23 HR metrics that help you hire better, retain longer, perform smarter

As organisations increasingly rely on data to make strategic decisions, Human Resources (HR) departments are expected to lead with insight. HR metrics—quantifiable measurements used to gauge workforce performance and the impact of HR initiatives—are now indispensable to running a modern, responsive, and effective people strategy.

According to a report by McKinsey & Company, companies that use people analytics effectively are 2.6 times more likely to outperform their peers in terms of talent outcomes and 3.1 times more likely to outperform in terms of organisational performance.

With this in mind, here are the 23 most important HR metrics that every business, regardless of size or industry, should be tracking.

1. Employee Turnover Rate

The percentage of employees who leave the company in a given period.

Why it matters: High turnover leads to recruitment costs, productivity losses, and morale issues. It can also signal deeper cultural problems. In India, IT and retail sectors see annual turnover rates of over 20%, according to TeamLease Services. Tracking this metric helps identify departments or locations with high attrition and implement targeted retention strategies.

Formula: (Number of exits / Average number of employees) × 100

2. Time to Hire

The number of days between job posting and offer acceptance.

Why it matters: A prolonged hiring time means longer periods with unfilled roles, affecting productivity and team morale. According to LinkedIn India, the average time to hire in tech roles is 45 days, while roles in BFSI average around 38 days. Shortening this metric through automation and better candidate pipelines can enhance competitiveness.

3. Cost per Hire

Total cost incurred to recruit a new employee.

Includes: Advertising, agency fees, recruiter salaries, onboarding, and background checks.

Why it matters: Knowing the cost of acquiring talent enables better budget planning and ROI evaluation. It is estimated the global average at $4,700, but Indian companies often manage more economically, with reports suggesting ₹60,000–₹1,00,000 per hire depending on the role and seniority.

4. Offer Acceptance Rate

Ratio of offers accepted to offers extended.

Formula: (Number of offers accepted / Total offers made) × 100

Why it matters: A low offer acceptance rate indicates poor employer branding or mismatched expectations. India’s average hovers around 72%, but top employers often exceed 90%, according to Naukri Insights. Improving this metric may require rethinking compensation packages or candidate experience.

5. Retention Rate

Percentage of employees staying during a specific time frame.

Why it matters: High retention supports knowledge continuity, reduces recruitment cost, and boosts morale. In India, companies with strong L&D frameworks report 20% higher retention. This metric is especially important in high-churn industries.

6. Absenteeism Rate

Days lost due to unscheduled absences as a percentage of total working days.

Why it matters: High absenteeism often signals employee disengagement or poor working conditions. According to a 2023 Aon India survey, average absenteeism stood at 5.2%, but spiked during flu and COVID waves.

Formula: (Unscheduled leave days / Total working days) × 100

7. Training ROI

Effectiveness of L&D programs in terms of cost-benefit.

Formula: (Benefits from training – Training cost) / Training cost × 100

Why it matters: It quantifies the value of learning initiatives. Firms with digital L&D platforms report 24% faster upskilling, according to NASSCOM’s FutureSkills Report. Measuring ROI helps refine content, formats, and focus areas.

8. Diversity Hiring Ratio

Proportion of hires from underrepresented groups.

Why it matters: A higher ratio improves innovation, representation, and compliance with global DEI standards. In India, leading firms are committing to gender diversity targets like 50:50 hiring in management roles. Tata Steel and Infosys are examples of companies with strong public commitments.

9. Employee Engagement Score

A composite score from employee feedback on motivation, satisfaction, and purpose.

Why it matters: Engagement drives productivity, loyalty, and innovation. According to Kincentric India’s 2023 report, only 37% of Indian employees are actively engaged. Regular pulse surveys help in tracking this metric.

10. Internal Promotion Rate

Percentage of roles filled internally versus externally.

Why it matters: A high rate indicates healthy talent development. Industry benchmark is around 25–35%. It reduces recruitment costs and fosters employee growth.

11. New Hire Turnover Rate

Percentage of new hires who leave within 3–6 months.

Why it matters: Reflects quality of hire and onboarding effectiveness. India’s IT sector sees 12–18% early exits. Addressing this involves better job previews and mentoring.

12. Employee Net Promoter Score (eNPS)

Measures employee loyalty through a single question: “How likely are you to recommend this company as a workplace?”

Formula: % Promoters – % Detractors

Why it matters: Indicates employer brand strength. Great Place to Work India suggests that top 100 companies often score above +40.

13. HR-to-Employee Ratio

Number of HR staff per 100 employees.

Why it matters: Reflects HR efficiency and scalability. In India, the average HR ratio is 1.2:100, while digital-first companies operate efficiently with 0.8:100, according to People Matters research.

14. Time to Productivity

Time taken by new hires to reach expected performance levels.

Why it matters: Faster ramp-up means quicker ROI on hiring. Effective onboarding can reduce this time by 40–60%, says Brandon Hall India.

15. Compliance Rate

Proportion of employees completing mandatory training and policies.

Why it matters: Non-compliance may lead to legal risk and reputational damage. Important for industries like pharma, BFSI, and manufacturing. A rate below 95% is considered risky.

16. Workforce Productivity

Output per employee over a specific time frame.

Why it matters: Productivity drives profitability. This can be measured in revenue, targets met, or units produced. It’s now a boardroom concern, especially post-pandemic.

17. Benefits Utilisation Rate

Percentage of employees availing of offered benefits.

Why it matters: Low usage can indicate irrelevant or poorly communicated benefits. Health and wellness perks saw a 300% usage surge during and after COVID, says MediBuddy.

18. Job Satisfaction Score

Self-reported employee satisfaction from surveys or external platforms like Glassdoor.

Why it matters: Satisfaction impacts retention, engagement, and referrals. In India, average satisfaction scores across industries lie between 3.5–4.0.

19. Learning Participation Rate

Employees actively engaging in upskilling and reskilling programs.

Why it matters: Signals an evolving workforce. A high rate (>70%) shows learning is embedded in culture. Infosys, Wipro, and Accenture lead in this area.

20. Manager Effectiveness Score

Direct-report feedback on people management, communication, and empathy.

Why it matters: Poor managers account for 70% variance in team engagement, according to Gallup. Regular 360-degree feedback helps identify development needs.

21. Voluntary vs Involuntary Attrition

Differentiates resignations (voluntary) from layoffs or terminations (involuntary).

Why it matters: Helps diagnose root causes of exits. India Inc saw 10–15% involuntary attrition post-pandemic. A high voluntary rate may indicate cultural or management issues.

22. Hiring Manager Satisfaction

Measures whether hiring managers are satisfied with the recruitment process and candidate quality.

Why it matters: Shows alignment between HR and business. A score above 85% indicates effective collaboration and talent delivery.

23. Succession Planning Coverage

Percentage of key roles with ready or near-ready successors.

Why it matters: Leadership gaps pose strategic risks. HBR reports only 35% of Indian companies have robust succession plans. A well-tracked metric ensures future continuity.

Making Metrics Actionable

Tracking these metrics is just the first step. The real value lies in:

• Benchmarking against industry standards.

• Building live dashboards using HR tech platforms.

• Driving action through storytelling and leadership buy-in

A PwC India report revealed that 88% of high-performing HR functions rely on analytics to guide talent strategies. The best-performing companies not only measure—they act. As business environments become more volatile, the HR function's ability to interpret and act on workforce data will determine how agile and resilient the organisation becomes.