With the uncertainty of the last three years and a fear of a recession, many businesses are still optimistic about growing their workforce. ELMO’s HR Industry Benchmark Report 2023, found over three-quarters of survey respondents expect their workforce to increase with another 15% expecting their workforce will remain the same and a mere 7% predicting a decline. With these positive signs that many businesses are looking to grow, it highlights the need to maximise an organisation’s most important resource: its people.

HR professionals use a range of metrics to measure the effectiveness of their programs and initiatives. These metrics, also known as HR metrics, provide valuable insights into how well HR is performing and how it can be improved. HR metrics can be powerful tools for determining the value and impact of the effectiveness of HR initiatives. In fact, HR metrics can be very useful in making improvements to motivate employees, reduce unnecessary HR costs, improve absenteeism, and boost employee satisfaction and performance goals.

Unfortunately, HR metrics have often been overlooked or underutilised in recent years in businesses. With the optimism of expected growth in our workforce, now is a good time to reconsider or start using HR metrics. With this data, you can then spot where best to improve efficiencies, recruitment, retention, training, or productivity.


What are HR Metrics?

HR metrics are a set of measurements that help organisations track the performance of their human resources function. They are used to measure and evaluate a variety of HR processes, including recruitment, retention, training, development, compensation, and benefits. HR metrics can be quantitative (such as the number of employees hired) or qualitative (such as employee engagement levels).


Why are HR Metrics Important?

HR metrics are important because they provide the ability to drive decisions based on effective data about their human resources function. By tracking HR metrics, organisations can identify areas of strengths and weaknesses in the HR processes and programs. HR metrics can also help organisations identify potential problems before they become major issues, allowing them to take corrective action early on.


How to use HR metrics:

Using HR metrics effectively requires being strategic and choosing HR metrics that will truly drive your business towards your goals. To do this, organisations should follow these steps:

  1. Identify the HR metrics that are most relevant to your organisation and your goals.
  2. Collect and analyse data on these metrics regularly.
  3. Compare your metrics against industry benchmarks or to your organisation’s historical data to identify areas for improvement or potential problem areas.


Common HR metrics to use are:

There are many types of HR metrics to track. Some of the most common HR metrics include:

  1. Performance

Identify your top performers and know who in your business is meeting their Key Performance Indicators (KPIs). These top performers can then be used as benchmarks when hiring new employees to build a productive and efficient workforce.

  1. Talent acquisition

We all know that a bad hire can cost a lot of money. Utilising talent acquisition metrics such as new hire failure rate, quality of hire, diversity hires, and cost per hire will help your business save time, find the right people for the job, and reduce costs.

  1. Employee Engagement

Seek research has found that 70% of employees won’t consider leaving if they are engaged at work. Understanding how engaged, committed, motivated, and connected your employees feel is critical for ensuring you have the right people in your business. Gallup research has shown that high levels of employee engagement can give your business a competitive advantage through increased productivity and profitability with better customer relationships and a safer environment. HR metrics such as engagement rate, employee turnover rate, net promotor score (NPS), and absenteeism.

  1. Management/Leadership –

With 32% of people driven to leave their jobs due to management/leadership according to research conducted by Seek, it is important to measure the effectiveness of your Managers and Leaders. Effective Managers and Leaders create better supportive environments and enable employees to grow and perform. HR metrics to track are manager engagement score, employees promoted, and high-performer resignation rate.

  1. Learning

Many employees want to learn. In fact, according to seek research younger staff are motivated to leave when there is a lack of development opportunities with many looking for professional development programs. Facilitating learning at work helps create a highly skilled workforce and improves engagement and performance. Key HR metrics that track learning include internal promotions, training completion rate, pass/fail rate of assessments, and impact of training solutions on KPIs.



HR metrics are essential for organisations that want to improve their human capital. By tracking key HR metrics, organisations can identify areas of strengths and weaknesses in the HR processes and programs. This information can be used to provide data-driven decisions to improve effectiveness and track the success of your HR. More importantly, when HR metrics are chosen correctly, they help to drive the development and implementation of more effective HR initiatives to reduce unnecessary HR costs, improve productivity, performance, and engagement and can contribute to increasing profits. HR metrics are not just numbers – they are a valuable tool to use in driving positive change and improving organisational success.


About Employment Innovations

Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, workplace safety, legal services, payroll solutions, migration, human resource management and HR software.


The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.