Top 11 HR Metrics Every Company Should be Tracking in 2023
Data and analytics are essential in almost every business operation because they objectively examine your company's health. And this is particularly true when it comes to human resources (HR).
By tracking HR metrics, your organization can assess workforce situations and circumstances to improve the workplace environment, optimize team productivity, and boost revenue.
So, what do you say? Are you ready to learn the top HR metrics your company should track this year?
Let's dive in.
1. Total cost of the workforce
One of the most significant HR metrics is the total cost of the workforce. This metric covers all the costs of maintaining your team, such as salaries, headcounts, etc.
The purpose of tracking and assessing the total cost of the workforce is to get a bigger-picture view of what you're spending as a department.
Thankfully, you don't have to manually take out a pen and paper and add it up. You can use general ledger software to accurately track all human resources-related expenses.
And with the rise of self-service analytics tools, you can empower your HR teams to make wide-lensed, data-driven decisions in real time.
2. Company headcount
Another important HR metric is company headcount, which measures the number of people who work for your company.
Don't forget to account for full-time employees, part-time contractors, and everything in between.
Total headcount is an important metric to track because you use it to calculate many other rates and ratios for HR.
3. Compensation data
Compensation data is an HR metric that measures how much people are compensated within your company.
Part of your compensation data should include how your compensation packages compare to others in the market. This data is extremely important since so much of an employees' satisfaction can rely on having fair compensation.
Thankfully, with the help of HRIS system, you can aggregate compensation and individual compensation packages for different roles. Piece of cake.
4. Productivity rates
Measuring the work and performance of your employees is a critical aspect of managing your organization, as it helps you identify opportunities for improvement and make informed decisions to optimize your operations. These operations can be related to the automation of tasks, such as replacing online operators with chatbots, to make work as easy as possible for employees, and others.
Productivity rates are especially important because they clearly indicate how effective your operations are in achieving your goals.
By keeping track of productivity rates, you can:
- Gain insight into the efficiency of your processes
- Identify areas where you may be losing time or resources
- Evaluate the overall effectiveness of your workforce
And not to mention that tracking productivity metrics can help you identify high-performing employees and those who may be struggling to meet their targets.
For example, if you are the HR manager in a transportation and logistics company, it'd be useful to have fleet management software to help you track the company's drivers and know if they show up on time. They might need a training refresher if they are always 20–30 minutes late.
5. Spans and layers data
Tracking data related to spans and layers is extremely important for businesses, especially those planning to grow and scale.
If you're unfamiliar, spans and layers are the structure of your organization. "Layers" describes the company's hierarchy, and "spans" describes the people at each level of the hierarchy.
Keeping track of how resources and personnel are distributed throughout the organization will help you make informed decisions across the board.
6. Diversity rates
Tracking diversity rates is crucial to building a diverse and inclusive workforce. It enables your organization to ensure that it employs team members from a broad range of backgrounds and cultures, which can bring various unique perspectives and experiences to the table.
And when you actively track diversity rates, it keeps you honest about the effectiveness of your diversity and inclusion initiatives.
You can identify areas of success and potential challenges and develop strategies to improve your organization's ability to attract and retain a diverse workforce.
7. Turnover rate
The voluntary turnover rate measures the rate of employees that willingly leave your company. Whether you own a regional auto dealership or a boutique investing website, a high turnover rate will cost your company money.
And not to mention that high turnover can be time-consuming for managers, lower productivity, and significantly reduce employee morale.
People have lives outside of work. And they need to be taken care of.
8. Manager effectiveness
Manager effectiveness is a critical metric for any organization to track, as it directly impacts the productivity and engagement of employees. Why?
Effective managers can motivate and empower their teams to perform at their best. They can also identify and address issues hindering productivity.
One way to support manager effectiveness is to provide them with the tools and resources they need to succeed. For example, organizations may use a board minutes template to help ensure that their meetings are productive and efficient.
Managers are leaders. Without good leaders, your organization will suffer. Tracking manager effectiveness ensures effective leadership and prompt resolution of productivity issues within your teams.
9. Talent acquisition costs
Have you ever wondered how much it really costs to bring new talent into your organization? Talent acquisition costs include anything from job postings and recruiting events to assessments and background checks.
By keeping track of these costs, you can better understand how much money you're spending on recruitment and where you might be able to save some cash.
Carefully comparing and assessing the time, effort, and expense of onboarding a new employee with your turnover rate is important because, if the two aren't balanced, it can cause serious problems down the road.
10. Education and training costs
In addition to talent acquisition costs, your HR team should consider the cost of education and training that comes with onboarding new employees and providing continuing education for existing employees.
Having a handle on the costs of education and training will provide a clear picture of what'll be required when hiring externally or internally for open roles.
11. Employee engagement data
Quiet quitting made its mark in the workplace in 2022. Will it bleed into 2023? Only time will tell. But that's why keeping an eye on your engagement data is crucial.
By tracking how engaged and committed your employees are to their work, you can identify any issues that might be leading to disengagement and take steps to address them.
For instance, if you're noticing a trend of low engagement levels among your employees, it might be a sign that they're feeling disconnected or unfulfilled in their roles.
Send out pulse surveys using the right HR software, pinpoint the root causes, and develop targeted strategies to re-engage your employees.
Start tracking HR metrics today
As we head into the second quarter of 2023, it's clear that the workplace is evolving faster than ever.
From the rise of remote work to the impact of quiet quitting, you must prepare to adapt to new realities and stay ahead of emerging trends. That's where HRIS software becomes your overnight best friend.
With HRIS software, you can gain valuable insights into your workforce. The result? Data-driven decisions to improve performance and engagement, all in a streamlined process.
Whether you're a small startup or a large corporation, investing in HRIS software is essential for staying competitive and driving success in the years ahead.
Are you ready to optimize your company's efforts by tracking important HR metrics?
About the author
Ian David started his career in brick-and-mortar retail management, which quickly included eCommerce and digital marketing as well. He is an avid reader and a self-taught expert in SEO and content marketing. He writes for several publications on a variety of digital marketing topics. Recently, his focus has been on using influencer and affiliate marketing to drive more conversions.