Effective HR management relies on data-driven decision-making. By tracking HR metrics like turnover rates and absenteeism, teams can gain valuable insight into workforce health and employee engagement. This enables businesses to identify issues earlier and create targeted solutions that drive success.
This guide covers what businesses need to know about the most critical HR metrics, why they're so important, and how to design measurement systems that drive organizational improvements.
What are HR metrics?
HR metrics are key data points that measure workforce health and performance. Some companies also refer to them — and the process of tracking them — as people analytics.
For HR departments, these numbers provide valuable insights ranging from employee satisfaction to
turnover rate. These can help uncover current problems and emerging trends while showing how well HR supports company goals.
Most companies focus on four key areas:
Recruitment metrics assess the hiring process — factors such as cost-per-hire and time-to-fill — to track how long positions remain open and the expenses associated with acquiring new employees.
Performance metrics evaluate how well employees contribute to company success — for example, revenue per employee and productivity levels.
Employee experience metrics capture feedback directly from employees about job satisfaction and engagement levels.
Retention metrics track patterns in employee turnover, distinguishing between voluntary departures and other types of turnover rates.
HR metrics work best when they’re aligned to concrete business outcomes. By turning people analytics into key performance indicators (KPIs) that track progress toward specific goals, the numbers show a direct link between workforce programs and business results. This helps HR departments make informed choices about employee programs.
Why are HR metrics important?
Here are a few more reasons why HR analytics are important to track:
Improves and justifies company benefits: Benefits and wellness programs offer a perfect example of HR metrics in action. Instead of guessing which programs work best, companies track specific HR KPIs that may lag behind others. For example, a manufacturing company might discover that its
wellness programs lead to lower absenteeism and higher employee satisfaction scores. These metrics justify program costs while showing which initiatives tangibly improve
employee well-being.
Avoids workforce challenges: Tracking HR metrics also predicts and prevents workforce challenges. For instance, when HR monitors turnover patterns alongside employee satisfaction data, they might catch early warning signs of growing problems. This insight lets companies take action before losing valued team members.
Supports long-term planning: By analyzing trends in retention rates, new hire success, and team performance, HR departments can better predict future workforce needs. Companies can make smarter decisions about everything from training programs to hiring plans. The result is better employee experiences and stronger business outcomes that leadership can clearly measure and track.
10 top HR metrics that matter
While business needs may vary, these 10 HR metric examples consistently provide valuable insights:
1. Turnover rate
Employee turnover is one of the most important metrics HR teams can monitor. It directly impacts productivity, team morale, and your bottom line—replacing an employee can cost anywhere from
1.5 to 2 times their annual salary. Tracking your turnover rate, including both voluntary and involuntary departures, helps identify trends and areas for improvement in your employee experience.
One common driver of voluntary turnover is financial stress. Employees facing financial pressure may leave for roles that offer even slightly higher pay or better benefits. Financial wellness tools like EarnIn can help address this challenge by giving employees access to
on-demand pay and additional tools like
Credit Monitoring and Bill Reminders
to help them stay in control of their finances and build better habits. With EarnIn, employees can access up to $150 per day, with a maximum of $750 per pay period,
and get paid in minutes for just $2.99 per transfer
—offering flexibility when it matters most.
2. Employee satisfaction score
This captures how workers feel about their jobs, benefits, and workplace culture. It also gauges whether employees would recommend their company as a great place to work. Companies typically measure employee satisfaction using regular surveys and feedback programs.
3. Employee engagement score
Related to employee satisfaction, employee engagement measures how motivated, committed, and connected workers feel to their work and their company's success. Employers often measure this using specialized surveys to assess factors like work relationships, growth opportunities, and alignment with company values and culture.
4. Benefit utilization rate
This shows the percentage of employees who actively use available benefits programs. Low utilization might mean benefits don't align with employee needs, aren’t effectively communicated, or are difficult to access. HR departments use this data to adjust their benefits packages and improve awareness and communication about programs.
5. Time to hire
This metric tracks how long it takes to fill open positions, starting from the date a role opens to the moment a candidate accepts an offer. Long average hiring times mean hiring inefficiencies, lost productivity per employee, and an increased workload for existing teams.
6. Cost per hire
Understanding the average cost of each new hire helps companies budget effectively and spot inefficiencies in recruitment processes. Cost per hire includes everything from advertising and recruiter fees to onboarding expenses. Some estimates suggest the
average cost to hire is $4,700, though this varies significantly by industry, role, and company size.
7. Quality of hire
Businesses typically measure quality of hire using a combination of factors like employee retention, employee engagement, and performance ratings.
8. Revenue per employee
This divides total revenue by the number of employees. While target numbers vary by industry, tracking this metric over time helps companies identify positive and negative trends, and make smarter staffing decisions.
9. Absenteeism rate
High absenteeism can signal deeper issues with employee engagement or workplace culture. This metric helps HR departments spot patterns that might indicate burnout, leadership problems, or other issues that need addressing.
10. Retention Rate
This measures the percentage of employees who stay with a company over a specific period, providing insight into workforce stability and overall job satisfaction. This helps assess the effectiveness of engagement strategies, compensation, and workplace culture.
How to establish and track KPIs for HR
Successful HR metric tracking programs rely on clear foundations and systematic implementation. Follow these key steps:
Choose metrics that matter. Strong people analytics starts with choosing the right metrics. That means focusing on HR KPIs that directly align with business goals and provide actionable insights. For example, a company looking to increase their retention rate might prioritize metrics related to employee turnover and new hire success rates, and engagement scores that identify trends and drive improvements.
Use the right tools. Tracking HR metrics requires the right tools and processes. Many teams start with simple spreadsheets, but dedicated people analytics software typically offers better accuracy and deeper insights — especially for large companies. These platforms track everything from absenteeism patterns to employee satisfaction trends.
Review and adjust regularly. Setting a review schedule helps HR professionals stay on track. Find out if initiatives are paying off, adjust KPIs based on changing business needs, and take action according to the data.
Take action to improve HR metrics with EarnIn
Tracking HR metrics like turnover, engagement, and productivity gives companies a clearer picture of what's working—and what’s not. But metrics only matter if they lead to action. One of the most effective ways to move the needle on these KPIs is by addressing the root causes behind them—like employee financial stress.
As a financial wellness benefit, EarnIn gives employees flexible access to their earned wages and tools to build healthier financial habits. With EarnIn’s on-demand pay solution, employees can access up to $150 per day, with a maximum of $750 between paydays – often using it to cover everyday essentials like gas and groceries. Employees can choose to access their money in minutes starting at just $2.99 per transfer or for free via ACH.
When employees feel more financially secure, companies often see improved engagement, reduced turnover, and a more resilient workforce. With no cost or payroll integration required, EarnIn is a simple, effective way to turn HR insights into real impact.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
EarnIn is a financial technology company not a bank. Banking Services are provided by Evolve Bank & Trust or Lead Bank, both member FDIC. The FDIC provides deposit insurance to protect your money in the event of a bank failure. More details about deposit insurance here. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don't be surprised if your lender uses a score that's different from your VantageScore 3.0.
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