity, profitability, and overall success. Performance metrics allow you to monitor workforce productivity, assess the effectiveness of evaluation processes, and identify potential areas for development. Tracking these metrics supports a high-performance culture by encouraging accountability and growth.

10. Performance rating distribution

This HR metric evaluates the distribution of performance ratings across employees, identifying whether expectations and feedback remain consistent.

Formula: Distribution of employee performance ratings (e.g., % high, medium, and low performers)

Insight: A balanced distribution of performance ratings shows consistent and fair evaluations, promoting a high-performance culture. An imbalanced distribution may indicate leniency or inconsistency in evaluations, signaling a need for clearer performance criteria or training for evaluators.

11. Succession planning rate

This tracks how prepared your organization is to fill critical roles internally by developing potential leaders.

Formula: (Number of positions with a succession plan) ÷ (Total key positions) x 100

Insight: A high succession planning rate demonstrates readiness for internal promotions, ensuring stability and continuity in leadership roles. A low rate suggests a lack of focus on internal development, which may result in a greater dependency on external hires for key positions.

12. Absenteeism rate

This HR metric measures the rate of unplanned absences, helping your HR team understand attendance issues and workforce reliability.

Formula: (Total unplanned absence days) ÷ (Total workdays) x 100

Insight: Low absenteeism reflects strong employee engagement and satisfaction, suggesting a healthy and supportive workplace. High absenteeism may indicate issues such as low morale, stress, or health concerns, guiding HR to address underlying factors to improve attendance.

13. 360-degree feedback participation

This metric tracks the percentage of employees participating in comprehensive feedback programs that include input from managers, peers, and subordinates.

Formula: (Number of employees participating in feedback) ÷ (Total employees) x 100

Insight: High participation rates indicate a culture that values comprehensive feedback, supporting transparency and growth. Low participation may suggest discomfort with the feedback process or barriers to accessibility, highlighting a need for improved communication or incentives.

Growth and development HR metrics 

Fostering employee growth and development is essential for long-term success and employee satisfaction. Growth and development metrics can help you gauge your organization’s commitment to employee learning, advancement opportunities, and leadership development. These metrics can help your HR team ensure that employees have the support and resources needed to grow within the company.

14. Training completion rate

This metric measures the completion of assigned training programs, reflecting engagement in skill development and compliance training.

Formula: (Number of completed training sessions) ÷ (Total assigned sessions) x 100

Insight: A high training completion rate reflects engaged employees committed to learning and growth, supporting skill development and compliance. A low rate suggests training may not be accessible or engaging, signaling a need to adjust training methods or content.

15. Internal mobility rate

This HR metric measures the rate at which employees transition to different roles within your organization, indicating opportunities for career growth.

Formula: (Total internal transfers/promotions) ÷ (Total employees) x 100

Insight: High internal mobility shows that employees see clear career progression paths within your organization, supporting retention and engagement. A low rate suggests limited career development opportunities, indicating a need to enhance internal recruitment or development practices.

16. Employee learning hours

This tracks the total hours employees spend on learning and development, indicating your organization’s commitment to growth.

Formula: Total hours spent in learning programs per employee

Insight: High learning hours reflect a strong focus on skill enhancement and career development, suggesting that your organization values employee growth. Low learning hours may indicate a lack of development opportunities or engagement, showing areas where increased support could boost learning outcomes.

17. Leadership development participation

This metric measures participation in leadership development programs, which are essential for succession planning and retaining top talent.

Formula: (Number of employees in leadership programs) ÷ (Total eligible employees) x 100

Insight: High participation in leadership development indicates a proactive approach to succession planning and retaining top talent. Low participation rates suggest limited interest or accessibility issues, indicating that program content or eligibility requirements may need reevaluation.

Other key HR metrics to track

In addition to recruitment, retention, performance, and development, there are several other HR metrics that matter for maintaining an equitable, inclusive, and financially sound workplace. These HR metrics provide insight into diversity, inclusion, pay equity, and cost efficiency, helping HR professionals address your broader organizational goals and support a healthy workplace culture.

18. Gender pay gap

This tracks differences in average pay between genders, helping your organization monitor pay equity.

Formula: (Median male salary - Median female salary) ÷ Median male salary x 100

Insight: A low or non-existent gender pay gap indicates fair pay practices, supporting workplace equity and inclusivity. A high pay gap signals potential issues in compensation practices, suggesting that adjustments may be necessary to ensure fair and equitable pay across genders.

19. New hire diversity

This measures the diversity within recent hires, highlighting whether your recruitment efforts are inclusive.

Formula: Diversity percentage of new hires by category (e.g., gender, race, ethnicity)

Insight: High new hire diversity reflects an inclusive hiring process that attracts talent from various backgrounds, promoting a diverse workplace. Low diversity in new hires suggests that recruitment channels or practices may need adjustment to reach a wider candidate pool.

20. Cost per employee

This HR metric tracks the average cost of employment, including wages, benefits, and other HR expenses, to measure resource allocation.

Formula: (Total HR expenses) ÷ (Total employees)

Insight: Low cost per employee shows efficient resource allocation, suggesting that your HR budgets align well with cost-effectiveness goals. High cost per employee suggests potential overspending, revealing areas where adjustments could improve financial efficiency.

How to use HR metrics

Effectively using HR metrics involves structured data collection, analysis, and implementation. By following the steps below, you can apply insights to improve the HR function and support organizational goals:

Step 1. Collect and interpret the results 

Collect data from relevant HR KPIs that align with your organization’s goals. For example, if employee retention is a priority, track metrics like employee turnover rate, employee satisfaction scores, and exit interview feedback.

Example: The human resources team at a tech company notices turnover is the highest among software engineers. By collecting turnover rates specifically within the engineering department, they can identify trends or patterns to address this issue.

Best practice: Standardize data collection to ensure accuracy. For example, use the same survey questions or evaluation criteria every time you measure employee satisfaction, so your results are comparable.

Step 2. Identify actionable insights

Look for patterns that reveal specific, actionable insights. For instance, if turnover is high in a department, analyze the feedback from exit interviews to identify common reasons for departure.

Example: After analyzing data, the HR team at the tech company discovers that a lack of career growth opportunities is a major reason for the high turnover among engineers. This insight highlights a need to improve internal mobility programs or career development resources.

Best practice: Prioritize insights that directly support HR and business goals, such as enhancing employee engagement or reducing turnover. Collaborate with department heads to validate findings and brainstorm potential solutions.

Step 3. Implement changes based on insights

Turn insights into specific actions. For instance, if data shows that lack of career advancement is driving turnover, consider launching a career development program or mentorship initiative within the engineering department.

Example: The HR team at the tech company introduces a structured mentorship program and internal job board to provide engineers with career advancement options within the company. They set a goal to reduce the engineering department’s turnover rate by 15% over the next year.

Best practice: Develop a clear plan with actionable steps, responsible parties, and timelines. Set measurable objectives like “increase internal job applications by 20%,” so you can track progress.

Step 4. Monitor outcomes and adjust as needed

Track the results of your initiatives to see if they achieve the desired outcomes. For example, if the new career development program doesn't lower turnover, analyze feedback and make necessary adjustments.

Example: Three months after launching the mentorship program, the tech company's HR team collects feedback from participants and finds that while engagement has improved, engineers want more formalized career progression paths. In response, the HR team adds quarterly workshops on skill-building and leadership.

Best practice: Regularly track HR KPIs to measure success. Schedule periodic reviews to adjust strategies, like introducing additional training if feedback suggests it would further enhance career satisfaction.

Step 5. Report and communicate results to stakeholders

Share findings and progress with leadership and relevant teams, focusing on the HR metrics’ alignment with business objectives. Show how changes are impacting metrics, like turnover or employee engagement.

Example: At the end of the year, the tech company's HR team presents to executives and department heads, showing that turnover in engineering dropped by 10% because of the new mentorship and development programs. They recommend expanding similar initiatives to other departments based on positive results.

Best practice: Tailor your reports to your audience, focusing on key metrics and their business impact. Use visuals to present the data clearly and establish a regular reporting schedule to keep stakeholders updated.

The best HR analytics software to track important metrics

Rippling's all-in-one HR software empowers you to gather and track essential HR metrics, enabling data-driven decision-making. By consolidating all employee data across HR, IT, Spend, and third-party systems into one place, Rippling provides a single source of truth for effective and efficient human resources management.

Rippling’s platform combines time and attendance capabilities with robust people analytics and survey tools to provide a holistic view of workforce data. The time and attendance features allow you to precisely track employee hours, making it easier to manage absenteeism and monitor trends, while also ensuring compliance with local labor regulations.

Rippling’s survey capabilities add depth to its analytics by enabling HR departments to create and distribute custom employee engagement and satisfaction surveys. These surveys help gather direct feedback on workplace experiences, team dynamics, and overall employee satisfaction, offering actionable insights into areas like morale, engagement, and the causes behind absenteeism and turnover. 

Through Rippling’s analytics dashboard, you can seamlessly view and analyze survey results alongside other key metrics, including revenue per employee, creating a data-driven approach to managing human capital.

Rippling's comprehensive platform streamlines various HR functions, including payroll, benefits administration, and compliance management. If your business is aiming to leverage HR metrics and analytics for strategic decision-making, Rippling offers a complete and unified solution. 

HR metrics FAQs

What do common HR metrics include?

Common HR metrics cover a range of data points that offer insight into various aspects of human resources and organizational performance. Core metrics often include revenue per employee, which measures the financial impact of each employee on the business; absenteeism, tracking the frequency of unplanned leave to identify potential areas for improvement; and employee net promoter score (eNPS), which gauges employee satisfaction and likelihood to recommend the organization.

Other common metrics involve people analytics in areas like recruiting effectiveness, employee turnover, and productivity. These data points together help HR teams monitor the health of the workforce and align organizational goals with human capital strategies.

How often should you track HR metrics?

The frequency of tracking HR metrics depends on your HR department’s goals and the specific metrics in question. Generally, metrics tied to organizational effectiveness and strategic goals, such as employee engagement or turnover rates, benefit from quarterly reviews. Other metrics, like revenue per employee, you may track monthly to capture more immediate shifts.

Frequent tracking enables your HR department to respond proactively, ensuring that data-driven insights align with organizational objectives and support strategic workforce planning.

Is gathering HR metric data hard?

Gathering HR metric data can be challenging, especially without the right tools, as it involves accurately tracking, compiling, and analyzing data from various sources. However, dedicated HR software, like Rippling, can simplify this process by consolidating data from multiple functions, allowing your HR department to measure key metrics, like employee engagement, turnover, and productivity, with ease. 

The right HR software enhances effectiveness in data gathering and also offers analytics tools that make interpreting and acting on insights more manageable, regardless of the metric’s complexity.

What are people analytics?

People analytics refers to the practice of collecting and analyzing data related to your workforce to enhance employee experience, productivity, and overall human resources efficiency. By leveraging people analytics, your HR team can improve human capital management by identifying trends and making informed decisions around recruitment, engagement, and retention. 

These analytics allow you to measure employee performance and satisfaction, assess productivity patterns, and make targeted adjustments that drive organizational success.

This blog is based on information available to Rippling as of November 11, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.