What are HR metrics and what can they be used to examine?

Many HR metrics or KPIs have similar definitions and can be combined to create a broader picture of employee activity. For instance, employee engagement and productivity often go hand in hand. It is a good idea to look at how metrics in HR relate to each other, as drawing on multiple data points in this way can help employers find out not only what strengths and weaknesses a team has but why. 

HR metrics can reveal specific areas for improvement and how to troubleshoot them. Because these can shift over time – like when a company is demonstrating economic growth – it is a good idea to keep a record of these changes on a weekly, monthly and/or yearly basis.

HR metrics can also help you to work with the employee data that an HR team already has. When you know how to work with this pre-existing data, you can gain insights that can help you develop strategies to help build on current team strengths and weaknesses. Below, we will look at some of the key HR metrics or KPIs for employers and how they can aid your strategy.

Employee engagement

One of the most crucial HR metrics is employee engagement as it reflects how productive and motivated employees are in their current workplace environment. It is often tracked using what is known as an Employee Net Promoter Score (eNPS). This score indicates how likely employees are to recommend a workplace to either their peers or family members. 

Employee engagement is a useful metric to keep on top of as it helps employers to track employee engagement over time. This means that if businesses find their employees become less productive over time, they can look at why this is the case, perhaps via employee surveys or satisfaction polls. 

The conditions that employees work best in might change over time. Employees might be looking for more flexible working options, such as remote working. These are increasingly popular options since the beginning of the COVID-19 pandemic.

Therefore, employee engagement is a great metric to track as it helps businesses adapt to employee needs. Although this might be costly, it can be useful in the long run as reacting to employee engagement can help to improve retention and reduce employee turnover. 

Although it is tied in with productivity, employee engagement also looks at how committed an employee is to the goals of their company and whether their personal and professional aspirations align with these goals. 

Employee productivity

Because the needs of employees are rarely static and shift with changes in personal circumstances, there is a good chance that many of a business’s employees will be working remotely from time to time, for example as part of a work-from-home scheme. When there are big changes to an employee’s working environment, it is useful to be able to keep track of their performance. 

Workplace change might not always have a negative impact on employee productivity. It can also be helpful for employers to find out whether a change in an employee’s working environment has had a knock-on benefit to their productivity levels. Then, employers can use this information to aid any further shifts in the workplace. 

However, it also helps to understand any issues that might come with workplace changes, so that they can be resolved. What is more, measuring employee productivity might show a business how many hours per day their employees can be productive for. This might be a useful metric to look at if a business is considering introducing a four-day week, for example. 

There is no one solution to defining performance and productivity. Therefore, it is useful for employers to figure out what this means to their company. Some ways of measuring employee productivity include:

• Whether the employee is meeting daily, weekly, monthly or yearly targets;
• The amount of work they are able to produce within a given timeframe;
• The quality of the work they are able to produce within a given timeframe;
• What strategies an employee is using to improve efficiency;
• Whether the employee has any room to grow in their potential.

There are a few different ways to measure this metric, such as via one-on-one performance reviews between an employee and their line manager. There are other ways that HR departments can gather information on an employee’s performance that can help them to create an assessment. This might include employee surveys or polls via email. Another option could be 360-degree feedback.

Employee overtime

This HR metric or KPI can also provide insights into employee workloads. Employers can draw on this metric to help uncover a broad range of information including:

• Whether a business is receiving a temporary influx of new customers, or whether a business is growing;
• Whether a business is understaffed;
• Whether workflows aren’t efficient enough.

If you look at this metric in tandem with absenteeism and employee engagement metrics, you might be able to get an indication of whether staff are perhaps currently struggling with their workload. This enables a business to look at which changes might be helpful, such as hiring more staff or distributing workloads differently across a team.

Absenteeism

In order to work out the rates of absenteeism in the workplace, employers can look at the percentage of days that have been taken off among employees throughout the workforce. Absenteeism as an HR metric or KPI can be combined with other metrics like employee engagement, overtime and productivity to provide insight into what some of the reasons for absenteeism might be.

For instance, a team that is showing low motivation levels and a high workload might also demonstrate greater absenteeism . This additional information also helps give you the tools to figure out the correct strategy to deal with absenteeism – looking at your team’s needs and finding out why they are perhaps less motivated to show up than before. 

Recruitment

Not only are HR metrics useful when it comes to looking at your current team and employee retention, they can also help with recruitment processes. Recruitment conversion is one such metric that measures how many applicants are successfully turned into hires. Recruitment conversion can show whether your talent acquisition manager or recruitment team are finding appropriate candidates during the recruitment process.

Other recruitment-focused metrics to consider include the demographics of new recruits, the time between posting a job and hiring a candidate, how many employees are part of your company and how long the onboarding process takes. All of these points can help you to streamline your recruitment and onboarding process as well, particularly in terms of sourcing the right candidates and creating a faster recruitment turnaround. 

Combining recruitment metrics with other KPIs

By combining recruitment metrics with other KPIs like talent retention and employee engagement, businesses can find out whether their recruitment and onboarding processes are as effective as they could be.

If your HR team are hiring lots of new initially engaged staff but your business is failing to retain them, this could indicate issues with onboarding, or the possibility that the recruitment team is not hiring candidates that are the right cultural fit for your business.

It might also indicate that your perk offerings or salaries are not competitive compared with other employers, which can be especially worth considering if looking to retain talented employees. 

Employee retention

Employee retention is a useful metric for uncovering how long your employees are staying with your company. This might include your overall retention rate. In order to get this figure, try choosing a length of time, and divide the number of employees at the end of this period by the total number of staff members present at the beginning of the period of time, then multiply the result by 100.