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HR professionals no longer rely solely on gut feelings and intuition to make crucial decisions about their workforce. Instead, they use HR software to gather and analyse essential metrics that drive strategic HR decisions. But the question remains: What metrics should you track with HR software? This comprehensive guide will delve deep into HR metrics, helping you understand which ones are crucial for optimising your HR strategy.

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The Importance of HR Metrics

Before we dive into the specific metrics, it's essential to grasp why tracking HR metrics is vital. HR metrics provide invaluable insights into your organisation's human capital, enabling data-backed decision-making. Whether you're a small startup or a large multinational corporation, here's why HR metrics matter:

  1. Workforce Planning

HR metrics assist in forecasting future staffing needs. By analyzing historical data, you can predict when and where to hire new talent or redistribute existing resources.

  1. Employee Engagement

Measuring employee engagement while using our HRMS software in India helps you identify improvement areas. Engaged employees are more productive in the company.

  1. Cost Management

Tracking metrics related to recruitment, turnover, and training costs can help you identify areas where cost-saving measures can be implemented without reducing the quality of your workforce.

  1. Performance Management

Metrics tied to employee performance can pinpoint top performers, allowing you to reward and retain talent effectively. They also highlight areas where additional training or support may be required.

  1. Compliance

Ensuring your organisation adheres to labour laws and regulations is critical. HR metrics can help you monitor compliance and mitigate legal risks.

Now that we've established the importance of HR metrics let's delve into the specific ones you should be tracking.

Key HR Metrics to Track

  1. Employee Turnover Rate

Employee turnover rates measure the percentage of employees who take an exit from the organisation within a specified time frame, typically a year. High turnover rates can indicate issues within the workplace, such as low job satisfaction or poor management.

  1. Time-to-Hire

Time-to-hire tracks how long it takes to fill a vacant position, from posting the job to making the offer. Reducing this time can help you secure top talent before your competitors.

  1. Employee Satisfaction Score

Regular employee satisfaction surveys can provide an overall score of your employees' content with their roles and the company. This metric can reveal areas that need improvement.

  1. Training and Development ROI

Calculating the return on investment for training and development programs helps assess their effectiveness. It ensures that the resources invested in employee growth yield positive results.

  1. Absenteeism Rate

The absenteeism rate shows the average number of days employees are absent. High absenteeism can disrupt productivity and indicate underlying issues.

  1. Revenue per Employee

This metric calculates the revenue generated per employee. It's a key indicator of workforce efficiency and can help you optimise staffing levels.

  1. Diversity and Inclusion Metrics

Track metrics related to diversity and inclusion, such as the percentage of women in leadership roles or the diversity of new hires. Promoting diversity can lead to more innovative and inclusive workplace cultures.

  1. Compensation Competitiveness

Ensure your employee compensation packages are competitive by comparing them to industry standards. Compensation competitiveness metrics can help you attract and retain top talent.

  1. Performance Appraisal Scores

Regular performance appraisals should be tracked to ensure employees meet their goals and expectations. Low scores may necessitate additional support or training.

  1. HR Software Adoption Rate

Monitor how effectively your HR software is being used. High adoption rates ensure you get the most out of your technology investments.

  1. Employee Net Promoter Score (eNPS)

Similar to the customer Net Promoter Score, the eNPS measures how likely employees or staff members are to recommend your company as a favourable place to work. A high eNPS indicates a positive workplace culture.

  1. Benefits Utilisation

Track how often employees utilise your benefits, such as healthcare, retirement plans, and wellness programs. This can help you tailor your benefits packages to employee needs.

  1. Cost-Per-Hire

Cost-per-hire calculates the expenses associated with hiring a new employee. Reducing this cost can lead to substantial savings over time.

  1. Leadership Pipeline Strength

Assess the strength of your leadership pipeline by tracking the readiness of employees to step into leadership roles when needed.

  1. Overtime Rate

High overtime rates can indicate overworked employees or inefficiencies in workforce management.

  1. Employee Referral Rate

Employee referrals are often a valuable source of high-quality candidates. Track the percentage of new hires that come from employee referrals.

  1. Time-to-Productivity

Measure how long it takes for new hires to reach full productivity. A shorter time-to-productivity can positively impact your organisation's bottom line.

  1. Workforce Skills Gap

Identify areas where your workforce lacks essential skills and invest in training and development to bridge these gaps.

  1. Succession Planning Effectiveness

Evaluate how well your succession planning strategies are working by tracking the readiness of potential successors for key roles.

  1. Employee Wellbeing

Metrics related to employee wellbeing, such as stress levels and work-life balance, can help you create a healthier and more productive workplace.

  1. HR Compliance

Ensure that your HR practices comply with all relevant laws and regulations. Non-compliance can result in legal issues and fines.

  1. HR Software Security

Track the security of your HR software to protect sensitive employee data from breaches and cyberattacks.

  1. Employee Growth

Monitor the professional growth and development of your employees. This can lead to better and improved job satisfaction and employee retention.

  1. Employee Benefits Satisfaction

Regularly survey employees to gauge their satisfaction with the benefits your organisation provides.

  1. HR Software Feedback

Collect feedback from HR professionals using the software to identify areas for improvement and ensure the software aligns with your organisation's needs.


Tracking HR metrics with the right HR software can be a game-changer for your organisation. It provides valuable insights that drive informed decisions, boost employee satisfaction, and ultimately contribute to your company's success. Remember, the key is to regularly analyse and act on these metrics to continually improve your HR strategy.

So, what metrics should you track with HR software? The answer is clear: the ones most matter to your organisation's goals and values.

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Q: How often should I track these HR metrics?

A: It's advisable to track these metrics regularly, at least quarterly, to stay informed about your workforce's health and make timely adjustments.

Q: Are there HR software solutions that can automate metric tracking?

A: Many HR software solutions offer automated tracking and reporting of these metrics, saving you time and effort.

Q: Can small businesses benefit from tracking HR metrics?

A: Absolutely. Tracking HR metrics is beneficial for organisations of all sizes. It helps small businesses make informed decisions about their workforce.

Q: What are the common challenges in HR metric tracking?

A: Challenges may include data accuracy, privacy concerns, and selecting the most relevant metrics for your organisation.

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