The 10 Essential HR Metrics You Absolutely Need to Watch
HR metrics help you track key HR and recruitment activities to improve employee experience and program effectiveness. Learn more.

Have you ever wondered what successful businesses have in common? They use people data to analyze business performance and define goals. HR metrics are one of the ways to do this. Human resources are, after all, an integral part of a company’s success.
People strategies, workforce analytics, and HR metrics all help you work toward achieving your business goals.
It doesn’t matter if you have 10 or 1,000 employees. The sooner you start watching your HR metrics, the better. So let’s see why these metrics are so important and how to use them.
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Why do HR metrics matter?
HR metrics are data points that allow you to track key human resource and recruitment activities like employee performance, retention, compensation, engagement, cost-per-hire, time-to-hire, and more. This lets companies keep a close eye on how each of their programs are functioning so that they can make adjustments if needed.
In other words, HR metrics are a way of assessing a particular area within your business. They can also help you better face unforeseen events.
If the past few years have taught us anything, it is that the way we work can change from one day to the next. Who would’ve expected the rapid shift to remote work? Plus, we now see people who want to work in companies that focus on inclusion, diversity, and well-being.
You need to analyze workforce and people data to create an environment where people feel valued. If you don’t, you risk losing your employees’ trust and loyalty as their values shift and evolve.
HR metrics can help you start on your analytics journey. They are the first step towards data-informed decisions aligned with your business goals.
How do I use HR metrics?
Use HR metrics to get a better view of what works and what doesn’t work in your company. To do so, start with a hypothesis or question. Here are some examples.
Is the voluntary turnover rate higher than you’d want?
How much is that costing you?
Is the talent acquisition process going well?
Or are you losing money on bad hires?
You can then turn to your HR tools to look for and analyze data that relate to those questions. These are only a few examples of what HR metrics can do for you.
Predicting future business needs is another area where HR analytics can be helpful. How many new employees will you need? What new skills will people need and want to learn? All this can be answered using HR metrics and can help you make better business decisions long term.

What are the most important HR metrics?
There are several types of metrics, each with its role. Of them, we identified 10 core metrics any company must watch:
Headcount
Turnover
Diversity
Total cost of the workforce (TCOW)
Compensation
Spans and layers
Employee engagement
Talent acquisition
Learning
Workforce planning
If you want to go deeper, you can also track more advanced metrics such as productivity or manager effectiveness. We’ll talk about each metric in detail in the following section.
10 HR metrics you absolutely need to watch
1. Headcount
About 70% of an organization’s budget goes towards its people costs. Because of that, having an accurate headcount is crucial.
Headcount is the total number of people working in your company at any given time. This includes permanent, temporary, and contingent employees as well as gig workers.
The headcount tells you if you have enough people to accomplish your goals. It also allows you to forecast how that number may change. That means better financial management and a more effective estimation of costs.

View headcount in a year-to-date view to understand the net change in the organization.
2. Turnover
If you thought replacing employees was easy, think again. The process can sometimes cost one-half to twice the employee’s annual salary. This should be a good motivation to want to reduce turnover rates.
Metrics you need to know include:
Predicted resignation—an approximate number of people that will leave the company in the near future.
Resignation trends—are more or fewer people quitting now than in the past quarter? Can you spot any patterns?
Estimated replacement costs—how much will it cost to replace those who leave the company?
Resignation drivers