When organizations lose employees, it can be costly—both in terms of direct business growth and softer costs, like employee wellbeing, engagement, and productivity. The cost of employee attrition becomes an even greater existential risk when you consider the additional impacts of an understaffed and unstable workforce. 

Because employee attrition has a direct, measurable impact on revenue and business growth, understanding exactly what employee attrition is, its true costs, and how to reduce it is crucial for your business’ success. 

In this article, we’ll help you understand the key HR metrics for assessing contributors to employee attrition, and how you can help minimize them. These are the metrics our research at Praisidio has shown to be most critical for driving down costs and driving up productivity. They aren’t necessarily the metrics that first come to mind. 

From our experience, many companies blindly monitor what’s accessible, like survey data, but miss out on more valuable data they already have at their disposal. The metrics we discuss in this article are those that you already have, but are unlikely to be tapping into. 

The 8 HR metrics to start monitoring now

These are the metrics every corporation needs to monitor:

1. Turnover
2. Attrition
3. Workload
4. Maker time
5. Connection
6. Recognition
7. Growth
8. Compensation

Of these 8 HR metrics, the easiest to monitor are turnover and attrition. These are metrics you can’t avoid. They also give you a baseline for the success of your retention activities. 

The other metrics in this list can be harder to monitor but are of critical importance. They form the foundation upon which you can make a meaningful and well-informed retention plan.

Why these 8 HR metrics matter the most

Employee turnover

Employee turnover is when an employee leaves a company, but the company is prepared and able to readily refill the position. Turnover only applies if and when you can very quickly turn the position over to a new employee (hence the term). 

If a company intends to fill an open position but doesn’t succeed, this is defined as employee attrition. 

Attrition

Employee attrition is the gradual reduction in the number of employees working for a company.

An employee turnover rate higher than the employee hiring rate means an overall reduction of your workforce. 

Employee attrition equates to a lot of work and reduced efficiency for businesses, making it a very expensive problem of around $1 trillion per year in the US alone.

Calculating attrition is relatively straightforward:

Employee attritions in a given time period / ([beginning time period headcount + ending period headcount] /2) * 100

We recommend calculating your attrition rate on a quarterly basis so that you can reliably spot trends and react in a timely way. Monthly calculations are too frequent, giving fluctuations that aren’t necessarily reflective of trends. Annual calculations are not frequent enough, allowing attrition to run unchecked for lengthy periods. 

Workload

Excessive workloads can contribute to feelings of employee burnout—a chronic sense of mental and emotional exhaustion that can be severe enough to cause physical exhaustion. Burnout is much worse than temporarily feeling worn out from an intense project: its chronic nature has a big impact on employee attrition. Burned-out employees typically feel pessimistic, out of control, and hopeless, and are unlikely to stay in jobs that cause these feelings. 

Yet employee burnout itself is difficult to observe because not everyone who feels burnt out will admit to it. Fortunately, there are quantifiable indicators of employee burnout that can help you identify employees who are experiencing burnout before it’s too late. These include increasing out-of-office days for employees who typically work in the office, missing work more frequently (which can include increasing sick days, as well as recurring lateness), unmanageable weekly meeting loads in the form of excessive or poorly scheduled meetings, and excessive project loads that are too much for one person to handle. 

Workload metrics to monitor:

• Out-of-office days
• Weekly meeting load
• Absent days
• Number of projects

Connection

Employees who feel disconnected from their work and their peers are much more likely to quit than those who feel personally and professionally engaged. Working relationships need to be fostered and maintained, and your organization should invest in building strong relationships across teams and departments. 

Similar to employee burnout, a feeling of disconnection can be difficult to spot through employee surveys. Instead, quantifiable indicators can give you a clearer picture of whether or not your workforce is developing strong relationships. Try to be aware of changes to meeting frequencies, more or less manager or skip-level meetings, or a complete lack of meetings. These are strong signals that something may be wrong.

Managers are also a huge piece of the employee experience. When a good manager quits, their team will often follow suit soon after. Hiring a good manager can mitigate this sort of attrition, but good managers can be difficult to find. If you start to notice frequent management changes and high attrition rates at the management level, unstable employee retention rates at the lower staff levels are likely close behind.

Collaborator and peer attrition can also indicate how great a threat employee attrition may be. The people an employee works with are a huge part of the employee experience, and employees often find another job when the people they work with leave. It’s similar to the impact of manager attrition, but the effects of peer and collaborator attrition compound with manager attrition. If a manager leaves, it can cause one or two of that manager’s team to quit; the combination of manager turnover and peer attrition then causes more people on the team to leave. Intervene as early as possible if your employee attrition rates start to rise. 

Connection metrics to monitor:

• Skip-level 1:1s
• Manager attrition
• Meetings with peers
• Number of manager changes
• Manager 1:1s
• Collaborator attrition
• Peer attrition

Maker Time

Creative workers with high-focus roles require “Maker Time”—long, uninterrupted blocks of time reserved for cognitively demanding jobs. Makers can’t produce anything of quality with meetings every couple of hours, as they distract from core tasks, often leading to burnout. Distractions negatively affect focus and productivity, and cost businesses a lot. According to research, 46% of HR leaders say employee burnout is responsible for up to half (20% to 50%, specifically) of annual workforce turnover. 

Maker time metrics to monitor:

• Meeting load and frequency
• Meeting-free calendar blocks

Recognition

A lack of employee recognition can also contribute to employee turnover and attrition. Businesses often fail to give recognition because they believe it should happen organically, or that people know when they’ve done a good job—but this often isn’t the case. Making people feel recognized for their work requires an intentional effort to provide praise and rewards they deserve. Tangible rewards such as peer bonuses are valuable in minimizing employee dissatisfaction. 

Recognition metrics to monitor:

• Peer bonuses given

Compensation

Compensation is a common reason for employee attrition. Employees can easily determine if they could make more money by switching jobs. Companies understand this, but they often fail to track metrics that give a good assessment of how well their workforce is compensated, and precise information about who’s most likely to quit because of pay disparities.

Compensation can also be a source of workplace toxicity—and resultant attrition—when inequities are known to exist. If pay gaps based on gender, race, or ethnicity across roles or cohorts exist at your company, you’re at risk of losing talent that would be discouraged upon learning this. 

The best predictors of pay-related employee attrition are comparative metrics. People tend to think in comparative terms, and feel most unfairly compensated when comparing against other professionals in their industry or organization. 

Position in range shows how much more an employee could be paid before reaching the maximum market salary rate for that position, and identifies the employees who are being underpaid, relative to their peers. This indicates who’s most likely to quit because they feel unfairly compensated. 

External compa ratio compares an employee’s pay to the midpoint of the salary range of the market for that position and quantifies how fairly an employee is being compensated relative to their peers in the industry. An external compa ratio of less than 1.0 indicates that an employee is paid less than the midpoint of the salary range for their position, and is probably at a higher risk of quitting to find a better-paying job. 

Internal compa ratio is calculated in the same way as external compa ratio, and an internal compa ratio of less than 1.0 indicates an increased risk of salary-based attrition. However, internal compa ratio measures an employee’s salary against the midpoint of the salary range for equivalent positions within your company. Checking your internal compa ratio is important because an employee is still being unfairly compensated if they’re making less than others in equivalent positions in your company, even if their salary is high in comparison to the market rate.

Compensation metrics to monitor:

• Pay gaps based on gender, race, or ethnicity across roles or cohorts
• Position in range
• External compa ratio
• Internal compa ratio
• Pay raises

Growth

Employees, especially your most productive ones, want opportunities for career advancement. If they don’t see a path for career advancement in your company, they’re going to look for opportunities elsewhere.

One way to gauge opportunities for employee advancement is by looking at employees’ time spent in their roles. Greater time in a role might seem like a good thing, but being in the same role for a long time can indicate that there’s not much opportunity for an employee to move up in the organization, or they’re not getting the skills they need to advance into a new position. Time spent in the same role can indicate that an employee is stagnating in their career and may be looking for external opportunities. 

The number of past job changes can also help indicate how likely it is that an employee will jump ship to advance their career. On its own, the number of job changes is a slightly more informative data point than the time spent in a role, because it’s more closely tied to the employee’s behavior.

Tenure with your company gives even more insight into employee opportunities for advancement. If an employee has been with your company for a long time, in the same role, that’s a strong indicator that the employee may not have a clear path to advancement within your organization. By combining tenure, time in role, and the number of job changes, it’s possible to precisely predict which employees are most likely to leave for a better-paying or more challenging role in a different company. 

Growth metrics to monitor:

• Time in role
• Number of job changes
• Length of tenure

Monitoring HR metrics in your organization

If you’re hesitant about moving beyond surveys and monitoring the HR metrics we discussed, it’s worth keeping in mind that the cost of turnover and attrition will always be greater than monitoring. 

To retain employees and prevent costs associated with departure, it’s essential to proactively monitor the right metrics. Those mentioned in this article are a great place to start. 

Praisidio makes tracking, and analyzing your key HR metrics simple, giving you the necessary insights to proactively retain employees and prevent attrition. Praisidio identifies and expose hidden risks and, in turn, gives you actionable workflows to retain at-risk employees.

Praisidio has helped others reduce workforce attrition by at least 20% by turning their HR metrics into easy-to-understand insights. Find out how Praisidio can help you monitor and analyze the right HR metrics for your company. Book a demo today. 

HR metrics FAQ

What are HR metrics?

HR metrics are indicators that allow HR and leadership to understand their human capital and predict risks. Real-time HR metrics are becoming the norm for decision making and planning.

What is the difference between HR metrics and HR Analytics?

The line is fuzzy between the two. Strictly speaking, HR metrics relate to signs of performance by an HR team, while analytics are the drivers of those performance metrics. Today, those two ideas are blurred, as HR metrics can refer to both.

What are examples of HR metrics?

Attrition, turnover, workload, connection, maker time, recognition, and compensation are examples of HR metrics that every organization needs to monitor. They are core to retaining employees, which is the biggest financial impact HR can make.

What is an HR metrics dashboard?

An HR metrics dashboard is a tool to monitor and visualize key HR metrics and analytics. A useful dashboard is easy to interpret without training and shows high-level metrics, their causes, and what actions the HR team needs to take to solve the problems identified.

What is the number one metric to monitor?

Attrition is the number one HR metric to monitor because it’s the most expensive business cost that HR can easily and directly influence.

Why are HR metrics important?

HR metrics help you remain alert to the factors that influence employee attrition, so that you can help minimize it.