• Ibis Valdes

5 HR Metrics and How to Measure Them

Human Resources metrics should be used by employers to measure how costs and activities influence overall organizational performance. Developing and tracking HR metrics helps orgs determine how different kinds of employees can best be served within the org to maximize benefits on company culture, employee engagement, and the overall health of business operations.





Employee & New Employee Turnover


Calculating employee turnover helps to determine employee retention and how satisfied employees feel. The average turnover rate in the United States is around 20 percent. However, a better goal is to aim around 10% or less.


A high employee turnover rate comes at a detrimental and high cost for your org. Each time an employee leaves, you are forced to compensate the expense by recruiting, interviewing, hiring, onboarding, and training them. The costs associated with employee turnover can be as high as 50% to 60% of an employee’s annual salary!


Turnover rate = Number of employee terminations ÷ Average number of employees


Percent of new hires that leave in 90 days = New hires who leave (within 90 days) ÷ Total number of new hires who leave x 100


Employee Productivity Rate


Throughout 2020, many companies experienced forced remote work arrangements that in some cases will stay permanent as a necessity rather than a benefit. If productivity is steadily decreasing, it’s possible that employees may be overworked or dealing with other issues. When managing remote employees, it’s important to know how much time within a day or a week that an employee needs to actually be productive (including break times, lunch or dinner breaks, and other occasions).


Comparing the numbers calculated in 2020 to previous years will help determine how your remote workforce-related changes are affecting your operations.

Employee Productivity Rate of a single employee = Company revenue ÷ the number of employees on payroll


Diversity and Inclusion


True diversity in your workforce involves more than just having equal ratios of women to men, or having a racially balanced team. It also means having people from all kinds of backgrounds and identities at every level of your organization. Take an intersectional approach to diversity by considering identities that may be hidden as well such as disability status, sexual orientation, or veteran status.


People Group-specific Diversity Rate = Total Company Hires (within a timeframe) ÷ Categorized People Group Hires


Pay Equity


Pay equity is an ongoing effort of identifying and eliminating discrimination in the wage-setting process within your business. The importance of measuring employee compensation is to ensure fair, just, and equitable pay.


Calculate fair pay standards by comparing factors such as an employee’s performance, education, experience, and management or supervisory levels. Employees with similar gender, education levels, and roles should be paid equally, for instance. Feel free to replace the “gender” example below to calculate wages for employees of different races, staff with disabilities, race, and more.



“Unadjusted” Gender Pay Gap = Average Male Pay – Average Female Pay ÷ Average Male Pay


Healthcare Costs Per Employee


This metric helps to determine how much of the overall budget is being spent on employee health insurance costs. In 2019, the average cost of healthcare insurance, per employee for family coverage was $20,576. Of that amount, employees paid an average of $6,013 toward the cost of their healthcare coverage. Do you know where your business stands?


Since these related costs are increasing each year, both employees and employers are seeking high-quality healthcare coverage at the lowest cost possible. Tracking this cost is the first step in determining how your company is spending its resources in an expensive but necessary benefit to attract a quality workforce.


Health care costs per employee = Total health care costs (what you contribute to your employees’ health care premiums over a benefits year) ÷ Number of employees signed up for health care




These are just some examples of many metrics that are essential to the success of your team and business. These metrics provide essential and oftentimes unseen data that illuminate whether or not the company is spending its resources in the wisest way possible.



Ibis Valdes is a consultant on diversity, inclusion, empowerment, and leadership. She now helps clients to press pause and refresh their brand, culture, and productivity through DEI strategy. Schedule your free assessment today by clicking here.


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