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  • Writer's pictureKhurram Rana

Important HR Metrics for Analysis (1/2)

While the everchanging dynamics of the workforce will keep bringing new metrics in to the scope for analysis - there are some classics that I just felt like going over today.

Employee Turnover and Retention: Analyzing turnover rates and identifying the reasons behind employee departures can help organizations understand the factors influencing retention. This information is generally used to guide the development of strategies to improve employee engagement and reduce turnover. While companies can always choose to refine these formula's to suit their own specific requirement the basis generally is the same:

This is typically calculated on an annual basis, but it can also be calculated for any specific time frame (e.g., monthly).


Employee Turnover Rate = (Number of Employees Who Left / Average Total Number of Employees) x 100

Steps to calculate:

Step 1: Determine the number of employees who left during the chosen period (e.g., a year). This includes employees who resigned, retired, were terminated, or otherwise left the company.

Step 2: Calculate the average total number of employees during the same period. To do this, add the number of employees at the beginning and end of the period, then divide by 2.

Step 3: Divide the number of employees who left by the average total number of employees and multiply by 100 to get the turnover rate as a percentage.

The retention rate is the complementary value of the turnover rate and represents the percentage of employees who stayed with the organization during the specified period.


Employee Retention Rate = 100 - Employee Turnover Rate

For example, if the turnover rate is 10%, then the retention rate would be 100 - 10 = 90%.

Recruitment and Selection:

HR analytics can evaluate the effectiveness of recruitment sources, the time-to-fill job openings, and the quality of hires for instance. Some widely used metrics are shared below:

Time-to-Fill measures the time taken to fill a job opening from the moment it is posted until the candidate accepts the job offer.


Time-to-Fill = (Date Candidate Accepted Offer - Date Job Opening Posted)

Note: This metric can be calculated for individual positions or as an average across all positions.

Time-to-Hire measures the time taken from when a candidate is first sourced or identified to when they accept the job offer.


Time-to-Hire = (Date Candidate Accepted Offer - Date Candidate First Identified/Sourced)

Sourcing Channel Effectiveness metric helps assess the performance of different candidate across sourcing channels (e.g., job boards, employee referrals, social media, etc.) in terms of generating qualified applicants and successful hires.


Sourcing Channel Effectiveness = (Number of Hires from a Specific Source / Total Number of Hires) x 100

Applicant-to-Interview Ratio shows the number of applicants that need to be screened in order to invite one candidate for an interview.


Applicant-to-Interview Ratio = (Number of Applicants / Number of Candidates Invited to Interview)

Offer Acceptance Rate indicates the percentage of job offers that candidates accept.


Offer Acceptance Rate = (Number of Accepted Offers / Number of Job Offers) x 100

Cost-per-Hire evaluates the average cost incurred by the organization to hire a candidate. It includes expenses related to sourcing, recruitment advertising, agency fees, interview costs, etc.


Cost-per-Hire = (Total Recruitment Costs / Number of Hires)

Quality of Hire is a subjective metric that assesses the performance and overall contribution of new hires to the organization. It can be measured through performance evaluations, productivity metrics, or other relevant key performance indicators (KPIs) specific to the role. Another way to go about this is also to compare CGPA, your own organizations assessment scores versus the performance in year 1 and so on to gauge effectiveness of the screening process.

Employee Performance: Tracking and analyzing employee performance metrics can assist in identifying top performers, understanding performance gaps, and determining the impact of performance management initiatives.

Some general tools used include KPI's ( Key Performance Indicators), MBO (Management by Objectives), 360 degree feedback, Self and / or managers assessments and BARS (Behavioral Anchored Rating Scales). Others do use sometimes in conjunction with scores obtained from previous methods such tools as comparative ranking or forced distribution etc. I have also seen certain job roles using critical incident method to gauge employee performance.

Employee Engagement: Measuring and analyzing employee engagement surveys can provide insights into the level of satisfaction and commitment within the workforce. They generally cover areas like various aspects of the work environment, including job satisfaction, work-life balance, career growth opportunities, relationship with managers, organizational culture, and more.

Training and Development: Assessing the impact of training and development programs can help determine their effectiveness and ROI. HR analytics can identify skill gaps and areas for improvement in employee development. Here are some ways to consider:

  1. Training Evaluation Surveys: After completing a training program, participants are asked to provide feedback through training evaluation surveys. These surveys gather insights on the relevance of the training content, the effectiveness of the training delivery, and the applicability of the skills learned to their job roles.

  2. Pre and Post-Training Assessments: Pre and post-training assessments are used to measure the knowledge, skills, and competencies of employees before and after the training. By comparing the scores, you can determine the level of improvement and effectiveness of the training.

  3. Training Completion Rates: HR tracks the number of employees who successfully complete the training programs. This metric helps understand the level of engagement and participation in the learning initiatives.

  4. Training Costs: The cost of training and development programs is calculated to determine the return on investment (ROI) and cost-effectiveness of the training efforts.

  5. Skills Application and Transfer: HR assesses whether employees apply the skills and knowledge gained from training in their daily work. This can be done through follow-up assessments or observations of job performance.

  6. Performance Improvement: HR evaluates whether there is a noticeable improvement in employee performance after training. This can be measured using performance metrics or KPIs relevant to the trained skills.

  7. Employee Feedback and Engagement: Collecting feedback from employees about their training experiences and how it has impacted their job satisfaction and engagement can provide valuable insights into the effectiveness of the training.

  8. 360-Degree Feedback: Incorporating feedback from peers, supervisors, and subordinates can provide a holistic view of how training has influenced an employee's performance and behavior.

  9. Promotions and Advancements: HR tracks whether employees who have participated in specific training and development programs are more likely to be promoted or advanced within the organization.

  10. On-the-Job Application: Observing how employees apply the newly acquired skills on the job, either through direct observation or through project outputs, can provide tangible evidence of training effectiveness.

  11. Retention Rates: Monitoring whether employees who participate in training and development programs have higher retention rates can indicate the impact of such initiatives on employee engagement and loyalty.

I will share some more tomorrow, in the mean time feel free to share any that you use at your organization as well.

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Khurram Rana