HR METRICS

THAT MATTER

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What are HR metrics? 3

Why should HR use a data-driven approach? 3

Recruitment 6

Diversity, equity, inclusion, and belonging 11

Retention 19

Using an HRIS for your HR data 27

Growing stronger metrics 28
Meet Bob 30

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What are HR metrics?
HR Metrics are measurements that determine the effectiveness In fact, according to research by HiBob conducted in July 2022,
of your human resources initiatives. Once you’ve determined 94 percent of CFOs surveyed said they collaborated with HR,
your critical goals for recruiting and retention and diversity, and 88 percent said they regularly collaborated weekly, biweekly,
equity, inclusion, and belonging (DEI&B), you can use HR metrics or monthly.
to take a data-driven approach to track and assess your progress
and challenges. That degree of collaboration makes sense: CHROs and CFOs
share many business objectives. Fifty-seven percent of CFOs
surveyed said they coordinate with their HR counterparts to

Why should HR use a streamline processes more efficiently. The two functions work
on several areas across the business, most notably benefits
data-driven approach? and rewards, business and growth strategy, and compensation
management.
In today’s world of work, HR professionals are involved in
strategic decisions about their company’s growth and success—
Employee data provides the facts and figures to support these
what is working, what isn’t, and where to invest future efforts.
conversations, helping HR to have a deep understanding of their
But HR leaders don’t gather all their insights or make these
companies and locate any problem areas before they cost the
decisions in a bubble. They are working with other departments,
company money or talent. But that data isn’t always easy to get
especially finance—and that collaboration goes both ways.
(or make sense of).

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In Deloitte’s 2021 Global Human Capital Trends Survey,
only 3 percent of over 6300 executives said they had the
information they needed to make sound people decisions.
Even when companies have data, that information can be siloed
by departments or technology systems. As a result, leaders don’t
see the whole picture.

Sometimes, companies have so much data available that leaders

need help digesting all the information to make good decisions.
Companies are increasingly hiring HR data analysts to help sift
through the information and provide insights. They are also
turning to HR technology, such as an HRIS or HCM, to help
gather and parse data.

If your organization doesn’t have HR data analysts or

sophisticated HR technology, you can still use key performance
indicators (KPIs) to assess your business and make the informed,
data-driven decisions you need to ensure business success.

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In this guide, we’ll focus on three key areas that help
to define a company’s success:

1 2 3
Recruitment DEI&B Retention

Hire better talent faster Create a culture of fairness Keep your best people

time to fill, time to hire, quality of pay gap, salary range penetration, eNPS, career path ratio, salary
hire, professional growth salary average, gender diversity ratio change, absenteeism rates, L&D

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Recruitment
Nordics

Recent HiBob research conducted in Europe and the 30%

United States shows that 30 percent of HR professionals

Benelux
consider hiring, onboarding, and finding talent a primary 38%
business focus for the next six months.

US
Creating a smooth recruitment process involving all 37%

stakeholders—finance, hiring managers, and legal, for

example—helps HR build strong workflows so they can
hire better talent faster. 10 20 30 40

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 Key metrics to help
measure recruitment
1 Time-to-fill and time-to-hire
Time-to-fill and time-to-hire are two of the most important
recruitment metrics—but they’re not the same. The difference
is small but meaningful.

Time-to-fill measures the time for the entire hiring

process, from when a job request is made to when an
offer is accepted.

Your formula is:

The number of days between the starting point
(when the role is approved or advertised) and the endpoint
(the date the candidate accepts the job).

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 channels or too few recruiters dealing with too many applicants
or open roles) and interview processes (hiring managers who are
Time-to-hire measures the time from when the
slow to respond, overly complicated tasks, or involving too many
eventual hire begins the recruitment process
people in the decision).
to when the offer is accepted.

2 Quality-of-hire
Your formula to calculate time-to-hire is:
The number of days between the starting point (when the Quality-of-hire, which gauges the value a new hire adds to an
new hire starts the recruitment process) and the endpoint organization, is considered the “holy grail” of HR metrics. In a
(the date the candidate accepts the job). LinkedIn study, 88 percent of recruiting professionals said this
data would be helpful. However, less than half (48 percent) said
Industry Today cites the benchmark for time-to-fill at 42 days, they currently use it.
while the Society for Human Resource Management (SHRM) sets
the average cost per hire at $4,683. A healthy quality-of-hire score shows that recruiters bring in
good people, managers support retention efforts, and new hires
Time-to-fill can be measured company-wide or by department or thrive in their new roles. You can measure the score by taking
role. Recruiting costs are high, and the more time you spend on a few key HR metrics into consideration, based on a company’s
interviews, the more expensive the process becomes. goals and priorities.
Diving into these two metrics can help HR find lags in both
the recruitment processes (such as posting jobs on the wrong

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Companies need first to determine which metrics they Pre-hire quality is a predictive measure based on interviewer
want to focus on, assign a number from 1-5 to measure an impressions, referrals, scores on aptitude tests, and performance
employee’s effectiveness in regards to the metric, and then on assignments/assessments. An accurate pre-hire quality
calculate as follows: measurement can help predict a candidate’s future success at
a company, and some research shows that “organizations that
invest in a strong candidate experience improve their quality of
hires by 70%.”

Metric 1 + Metric 2 + Metric 3

Quality of hire can be measured at the end of the 90-day
onboarding period by looking at a new hire’s success in their
(Number of metrics) role, social acclimation, and day-to-day performance. Manager
reviews and 360-degree feedback can also help measure quality-
of-hire at this early stage.

The LinkedIn study found that the top three metrics for quality-
of-hire are employee retention, employee engagement, and
performance appraisal score. The list of measurable metrics is
long and varied.
(x)2
10
Quality-of-hire can be measured continuously throughout a
person’s time at the company—and even before.

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3 Employee growth rate
A healthy company positioned to succeed is growing and The formula for calculating the growth rate is:
adding new team members. Company growth rate measures
how much a company has grown or contracted over a specific
period. A positive number shows a positive growth rate, i.e., that
(# of employees in current period)
the company is growing. A negative number reveals a negative
(# of employees in previous interval)
growth rate and that the number of people leaving is higher than 100
the number joining the company. (average # of employees) X (total workdays)

Measuring the employee growth rate can help HR understand

growth patterns in an organization and better plan for the future.
The more a company grows, the more complex its needs will You can also calculate employee growth rates among a specific
be. group in your organization, such as per team or department.

To calculate the growth rate in your company, compare the Other HR KPIs associated with company growth include
number of employees at two different points in time and divide headcount, which refers to the number of employees in your
that number by the number of employees at the second time company, the number of new hires over a specified timeframe,
interval. The growth rate is usually expressed as a percentage. and the number of terminated employees over a specified
timeframe.

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Diversity, equity, inclusion,
and belonging (DEI&B)
It’s no secret that diverse teams work better. They’re a must-have—
but they don’t build themselves. HR professionals are familiar with the
term DE&I for diversity, equity, and inclusion. But the “b” for belonging
is there because it takes more than diversity, equity, and inclusion for
people to do their best work. They must feel they are an integral part
of the organization, where they are seen, heard, and valued.

Here are metrics to objectively measure a company’s diversity efforts

and successes and locate areas of improvement.

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1 Pay gap
No single compensation leader or HR professional can solve the Take this number, divide it by the men’s average, and multiply
gender pay gap, which is a global issue. But, HR does have the it by 100 to get the percentage difference between the two
power to shift the conversation and make closing the pay gap a groups. Salary medians can similarly measure the pay gap
priority. (median compares the midpoint salary of each group.)

Step 1:
In the United States, the gender pay gap between men and
women currently stands at 18 percent—meaning women earn
about 82 cents for every dollar. But the pay gap also varies by
race and ethnicity. Total women's salaries
Average
According to the Bureau of Labor Statistics, white women women's salary
earned 82.3 percent as much as white men, Black women earned Number of women
85 percent as much as Black men, Asian women earned just 79
percent as much as Asian men, and Hispanic women earned 85.7
percent as much as Hispanic men.

Total men's salaries

To calculate the pay gap, compare the salary averages of two
Average
different groups. For example, to measure the pay gap between
men's salary
men and women, find the salary averages for each gender. Next,
Number of men
subtract the women’s salary average from the men’s salary
average.

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Step 2: they earn less than white women. Other social identities, such
as disability, ethnicity, class, weight, and physical appearance
may combine with gender and result
in additional disadvantages in salary.
Average men's salary Average women's salary
100 The implications of the pay gap are immediate (current salary),
Average men's salary cumulative (total lifelong losses), and benefits-related
(non-monetary differences). With this data in hand, HR
can work to build a system that addresses existing inequities

These gaps represented by percentage can help HR and prevents future missteps.

professionals understand implicit and explicit differences in

how their organization’s culture and policies apply to different
gender, racial, and ethnic groups.

As you look at the gender pay gap, also take a close look at
intersectionality—when people may have multiple identities that
put them at a disadvantage in society.

For example, Black and Hispanic women face a gender pay gap
because they earn less than men and a racial pay gap, because

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 Median weekly earnings by race/gender

Pay in USD

Source: Bureau of Labor Statistics

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2 Salary range penetration 3 Salary average
Every job description in an organization should come with A similar metric used to spot pay gaps is the salary average.
an estimated salary range. While there may be occasional Measure salary average by team, department, employee
deviations from this range for exceptional candidates, the demographic, or organization.
range should reflect the standard pay for this position. Using
this assigned range, HR can calculate someone’s salary range To calculate the salary average, add all the salaries in your
penetration—meaning, how far they are into their range. chosen group and divide by the number of people in that group.

The formula is: The calculation looks like this:

(salary) (range minimum) sum of base salaries in specified groups

salary
100 average
(range maximum) (range minimum) number of employees

Examining differences in salary range penetration can help Salary average is a vital HR metric for understanding diversity,
reveal pay gap issues. It’s good practice to conduct regular equity, inclusion, and belonging in your organization. By
compensation audits and compare compensation for team breaking down your salary averages by demographic (age,
members in similar roles with similar amounts of experience. race, gender, ethnicity, sexual orientation, etc.), you’ll be able
to identify any existing inequities in your organization that go
beyond roles and their differences.
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4 Gender diversity ratio
To understand the gender breakdown of your teams, it’s easiest
#men employees : #women employees :
to measure in ratio form. Using ratios will help you know how
diverse your organization is as a whole, within teams, and other #non-binary employees : #other employees
groups.

The gender diversity ratio is used to determine if there is an

equitable or fair representation of people of different genders
within your organization. It is most commonly used to measure The diversity ratio can also measure the representation of
the ratio of men and women but can also include non-binary different types of groups within your organization, such as race,
people. ethnicity, or age.

To calculate your company’s gender diversity ratio, you’ll need For a company to show that it cares about DEI&B, it must put its
to divide your people into groups based on declared gender and money where its mouth is: It must foster an inclusive culture that
then divide them down to the smallest numbers. celebrates diversity and gives people from underrepresented
populations a chance to succeed.

By tracking and reviewing these metrics, HR can make sure

people from all teams and walks of life are well represented
among their groups and receive fair pay.

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5 ERG ratio
Employee Resource Groups (ERGs) help boost DEI&B and
company culture, increase belonging and connect people to
the community. You can measure satisfaction and engagement
through surveys and participation tracking.

The first step to measuring participation rates is defining what an

active member looks like. Use the following formula to find the
participation rate of your company’s ERG-sponsored meetings or
developmental events.

# of active members active

member
100 participation
# of all members rate

Other metrics could compare members’ promotion and retention

rates to nonmembers.

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6 DEI&B initiative metrics
Assess the company’s progress on diversity, equity, inclusion, Next, look at the percentage of diverse candidates hired
and belonging by measuring awareness of it. You can measure compared to all candidates hired. Dig a little deeper into what
the percentage of employees or customers who know about jobs (and what salaries) the candidates accepted. If the majority
the company’s commitment to DEI&B or who engage in online of diverse candidates accepted lower-level jobs or similar jobs at
discussions about related topics. If you’ve established specific lower salaries, this requires a closer look.
goals, such as establishing a mentorship program, track your
company’s progress on those. Collecting metrics for inclusion and belonging is more complex.
People who don’t feel included will leave the company. Look at
Measuring some aspects of DEI&B, like recruiting and retention, turnover by demographics for teams and departments. Examine
is straightforward. If you want to improve diversity in hiring, start when women and people of color get promoted versus their
with your applicant pool. counterparts. Performance and opportunities will impact this
statistic, but you can still look for trends that might indicate an
One formula to assess if you’re including enough people in your issue.
candidate pool is:
The demographics of a department or company board can point
to inclusion issues, as well, especially if those groups consist
% of diverse applicants of long-time colleagues and acquaintances. Dig deeper with
surveys to find out if people feel respected, valued, and involved.

% of all applicants

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Retention
Employee retention will always be a top concern for HR, recruiters,
and management. Keeping retention rates high helps companies save
on recruiting and onboarding costs while increasing employee loyalty
and trust.

Below are several key metrics to help measure retention.

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1 eNPS (employee net promoter score)
eNPS is a metric that assesses people’s job satisfaction by A score between 10 and 20 is reasonable, 20 and 30 is good,
measuring their willingness to recommend their current and 40 and 50 is outstanding. In designing the survey, it’s best
company to others. If people want their friends to get on board, to include room for open-ended answers which can help locate
it’s safe to say they’re reasonably satisfied working at the areas for improvement.
company. If they’re telling their pals to stay away, it’s a sign of
bigger problems. For a more thorough analysis, organize results in various ways,
such as by department, role, length of employment, or even
Of all the HR metrics, eNPS is the easiest to measure. Send gender, age, and race. This can help determine if any issues are
people a survey and ask, “On a scale from 0-10, how likely are company-wide or related to specific groups.
you to recommend this company as a place to work?”
Companies usually run eNPS surveys every three to six months.
Divide people into “promoters” (9-10), “passives” (7-8), and This continuous process allows your people to offer constructive
“detractors” (0-6). feedback, collaborate with managers, and share collective
responsibility.
The formula for eNPS is:

(number of promoters number of detractors)

100
(number of respondents)

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2 Career Path Ratio
Your people should feel empowered to move in all directions. This number is easy to calculate for companies with clear
org charts and distinct job titles and tiers. The trickier part is
Using the career path ratio, HR can keep track of promotions understanding where and how to improve. Providing several
and lateral moves to see how employees are growing, changing, growth tracks and encouraging promotion from within is critical.
and adapting within the organization.
When movement is strictly vertical, professionals who
To calculate this metric, divide the total number of promotions have reached their promotional ceiling can feel “stuck.” An
by the sum of all upward and lateral role changes. Start with a organization that is too “top-heavy” might unintentionally push
lookback period of at least a year to ensure there’s enough data. great people away. And companies that discourage lateral moves
can find people growing bored and leaving.

To understand the cause of a retention issue, examining the

(total numbers of promotions)
career path ratio is a great place to start.

(all role changes: promotions lateral movements)

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3 Salary change
People want to feel that they are growing within their
companies, both in their career path and salary. A company that
doesn’t increase wages over time is more likely to see a higher sum of base salaries in current
attrition rate as people leave for companies that will pay them time interval - sum of base
more. salaries in previous interval % salary
100 change
The salary change KPI presents your company’s base salary
sum of base salaries in
changes over time and helps you to make informed salary cost
previous time interval
estimates and projections.

To calculate salary change, you measure the difference between

the sum of base salary values over two periods of time and You can calculate salary change across the entire company or
divide by the sum of base salaries in the previous time interval. filter by team, department, or a specific segment or group. A low
Then, multiply this number by 100 for a percentage salary percentage indicates that there were few salary increases among
change. this group, and can impact employee retention.

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4 Absenteeism rates
When absences become habitual or are taken without good
(average numbers of employees missed workdays)
reason, they can cause a drag on productivity. If one person
is unreliable, the whole team feels it. That’s why when we 100
talk about absenteeism, we distinguish between excused and (average numbers of employees total workdays)
unexcused absences.

Excused absences are scheduled in advance and leave the rest

of the team enough time to shift the workload. Unexcused A company’s absenteeism rate should be as close to zero as
absences arrive without warning and leave teams in the weeds. possible.
Sick days and other unplanned absences will happen, but when
it keeps happening, and for no excusable reason, leaders need to There are many causes of absenteeism, such as bad
address it. management, workplace stress, burnout, and general feelings
associated with disengaged employees, such as feeling
For example, “pandemic-related absences have cost employers undervalued or that their work has no impact.
more than $78.4 billion — nearly $1 billion each week.”
However, there may also be other reasons. The Bradford Factor
To calculate a company’s absenteeism rate, divide the number of is a specific type of absenteeism measurement which measures
unexcused absences by the amount of time being measured, and individuals and the duration and frequency of the absenteeism.
multiply the result by 100.

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To measure someone’s Bradford Factor, use the Bradford formula: If you see that a team member is routinely taking short absences,
it could be a warning sign about their health and/or wellbeing
and not necessarily about their attitude about work. In this case,
scheduling a one-on-one to discuss their situation may help
2
S D B them get the resources needed to address any issues.

Here, “S” is for “spells,” meaning the number of absences over

a set period. Square this number and then multiply it by “D” for
“days,” meaning the total number of days a person was absent.

The Bradford Factor doesn’t just measure the number of days off
but focuses on the number of absences. It is based on the theory
that shorter, more frequent absences are more detrimental to the
organization than longer, less frequent ones.

When you use the Bradford Factor, a higher score reflects a more
significant negative impact on the business. A score of less than
50 should not merit concern. This is the one HR metric where a
lower score is better.

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5 Presenteeism rates
Presenteeism occurs when people are at work but aren’t Multiply the number of hours lost per year by the average hourly
engaged. Maybe they’re sick, burned out, or working in a toxic salary for the organization to get the total cost.
environment. Regardless of the cause, experts have estimated
that presenteeism costs companies more than $150 billion in lost
productivity. Number of Average Cost of
hours lost per year hourly salary presenteeism
Presenteeism is more challenging to calculate than absenteeism,
but you can get a general idea by surveying your people with
questions like, “What percentage of the week are you at work
but unproductive?” Let’s say the average answer is 10 percent.
With that number, you can use this formula:

40 10 52
Number of
hours lost
hour work week percent time lost weeks per year

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6 Learning and development
Most executives (72 percent) in the 2021 Deloitte Global Human Measure employee productivity before and after training to spot
Capital survey said the ability of people to adapt, reskill, and improvement. A team engagement survey can indicate if a leader
take on new roles was the most or second most critical factor in communicated more effectively after training than before. KPIs
helping companies face future disruptions. L&D and upskilling for mobility can determine if people got promoted after training,
are vital ways to address skills gaps, optimize talents, and attract and retention data can indicate if people left.
and retain people.
In general, companies should focus on creating an inclusive
Common measurements of the ROI of training include course company culture that is warm and welcoming. It’s not just about
completion rates, course grades, employee satisfaction surveys, providing company perks such as well-stocked kitchens and
and costs. But other measurements can tie more closely to the pool tables. Instead, it’s about providing an environment where
impact training has on business outcomes. people feel they belong and can bring their best selves to work.

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Using an HRIS to collect
and analyze your HR data
Although measuring some KPIs by hand or through spreadsheets is
possible, it’s not a sustainable way to maintain a current and accurate
view of the company. For this reason, many companies use human
resources information systems (HRIS) to collect and analyze their
data.

With an HRIS, they can collect data from multiple sources, reducing
silos. Advanced analytics are there to help you understand the data
clearly so you can make better and more informed decisions quickly.

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 Nordics
67%

Examples of people metrics in action: Benelux

growing stronger with data on your side 74%

According to HiBob research, executives agree that the US

75%
HR function is critical to their company’s success.

10 20 30 40 50 60 70 80 90 100

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HR leaders play an increasingly vital role in organizations beyond The knowledge HR can glean about people impacts entire
the people function. In today’s environment, companies rely on organizational structures and strategies. With the right
HR leaders to help make decisions that directly influence the HR platform and people analytics, companies can combine these
business’s bottom line. HR metrics with other business data, such as financial statistics
and compensation packages, to maximize effectiveness and
With this increased responsibility, HR leaders must be more drive long-term success.
data-driven. That requires pouring through endless sources of
data and collaborating with other functions to make sound and
agile decisions.

The metrics outlined in this guide can be used by HR teams to

proactively address people’s concerns before they start to affect
recruitment, retention, and engagement rates.

In the past, only large organizations could employ such data-

driven HR strategies. But modern HR tech is making it easy for
companies to analyze, use, and provide the data HR leaders need
to lead their companies to success.

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Meet Bob
At HiBob, we’ve built a modern HR platform designed for modern In a short time, Bob can be deployed to enable communication,
business needs—today and beyond. collaboration, and connectivity that drives stronger engagement,
productivity, and business outcomes.
We focused on building something robust yet intuitive and easy
to use, which has led Bob to be the company culture platform of
choice for thousands of fast-growing modern, mid-sized organizations.

For HR For managers For employees

it automates many common processes, It provides access to data and It’s the tools and information they
allows greater oversight and visibility of the insights to help them lead more need to connect, develop, and
business, and centralizes all people data in effectively and streamline processes. grow throughout their journey.
a secure, user-friendly environment.

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Now is the time to make smarter decisions
when it comes to your people and organization.

To learn more about HiBob and our data-driven

tools, get in touch with us at contact@hibob.com

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