Employees are the potential and strength of an organization, as they let it grow and achieve its business goals. However, behind every employee lies a wealth of data that can be analyzed to improve ongoing processes. Research reveals that data-driven companies achieve better results because they detect problems earlier, control the process of accomplishing their goals, and optimize costs more effectively. What is HR analytics? What HR metrics do you need to track? In this blog post, we will dive deeper into HR analytics and explore some of the key HR metrics that organizations should be watching to optimize their workforce and drive business success. Read on to find out more.

7 essential HR metrics – table of contents:

  1. Time to hire
  2. Acceptance rate
  3. Cost per hire
  4. Turnover rate
  5. Retention rate
  6. Employee performance
  7. Revenue per employee
  8. Summary

Time to hire

Time to hire is a metric that measures the average time taken by a company to acquire a new employee, starting from the publication of the job posting on the company’s website, social media, or a recruitment portal until the candidate accepts the job offer. Primarily, time to hire allows a company to evaluate the attractiveness of the job offer and whether suitable candidates are available in the job market.This metric provides crucial insights into the effectiveness of the recruitment process, and helps assess the efficiency of the recruitment team.

HR metric

Acceptance rate

The acceptance rate shows the proportion of new hires within a specific timeframe, such as one year, compared to the total number of employees or their average number during that period. It can also be used to check the percentage of accepted offers in relation to current job openings. In this way, it’s possible to assess whether a company’s offer meets the interest of potential candidates, and draw conclusions regarding specific elements of the offer, the recruitment process, and the company’s external image.

It’s often valuable to track the so-called new-hire turnover, which indicates the number of employees who leave within their first year of employment out of all those hired during a particular period. As the costs of recruiting and training a new employee can be relatively high, it’s worth looking into the reasons for early departures.

Cost per hire

To calculate the cost per hire, you need to add up all the expenses associated with the hiring process (e.g., job postings, advertising, travel expenses, referral bonuses, background checks), and then divide that total by the number of hires made during a specific period of time. A high cost per hire may indicate that the hiring process is inefficient and needs to be optimized. Expenses can be monitored in real time with project and team management tools, such as Firmbee. Costs and revenues can be linked to specific projects, allowing you to track whether the budget has been exceeded.

hr metric

Turnover rate

To check the turnover rate, you need to add up the number of people who left the company during a specific period, then divide it by the average number of employees in that period and multiply by 100%. A high percentage score should raise alarm for HR staff, as it may indicate underlying issues within the company, such as conflicts, a poor organizational culture, or general dissatisfaction with employment conditions. When analyzing these scores, it’s important to examine the percentage of voluntary departures and layoffs separately to gain a clear understanding of the situation. Otherwise, the results may be skewed and not provide an accurate picture of the problem.

Retention rate

Retention rate is the percentage of employees who remain employed by a company over a certain period of time. A high retention rate indicates that employees are generally satisfied with their job and the company, while a low retention rate may suggest that the company is struggling to keep its workforce happy and engaged. Organizations strive to maintain high retention rates, especially for people with above-average skills.

Employee performance

Calculating this HR metric can be challenging because performance may be interpreted differently depending on the company, position, or industry. However, it is worth calculating it because high employee performance usually leads to better business results. To review and measure employee performance, it’s best to use one of the employee rating scales.

Revenue per employee

This HR metric can be calculated by dividing the company’s total revenue by the total number of employees (e.g. after a calendar year). This way, you can assess its efficiency in terms of the revenue generated per employee. The lower the turnover rate, the better ROI (return on investment) the organization will achieve.


In the modern business world, HR analytics plays a vital role in helping companies and HR departments achieve their goals. It involves conducting ongoing research, analyzing data, and drawing conclusions to make informed decisions. Implementing this approach is essential for all companies, regardless of their size, number of employees, or industry. Regularly measuring data, including key HR metrics, enables organizations to identify areas that require improvement, which is a crucial step towards achieving success.

You’ve just read about the most important HR metrics you should measure and track. You might also like: What does an HR coordinator do?

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Leveraging HR analytics. 7 essential HR metrics to improve your workforce management nicole mankin avatar 1background

Author: Nicole Mankin

HR manager with an excellent ability to build a positive atmosphere and create a valuable environment for employees. She loves to see the potential of talented people and mobilize them to develop.