There are a number of HR analytics that a business can measure, but the right ones for you will depend on what you’re wanting to learn and accomplish. The key HR analytics are ones that are typically measured by most organized businesses looking to keep track of their people data. Here is an overview of those key metrics that make a good starting point for most businesses to launch an HR analytics program.
1. Revenue per Employee
Revenue per employee measures how much money the business is bringing in for every employee it has on staff and is paying expenses, such as salary and benefits, for. It is calculated by dividing a company’s revenue by the total number of employees in the company. Businesses love to track this because it provides a way to see how efficient businesses are at generating revenue for each new hire.
Example: If a business has 100 employees and brings in $10 million in revenue, its revenue per employee would be $100,000.
2. Time To Fill
The time to fill metric measures how long it takes to fill an open position at the company. It is calculated by counting the number of days from posting the job to someone accepting an offer. This gives good insight into how efficient the hiring team is at finding good candidates and moving them through the hiring process.
Example: If a company posts a job on March 1 and completes its interviewing process, makes an offer, and gets that offer accepted on April 20, then the time to hire would be 51 days.
3. Voluntary and Involuntary Turnover Rates
These rates measure the percentage of employees who end up leaving the company. The voluntary rate calculates the percentage of employees who decided to leave the company while the involuntary rate calculates the percentage of employees who end up getting fired.
While the voluntary rate measures how well the company is at retaining employees, the involuntary rate measures how well it is at hiring the right people and managing them efficiently. Both are calculated by dividing the number of employees who fall into each category by the total number of employees in the organization.
Example: If 10 employees were fired in the last year, out of the 100 total employees the company had, then the involuntary turnover rate would be 10% of employees.
4. Offer Acceptance Rate
The offer acceptance rate is another hiring metric that measures how well the hiring team is at convincing the people they want to take the job. If a company is making offers to people who are declining those offers at a high rate, then the hiring process likely needs to be adjusted to move candidates through the hiring pipeline who are more interested in joining the company. It is calculated by dividing the number of accepted formal job offers by the total number of job offers made.
Example: If the hiring team has received 10 formal job offer acceptances this year, out of 20 given out, then the offer acceptance rate would be 50%.
5. Retention Rate
In contrast to the turnover rate above, it can be important to see how well the business does at keeping employees working for the business. This can be measured company-wide or on a per-manager level. To calculate the retention rate, you can divide the total number of employees who decided to stay employed over a given time period by the total number of employees over that same time period.
Example: If a business had 100 employees in the last year and 85 decided to remain employed, the retention rate would be 85%.
6. Absence Rate
The absence rate is the total number of days an employee is absent from work, not including approved time off such as vacation, over a specific period of time. This is also referred to as absenteeism and is important to measure in positions where individuals call out of work at a high rate, such as retail businesses. It is calculated by dividing the number of days worked by the total number of days that the employee could have worked over a specific period of time.
Example: When measuring the absence rate for June, let’s say there are 20 possible work days. Our worker, John, worked 14 of those days and was on vacation for another three days. This means he worked 14 out of a possible 17 days. That means he worked about 82% of the time and it gives him an absence rate of about 18%.
