The Power of HR Metrics: How Data Drives Your People Strategy Forward
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HR Metrics, hr kpi, key hr, hr data, human resource

The Power of HR Metrics: How Data Drives Your People Strategy Forward

Do you want to track the performance of your HR initiatives? Human resources metrics are measurements used to assess the effectiveness of various HR activities in an organisation. These HR metrics help professionals to analyse their policies and practices, identify areas for improvement, and make data-driven decisions.

Moreover, HR KPI analytics provide valuable insights into the overall success of an organisation. By analysing these details, organisations can identify areas where they need to focus their efforts to achieve their strategic goals. Through better people analytics, businesses boost their work productivity and business efficiency.

Benefits of HR metrics

HR metrics refer to the collection, analysis, and interpretation of data related to various aspects of HR functions. It includes recruitment, retention, employee engagement, training, and performance management. Let’s discuss several benefits of using HR metrics, including;

Better decision-making

These metrics provide accurate and reliable data that helps HR professionals make informed decisions. It can provide data-driven insights that can support decision-making. For instance, by analysing data on employee turnover, HR can determine why employees are leaving and develop strategies to improve retention.

Similarly, an organisation may use HR metrics to track salary competitiveness and employee benefits utilisation rates. Based on this data, the organisation can make informed decisions about how to adjust its compensation and benefits programs to attract and retain top talent.

Improves workforce planning

HR metrics play a crucial role in improving workforce planning by aligning it with business strategy. Using these insights, HR managers can identify gaps in the current workforce in terms of skills, experience, and diversity.

For instance, through the data on employee demographics, turnover, and performance, HR can determine the areas where the organisation needs to recruit, train, or develop its employees to meet its strategic goals.

Measures employee satisfaction

Human resource metrics boost employee engagement by analysing how employees feel about their work, their managers, and the organisation as a whole. It helps the HR team to measure employee satisfaction with various aspects of their work, such as compensation, benefits, work-life balance, and career development. By collecting this data, HR can identify areas where employees are dissatisfied and take steps to address these issues.

Enhances employee productivity

By tracking HR KPIs over time, organisations can measure their progress towards improving work productivity. This can help them identify what strategies are working and what areas need further attention.

For example, organisations can invest in their employees by providing training and participation programs. So, by focusing on employee development, organisations create a culture of productivity and success.

Key HR Metrics to Track

Let’s discuss the five key HR metrics in the following.

Turnover rate

The turnover ratio refers to the percentage of employees who leave the organisation. A high turnover rate is significant in debunking organisational issues. It can indicate problems with recruitment, retention, or engagement, which can negatively impact the organisation’s productivity.

– How to measure the Turnover ratio

It is measured by dividing the number of employees who left the organisation by the average number of employees and then multiplying it by 100.

By tracking turnover rates, organisations can identify areas where retention efforts may be needed and develop strategies to reduce turnover.


Time-to-fill measures the average amount of time it takes to fill a vacant position. A long time to fill can indicate recruitment challenges or a mismatch between job requirements and candidate qualifications. It can delay important projects or strain existing employees’ workloads.

– How to measure time to fill

To calculate the time to hire for each open position, you need to subtract the date the position was posted from the date the job offer was accepted.

Organisations measure time-to-fill metrics to ensure that their recruitment processes can be streamlined and optimised to reduce this timeline.

Employee engagement score

The employee engagement score measures employee satisfaction and commitment to the organisation. For instance, High engagement can indicate a positive work culture, while low engagement can indicate issues with leadership, communication, or workload.

– How to measure Employee engagement score

To measure these metrics, you need to choose an employee engagement survey that aligns with your organisation’s goals and objectives. Then, calculate the overall engagement score by adding up the responses to the questions and dividing by the total number of questions answered.

Employee engagement can also impact productivity, employee retention, and customer satisfaction. By using employee engagement scores, organisations can identify areas where they can improve employee engagement. They develop effective strategies to increase engagement levels.


The cost-per-hire metric measures the total cost of recruitment divided by the number of hires. This metric can help organisations assess the effectiveness of their recruitment strategies and identify opportunities to reduce costs.

– How to measure cost per hire

You need to divide the total costs by the number of hires to calculate the cost per hire.

So, by tracking cost-per-hire, organisations make sure that their recruitment processes can be optimised to reduce costs. For example, they can invest in more cost-effective recruitment channels or streamline the recruitment process to mitigate the cost per hire. Research shows that 51% of companies look to AI to reduce cost per hire.

Training participation rate

The training participation rate measures the percentage of employees who participate in training and development programs. It is an important metric for organisations because it provides insight into the level of engagement and employee performance rate.

– How to measure training participation rate

Divide the number of employees who participated by the total number of employees who were eligible to participate and multiply by 100 to get the training participation rate as a percentage.

This measurement helps organisations identify which employees may need additional support to develop new skills or improve their progress.

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Four Levels of HR Metrics

Level 1: Descriptive analytics

Descriptive analytics is the process of analysing historical data to gain insights into past events and trends. This level of HR KPI is related to the data that is already present. It helps HR managers to understand the current state of HR operations and to identify areas for improvement.

For example, if you want to acknowledge the reasons for employee turnover, you need to look into the past for the causes of their departure.

Level 2: Diagnostic Analytics

Diagnostic analytics takes the descriptive phase to the next level. It provides a possible explanation of the data revealed. Through this HR KPI level, you can get into the optimal causes for certain HR activities.

For instance, if your team members don’t accomplish their tasks within their assigned deadlines, you need to get into the root cause of employee behaviour. The reason may be the lack of milestones, work breakdown, communication or clarity. So, this analysis tells you the significant causes to improve the HR issues beforehand.

Level 3: Predictive Analytics

This level refers to forecasting the business’s future events on the basis of past data analysis. It helps organisations improve workplace growth by reducing failure chances. Research shows that 44% of companies use workforce data to predict business performance.

The success of the business relies on the right prediction of HR. If the HR team use predictive analytics effectively, they can take prudent steps to increase the probability of future success.

For example, using predictive analysis, the organisation predict employee performance. By analysing past performance data, HR managers can develop a predictive model to identify factors that are strongly associated with high levels of performance. These factors may include things like prior work experience, education, training, or job-related skills. So, people analytics help to achieve an equitable workplace.

Level 4: Prescriptive Analytics

Prescriptive analytics in HR refers to the use of data and advanced analytics to provide insights and recommendations to improve HR processes and decision-making. It involves using the information to develop strategies and make decisions that optimise HR operations and improve organisational performance.

For example, businesses use prescriptive analytics in HR to determine the optimal recruitment sources for new employees. This involves simulating different recruitment strategies, such as using job boards, social media, or employee referrals, and analysing the results to determine which strategy is most effective.

How to implement HR metrics

Implementing HR metrics requires a commitment to data-driven decision-making and a willingness to invest in the processes. You need to follow certain steps to opt for HR metrics in your workplace.

  • To Implement these metrics effectively, you need to Identify the HR metrics that are most relevant to your organisation’s goals and objectives.
  • Develop a clear plan for collecting and analysing HR data. You need to ensure that HR data is accurate, complete, and consistent.
  • Use these metrics to track progress towards organisational goals.
  • Communicate human resource metrics effectively to stakeholders in a way that is easy to understand and interpret.
  • Continuously evaluate and improve metrics over time.


Common Pitfalls to avoid

Selecting HR metrics can be challenging, and there are several common pitfalls that organisations may encounter.

  • Organisations may focus on metrics that are not relevant to their goals and objectives. So, you need to avoid wrong insights that do not align with your business goals.
  • Poor data quality can undermine the effectiveness of these metrics. It can lead to flawed analyses and incorrect conclusions.
  • Failure to involve key stakeholders, such as managers or employees, in the development and implementation of human resource metrics can lead to resistance.
  • HR metrics should be regularly reviewed and updated to ensure they remain relevant and useful. Failure to adjust metrics as organisational goals and objectives change can result in outdated or irrelevant data.
  • HR metrics should be simple. Overcomplicating metrics can make it difficult for stakeholders to understand the insights. It may lead to misinterpretation of the data.


By avoiding these common pitfalls, organisations can leverage HR metrics to drive more effective HR strategies and improve overall organisational performance.

Tips to ensure that HR metrics drive positive change

Focus on relevant metrics

You need to focus on HR metrics that are relevant to the organisation’s operations and workforce. Choose metrics that provide actionable insights and help identify areas for improvement.

Set benchmarks

Set benchmarks for HR metrics to measure progress over time. For this purpose, you can use industry benchmarks, historical data, or internal benchmarks to evaluate performance and identify areas for improvement.

Communicate HR metrics

Communicate HR metrics effectively to stakeholders, including senior management, employees, and external partners. This helps in creating awareness, setting expectations, and garnering support for HR initiatives.

Use HR metrics to drive change

Use HR metrics to drive positive change within the organisation. Identify areas for improvement, and opt for initiatives to achieve the desired outcomes.

Continuously monitor and evaluate

Evaluate HR metrics to ensure that they generate productivity. Adjust metrics, goals, and initiatives as needed to ensure continuous improvement.

Real-World Examples of HR metrics in Action

Predicting Employee Attrition at Experion

Experion is a business services company that faces employee attrition. The turnover rate was more than they intended it to be. For this purpose, the company devised a predictive model to predict adequate flight risk. This HR metrics analytic integrated many attributes like team size, length of commute, performance management levels and more.

It helped the organisation to identify the turnover triggers. These insights allowed the company to reduce employee attrition significantly over the past some months with increased savings.

Employee Engagement at Clarks

Clarks, a British shoe manufacturer and retailer company, was looking to maximise employee engagement at their store. HR analytics uses over 400 data points to understand the relationship between employee engagement and organisational performance. Clarks implemented effective strategies and development programs to drive business productivity.

The company drafted a schema to design high-performing stores. It also initiated a business initiative and added an employee engagement toolkit for managers. After opting for these tactics, the company reported significant positive changes.


In short, HR metrics play a crucial role in shaping an organisation’s strategy and decision-making. By regularly tracking and analysing HR metrics, organisations can optimise their HR function and improve employee engagement and retention. 

Thus, they can ultimately drive better business outcomes. If you are looking for a reliable platform to monitor your HR initiatives, try EmployeeConnect. This cloud base software allows you to centralise the employee data and streamline your HR strategy. So, what makes you wait? Get started with us.

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Byron Conway

Content Coordinator at EmployeeConnect