30 HR metrics and formulas every HR should know
HR metrics push you to set clear and measurable goals, measure progress/results, and improvise on them. They back your opinions, ideas and strategies in the meeting rooms, and never let you down.
In this blog, we cover four categories of HR metrics:
- Hiring process optimization metrics
- Employee turnover metrics
- Employee Referral program metrics
- Candidate experience metrics
Hiring process optimization metrics
1) Application completion rate
This metric makes sense if you use an application on your careers page or portals through which candidates apply to open jobs. It shows you how simple or difficult your application form is and if people have the time and patience to fill it or not.
You can improve your application completion rates by,
- Using a short application, ask only for the most necessary information
- Using a progress bar, or splitting questions by sections, if you need to use a long form
- Clearly label all your fields and leave no room for ambiguity
2) Candidate call back rate
A low candidate call back rate is an indication that candidates don’t find your offer compelling or convincing.
- Try multiple recruiting pitches and see what works best for you
- Try alternative means of communication – SMS, messengers, LinkedIn, email or anything you think might work
3) Interviews per hireYour interviews per hire should be as low as possible. If it’s high, it means that
- A lot of your hiring manager’s time is exhausted on interviews
- There is more scope for improvement in the screening process
To reduce the metric and move it in your favor,
- Revisit your hiring managers’ expectations, and craft clear JDs
- Use clearly defined deal-breakers for the screening process. Keep adding more to the list, until you are able to reduce the number of candidates moving to the interview stage.
4) Time to hire
Time to hire is the time taken by a candidate to accept an offer since the time he/she was first contacted by the recruiter.
5) Time to fill
Time to fill is the time taken by a recruiter to fill a position. This can be calculated based on when the hiring manager requests for a candidate or when the recruiter advertises for the job role, etc – whatever works best for you.6) Cost per hire Internal costs can include recruiter salaries, employee referral bonuses, interview costs, infrastructure, and other fixed costs. External costs can include Agency fees, advertising costs, software costs, travel and event costs.
The goal of tracking this metric is not cost reduction but to understand how, when and where to optimize your spend to attract and hire topmost talent.
To optimize the cost per hire,
- First, track it
- Observe what sources bring you high-quality candidates at an optimal cost per hire and see how you can reallocate resources and scale them
- Leverage your employee referrals
- Take a ride on your company’s general marketing efforts – introduce culture videos, career page links and anything enticing into the general marketing efforts
- Try social media, with little extra efforts you will be to gain an advantage
7) The throughput of the candidate pipeline
The throughput of the candidate pipeline is the conversion rate at each recruiting stage.
This metric helps you spot bottlenecks and inefficiencies in the in the hiring process, at each stage.
8) Qualified candidates
It’s similar to qualifying a sales lead. The metric gives you an understanding of the quality of your sources and sourcing methods.To move the metric in your favor,
- Channel resources into sources that bring more qualified leads
- Train your recruiters. Equip them with tips, tricks, and techniques for screening
- Work on your employer branding to attract quality talent
9) Offer acceptance rate
Track why candidates decline your offers. It’s easier to get a hired candidate to accept an offer instead of going through the whole process again.
Tracking the reasons also helps you counter them and improve your offer.
For example, if you notice that a lot of candidates decline the job because they can’t find the motivation to relocate, cover their relocating costs and give them an attractive signing bonus.
10) Quality of hire
It’s vital for a growing company to hire quality candidates who bring excellent performance, align with the company goals, stay with the company and significantly contribute to overall success.
How to improve the quality of hires?
- Attract the right candidates with better and stronger JDs
- Communicate your performance indicators to your candidates
- If required, modify the role a bit to best fit the candidate
- Measure for progress not just expected results
11) Minority representation percentage
Minority representation not just in the overall company but in all levels of the organization.
Employee Turnover metrics
12) Overall turnover rate
Overall turnover rate shows you what percent of employees leave your organization in a particular month or year. A high turnover rate might be an indication that there are issues at the team, department or organizational levels.
To control the over turnover rate,
- First, understand why the high turnover – talk to your employees
- Take your exit interviews seriously and work on the feedback that leaving employees give
- Create a safe and transparent culture where people can talk about their difficulties
13) New hire turnover rate
New hire turnover rate is the rate at which new hires leave your organization. You can calculate this on a monthly basis or annual basis.New hires leaving the organization means damage to your employer brand, wasted recruitment budget, and short-staffed teams.
To control new hire turnover,
- Clearly, communicate the requirements and responsibilities on the JD and during the interview
- Discuss career paths and performance indicators
- Design onboarding programs that have an impact and help new hires settle in
Check on them after they’ve been on the role for a few weeks
14) Overall retention rateThe overall retention rate helps you understand what percent of employees choose to stay in your team, department or organization. It gives you insights into the health and atmosphere of the firm.
To increase employee retention rates,
- Screen thoroughly during the hiring process and do not hire out of urgency.
- Offer competitive pay, perks, and benefits. (Keep a tab on what’s best in the industry.)
- Measure and work on your employee engagement scores.
- Create opportunities for growth within the organization
- Collect 360-degree feedback on managers. Give them pointers to improve their relational skills if required. Managers contribute to 75% of voluntary turnover.
15) Voluntary turnover rate
This metric is the rate at which employees voluntarily quit the organization due to various reasons – compensation, conflicts with peers/managers, bad work environment, lack of job satisfaction, an opportunity at a better job, etc.
How to control the voluntary turnover rate?
- Talk to your employees often.
- Run employee satisfaction surveys and use the feedback you get from them.
- Recognize and reward their contributions.
- Stay competitive with other companies in terms of pay, perks, culture, and opportunities.
- If they still leave, find out why and work on fixing it for the future employees.
16) Involuntary turnover rate
This is the rate at which employees are involuntarily terminated on their jobs.
To drive this metric in your favor,
- Improve your hiring process. Don’t end up hiring people you have to fire.
- Talk to your hiring managers and find out the top reasons for involuntary turnover and start by fixing them.
- Train people if there is a skill gap.
- Have a culture that promotes mentorship and helpfulness.
17) The retention rate of stars
This metric shows you if you are retaining top performers or not.How to retain and nurture top performers?
- Give them ownership and keep them continuously challenged
- Reward and recognize
- Create opportunities for growth
- Give them visibility into strategies and decisions
- Provide them with good mentors
18) The retention rate of below average performers
- If you notice that you are retaining a lot of below-average performers, see what you are doing wrong or what’s attracting them. Fix it.
- Work with your below average performers – training, mentorship, role changes whatever it takes to bring out the best in them.
19) Average employee tenure By increasing the average employee tenure, you will be able to better regulate your retention and turnover rates. How to increase the average employee tenure? Here’s what makes people stay:
- The relationships they build over time within the organization
- Organizational values that resonate with them
- Opportunities and challenges that give them a sense of growth
- Competitive compensation packages
Referral program metrics
20) Employee participation
This is the number of employees who participated in the referral program. You can also study the employee participation numbers by business units, departments or different levels in the organization.
To motivate more employees to refer, market your program aggressively within the company. Offer attractive rewards, recognize those who participate consistently and most importantly, create and maintain an extraordinary work culture and environment into which they will want to bring their friends and family.
21) Cost per hire vs cost per hire of other sources
Calculate the cost per hire for referrals vs cost per hire for other sources. Most likely your referral program will have a lower cost per hire showing you that you are going in the right direction.
If not, rethink your spends and optimize them. While doing so, take into consideration other metrics like the quality of hire, retention rate and time to hire/fill.
22) Repeat referrals
The metric tracks the number of employees that refer more than once. If you don’t see a lot of employees re-referring candidates, it could be an internal issue that has to be fixed. For example, a slow hiring process, lack of proper updates on previous referrals or bad candidate experiences can kill all motivation to refer.
Your referral candidates should be put on a fast-track hiring process. You should frequently communicate updates to both the referrer and referee.
23) Quality of referrals
Calculate the quality of hire for only the referred candidates. To improve the quality of referrals,
- Equip your employees with the right information and material – JDs, brochures, culture videos, or whatever it is that they might need to invite a friend to pursue a role with you.
- Show your employees ‘who to’ and ‘who not to’ refer
- Communicate your expectations (or performance indicators) verbally with candidates as they start on their new role
24) The retention rates of referred candidates
The success of your referral program does not solely depend on how many employees participate or the number of candidates they refer. There are few other important factors you should consider – performance on the job, helpfulness in their teams, alignment to company’s goals and eventually how long they stay with the company before they make a move.To control the retention rates,
- Talk to new hires after a month, or three months to see how they’ve settled in and if they have any difficulties
- Conduct exit interviews and use the feedback you get
- When employees leave, ask their peers and managers about why they left. You might gather some additional perspective
Candidate experience metrics
25) Candidate experience score (Use a Net Promoter Score)Follow up detractors with a quick survey to identify why candidates had a bad experience. Anyone who has come face to face with your organization is a potential employee, customer or brand-bearer. You want them to think nice things about you.
26) Candidate response rate over different channels
This metric allows you to track the response rates of candidates over different channels and adapt the most effective ones.
Candidate response rate = (Number of candidates who responded/ Number of contacted) * 100
27) Candidate withdrawal reasons
Track why candidates drop out during an interview stage – lack of updates, low salary, too much travel, inconvenient interview time etc.
28) Time to contact candidate after application completion
Time taken for a recruiter to first contact the candidate after he/she completed the application form.
Time taken for a recruiter to first contact a candidate = Date of contact – Date the application form was submitted.
29) Assessment completion rate
Assessment completion rate = (Total number of candidates who completed the assessment/ Total number candidates who were given the assessment) * 100
To improve assessment completion rates,
- Do not give time-consuming assignments because many candidates probably already work on a full-time job while looking for another one.
- Give exciting assignments that really test their skills and passion for the job. It’s an opportunity to showcase what kind of things they’ll get to do on an everyday basis on their role.
- Follow up and extend guidance if necessary.
30) Time taken to communicate the results to rejected candidates
Whether it’s a yes or no, every candidate has the right to know. Recruiters need some motivation to communicate the results on time and with empathy whenever necessary – metrics will help them do the job.
Track the time taken the time taken to inform a candidate that he/ she was rejected. List it as one of the performance indicators for your recruiters/recruiting team.
Time taken to inform a rejected candidate = Date of communication – Date of rejection.
That’s all on this list.
Drop a comment and tell us if there is something else you track 🙂
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