13 People analytics metrics to assess your HR department's performance

Is your HR department monitoring people analytics metrics to evaluate and demonstrate its value? Start today with these industry-standard metrics.

People Analytics

At its core, your human resource department is responsible for hiring and retaining talented employees. However, filling positions with employees means little if you’re not providing value to your organization—or if leadership and management can’t tell if you are.  This is why HR managers like yourself need to be able to track, optimize and share the effectiveness of your recruitment and work initiatives. People analytics metrics offer this visibility into your HR department’s and organization’s health. 

How HR can use people analytics metrics

When used correctly, people analytics metrics help you achieve large-scale goals, like reducing employee turnover and increasing employee engagement, which lead to a more productive, successful business. 

However, you first need to identify what your business goals are. To guide you, we’ve included a list of five common HR priorities in 2022:

  1. Increase job candidate quality
  2. Retain employees during the Great Resignation
  3. Accurately evaluate remote employee performance and ROI
  4. Measure remote and hybrid organizational effectiveness
  5. Deploy and enhance technology to streamline remote work processes

Once you have outlined your goals and strategy for achieving them, you can then use the appropriate metrics to assess and quantify the business outcomes. 

13 People analytics metrics to measure you HR department’s and organization’s success

So which people analytics metrics matter? That will depend on your organization's goals, but there are standard metrics that are helpful for every HR department to keep a pulse on their workforce. Here are the top 13 people analytics metrics you should start with when assessing your HR department's health.

1. Time to hire

Time to hire is measured in days. This is the time that elapses from when a person applies for a job to the time the job offer is accepted. This metric reflects how efficient a company is in hiring candidates and an average benchmark is 42 days across all industries. However, the time to hire should be made as short as possible because strong candidates are in high demand and likely to drop out during the wait. 

To improve this metric, HR can find ways to streamline the recruitment process. Methods of doing this could be as simple as: 

  • Implementing an automated pre-screening survey to more accurately choose job applicants to move forward with
  • Planning fewer but higher-quality interviews 
  • And even hiring a recruitment manager (this is especially helpful if your recruitment process is currently being conducted by your current, busy employees)

2. Labor turnover

Labor turnover measures a company’s ability to retain its employees. There are two types of labor turnover: voluntary and involuntary. By monitoring this metric, you can learn about your organization’s voluntary turnover rate, which refers to when an employee quits their role  and/or accepts another job by choice. 

Labor turnover is calculated as the ratio of existing employees to the number of employees in the payroll within a specific period. To decrease labor turnover, you can start by ensuring that you’re hiring the right people based on skill, experience and culture fit. Beyond offering current employees compensation and benefits packages that keep up with market standards, you can further prevent turnover with these key employee retention strategies

3. Employee tenure

On the opposite side of the coin, employee tenure is how long employees in the payroll stay with their company. Employee tenure indicates the level of satisfaction of your workforce and should be monitored at all levels, within senior, associate and entry-level positions.

Fortunately, people analytics metrics can give you good indicators of job satisfaction. Are employees working on meaningful work or being inundated by tedious admin work and long meetings? Are they hitting deadlines and delivering results, or struggling with poor training, an unclear onboarding process and inefficient digital processes? This workforce data can paint a picture of how happy employees are at work. 

Of course, a company-wide anonymous survey can also answer this question. However, answers may vary depending on survey response rates, the type of day the employee is having and fear of giving information that will reveal their identity. 

4. Absence rate

Most human resource managers aim at reducing unscheduled absence days in the company. An increase in absence rates can even be an indication of an unfavorable work environment. Though managers cannot do away with absenteeism from work, it is good to ensure that the absence rate is constant. An annual absence rate between one to two percent is considered normal.

5. Annual leave

Annual leave is necessary for many employees. Taking the occasional time off work helps employees recharge so they can come back to work with refreshed productivity and engagement. For this reason, as an HR manager, you should no​​te annual leave rates and who’s not taking advantage of them. With this people analytics metric, you can encourage employees to take their annual leave and ensure that the number of on-leave days is distributed equally among employees.

6. Revenue per employee

Revenue per employee is calculated by dividing generated revenue by the total number of employees. This people analytics metric measures the efficiency of your entire workforce in generating revenue and is an indicator of workforce quality. 

Much of this metric will depend on industry. To determine what the right revenue per employee is for your organization, compare your results to those of your competitors and other companies within your industry. 

The good news is that if your revenue per employee metric is lower than you would like, you can actually use best-in-class people analytics platforms to prioritize and track the completion of high-value work. Label high- and low-priority tasks within the platform to create a single source of truth employees can refer to in order to shift their time towards work that generates a higher ROI.

7. Pay rewards

Your pay packages should be proportional to the amount and value of work done by employees. Compare your payment packages with other companies to determine whether to increase or decrease them. Remember that most employees are strongly motivated by pay rewards, so keep track of when an employee’s job scope or tenure rises to inform your HR department of whether they may be due a pay increase. 

8. Average time for internal promotion

Similarly to pay rewards, the average time since their last promotion has a direct correlation to employees leaving a company. The number of months taken before an employee with high potential is promoted should be minimized. By promoting employees internally, you encourage them to continue doing their best.

9. Engagement and job satisfaction

To foster a work environment that is conducive to employee engagement and job satisfaction, people analytics metrics can identify employee sentiment. This metric is measured by if employees are meeting their goals, pushing forward projects and enjoying a workload they feel comfortable with based on their baseline.

Alternatively, you can conduct a staff survey to learn more about how the employees feel about their job. Low absenteeism and labor turnover rates are also indicators that employees are satisfied at work.

10. Diversity

Today, many organizations are rightly striving to hire a workforce of diverse talents, educational backgrounds, ethnicities and genders. A diverse team possesses a larger pool of skills that are vital in achieving the goals of the company. Innovation, creativity and decision-making are just some of the skills that are enhanced in a diverse workforce. 

You can further enhance diversity initiatives with people analytics metrics. By referring to your people analytics platform, you can tell if employees are receiving higher workloads, more low-priority tasks and blockers, or any potential unfair treatment that could be happening because of bias. 

You can also see if minorities or employees of a certain group are experiencing workplace anxiety for the same reasons. Of course, this information should be handled with the utmost care to ensure that your workplace is continuously striving to remove bias from management and work processes, all with the goal to provide equal opportunity and treatment for all.

11. Performance by cohort

It’s costly to retrain underperforming employees. Therefore, it is necessary to keep track of employee performance by department, team and seniority level. Evaluating performance by cohort allows you to have a deeper insight into how each group is being affected by the workplace, and how their corresponding behaviors affect the workplace. 

You can further compare employee performance within a cohort to see if workloads should be redistributed or to inform hiring and management processes. 

12. Improvements in new hire performance

You expect the performance of every new hire to improve with time. The success of new hires in the company shows the quality of the recruitment and onboarding process. Improvements in new hires’ performance are also an indicator of the effectiveness of your company’s training. Continuous improvements of new hires show that the HR department is hiring the right candidates and offering a clear onboarding process.

13. Overtime expense

Working overtime hours has an impact on other people analytics metrics. Long overtime hours are usually followed by high rates of absenteeism. Working on overtime hours also drives employee turnover. Monitor overtime expenses to learn when they should be reduced by outsourcing certain tasks, automating or digitizing work processes or hiring additional staff.

Get the people analytics metrics you need to build a thriving remote workplace

Assessing people analytics metrics is crucial in maintaining visibility of the remote workplace. However, to fully connect your remote or hybrid teams with people analytics, you need to find the right partner. Pattyrn is the best people analytics platform to help HR and business leaders like yourself attract and retain talented employees no matter your workplace. Contact us today to avoid losing top talent to an outdated employee experience.

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