7 Essential Metrics for Data-Driven HR

Aug 30, 2022


When HR decides to up its data game with enhanced data literacy skills, the best place to start is often within its own people and departmental operations. 

HR can use those skills to define, select, and apply metrics to inform more logical, evidence-based workforce analysis. (For more on that, see our previous blog on Why Data-Driven HR Matters). 

If you’re at that point, have you wondered what HR metrics are best for you among the thousands that exist?

Your choice of people metrics will vary depending on your business, industry, unique goals, and KPIs. 

So, your top seven HR metrics may look quite different from ours. We chose the following metrics because they apply to many industries today.


1. Employee Retention

What is it? 

Employee Retention is when a business can keep talented employees motivated to stay with them over the long term, especially during stressful business periods. 

We calculate Employee Retention Rate with this formula: 
Total no. of employees – Total no. of employees who left   x 100 
Total no. of employees 

Employee retention metrics may include retention rate per job category, manager, department, age group, ethnicity group, gender, and performance level.  

Employee retention metrics can also include voluntary turnover, involuntary turnover, employee satisfaction rate, cost of employee turnover, engagement scores, job satisfaction, and flight risk data. 

Why calculate it? 

The Great Switch or Resignation, with millions leaving jobs to seek better opportunities, makes retention of great relevance during a labor shortage. 

Understanding your retention rate helps determine what makes your business a good or bad place to work. 

Tracking employee retention metrics is essential to keeping talented employees with you.

2. Employee Attrition 

What is it? 

Employee Attrition is the naturally occurring reduction in the workforce due to resignations, retirement, sickness, or death. The employer does not plan to replace these positions soon or ever. 

The Employee Attrition rate is calculated by the number of terminations during a period divided by the number of employees at the beginning of that period. 

Why calculate it? 

The Great Switch, with millions leaving jobs to seek better opportunities, makes attrition a relevant metric to plan for a stable labor force. 

An unusually high attrition rate is a danger sign alerting you to examine the reasons. It might be due to one or several reasons, such as poor job satisfaction, lack of growth opportunities, poor organizational culture, poor management, bias, or lack of flexibility in work-from-home arrangements.

3. New Hire Turnover Rate

What is it? 

Early or New Hire Turnover Rate is the number of employees who leave an organization within their first year. Usually, you measure the total number of employees who leave during the period. But you can also measure subcategories, such as departments or demographic groups. 

It is calculated by the number of employees who leave the company during their first year of employment divided by the total number of employees hired within the same calendar year as a percentage. 

Why calculate it? 

Though there are many reasons employees leave, if the company is at fault, you should determine why—or keep hemorrhaging talent. 

Common reasons for high turnover include overwork or burnout, negative feelings towards a manager, toxic work environment, poor or absent onboarding, lack of career growth opportunity, a significant life event, or getting a better offer elsewhere.

3. Employee Engagement Level

What is it? 

It measures how motivated and content workers are in their workload and how much agency they have. It’s a way to measure how committed an employee is to an organization and its goals and values. 

Examples of engagement metrics may include workload balance, personal productivity insights, individual and team goals, employee absenteeism rate, turnover rate, employee satisfaction rates, employee Net Provider Scores, and responses to employee engagement surveys. 

Why calculate it? 

Engaged employees outperform those who aren’t. They produce higher quality work at a faster rate. HR Cloud found that a highly engaged workforce boosts productivity by 21%. They are also more energetic, upbeat, and innovative. They are less likely to quarrel or have other conflicts. 

Engaged employees are linked to improved customer experience and higher profits. 

Engaged workers have a lower absenteeism and turnover rate and stay on longer, giving you a higher retention rate, which makes for more stable, reliable business operations. 

5. Performance

What is it? 

Performance metrics measure how well or how efficiently an employee performs their job or meets targets.  

Some performance metrics are quantifiable, such as measuring the number of units produced in a factory over a time period. Some are not easily quantifiable, such as interpersonal skills or coaching ability. 

Examples of performance metrics include efficiency, quality, teamwork, learning ability, adherence to timelines, and task completion rates. 

When measuring efficiency, you need to evaluate 

  • the job description, 
  • the type and amount of work assigned, 
  • deadlines for completion, and 
  • quality of work submitted. 

Why calculate it? 

Performance metrics define employer expectations. They help measure employee performance to see where improvements, training, or discipline may be needed.

6. Time to Productivity

What is it? 

Time to productivity is how long it takes for employees to become productive. It is the time between the first day of hire and when the employee contributes fully to the organization. 

Why calculate it? 

The shorter the time to productivity, the less it will cost your company. You should track it if you want to optimize your recruitment and onboarding costs. 

7. Revenue or Profit Per Employee

What is it? 

Revenue per employee roughly measures how much each employee makes for the firm.  

It is calculated by dividing the company’s total revenue by its current number of employees. 

This metric should be used when comparing companies in the same industry. Out of context, the metric isn’t especially valuable. 

Why calculate it? 

It gives insight into the lifetime value of employees. 

It lets firms in the same industry compare themselves to assess relative employee productivity, costs, and tenure. 


Do you need to upgrade your HR technology systems to benefit from better HR metrics? Call Pixentia for a consultation. We can help you assess your needs and implement a solution.

About Pixentia 
Pixentia is a full-service technology company dedicated to helping clients solve business problems, improve the capability of their people, and achieve better results.  


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