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HR Metrics: 27 Formulas With Examples and a Free Calculator

2026-10-16 21:21
SHORT ANSWER

HR metrics are numbers that show how people management works and what it does for the business: revenue per employee, payroll as a share of revenue, turnover rate, cost per hire, absence rate and others. Each has a simple formula, most of them divide by average headcount, and they only mean something when you compare them with your own previous periods.

Course on this topic: HR Analytics Course: People Analytics Training Online

Most HR teams I meet measure either nothing or everything. Neither works. Below are 27 HR metrics with formulas, grouped the way management reads them: money, people leaving, hiring, and learning and time. Every formula is worked through on one example company, and you can run your own numbers in the free HR metrics calculator right in this article.

What are HR metrics?

HR metrics are numbers that describe the workforce and the results of people management. Some describe the people themselves (headcount, tenure, absence). Others connect people with money (revenue per employee, payroll as a share of revenue). Others measure HR processes (cost per hire, offer acceptance rate, training hours).

Three words get mixed up all the time:
  • Metric — any number you measure, for example voluntary turnover.
  • KPI — a metric you have chosen as a target: current value, target value, deadline and an owner.
  • HR analytics — the work of finding out why a metric moved and what it is connected to in the business.
Metrics show what happened. Analytics explains why. You need the first before you can do the second.

Open the calculator on its own page

The example company used in this article

To keep the formulas concrete, every example below uses the same made-up company for one quarter (three months). These are the default numbers in the calculator above:
  • 118 employees at the start of the quarter, 122 at the end — average headcount 120;
  • revenue $3,600,000, profit $420,000, payroll $1,150,000, total people costs $1,420,000, total expenses $3,180,000;
  • 7 people resigned, 2 were let go, 13 were hired; 940 applicants, 16 offers made, 13 accepted;
  • training spend $18,000, 960 training hours, 410 absence days, 63 working days in the quarter.
Average headcount = (headcount at start + headcount at end) ÷ 2 = (118 + 122) ÷ 2 = 120. Almost every metric divides by this number, so get it right first. Dividing by end-of-period headcount flatters a growing company and punishes a shrinking one.

Money and productivity metrics

  1. Revenue per employee = revenue ÷ average headcount = $3,600,000 ÷ 120 = $30,000 per quarter. If it grows, the company does more with the same people.
  2. Profit per employee = profit ÷ average headcount = $420,000 ÷ 120 = $3,500.
  3. Revenue per FTE = revenue ÷ full-time equivalents = $3,600,000 ÷ 115 = $31,304. Use it when you have many part-time staff.
  4. Average payroll per employee per month = payroll ÷ average headcount ÷ months = $1,150,000 ÷ 120 ÷ 3 = $3,194.
  5. Payroll as % of revenue = payroll ÷ revenue × 100% = 31.9%. If it rises while revenue stays flat, check headcount and bonuses.
  6. People costs as % of expenses = total people costs ÷ total expenses × 100% = $1,420,000 ÷ $3,180,000 = 44.7%.
  7. Human Capital ROI = (revenue − (total expenses − people costs)) ÷ people costs = ($3,600,000 − $1,760,000) ÷ $1,420,000 = 1.3. Above 1 means each dollar invested in people brings back more than a dollar.

Turnover and retention metrics

  1. Turnover rate for the period = leavers ÷ average headcount × 100% = (7 + 2) ÷ 120 = 7.5%.
  2. Annualized turnover = turnover for the period × 12 ÷ months in the period = 7.5% × 12 ÷ 3 = 30%. This is how you compare a quarter with annual figures.
  3. Voluntary turnover, annualized = resignations ÷ average headcount × 12 ÷ months = 7 ÷ 120 × 4 = 23.3%. The main retention metric: managers, pay, workload and growth drive it.
  4. Involuntary turnover, annualized = people let go ÷ average headcount × 12 ÷ months = 6.7%. If it is high, look at hiring and onboarding quality.
  5. Regrettable turnover share = key people who left ÷ all leavers × 100% = 2 ÷ 9 = 22.2%.
  6. Early leavers = people who left within their first year ÷ hires × 100% = 3 ÷ 13 = 23.1%. An approximation, but a strong signal about hiring promises and onboarding.
  7. Turnover cost (estimate) = leavers × average monthly payroll × replacement multiplier = 9 × $3,194 × 6 = $172,500. The multiplier of six monthly salaries is a working assumption; set your own.
For the turnover rate itself in more depth — monthly vs annual, the stability index, nine breakdowns — see Employee Turnover Rate: Formula, Calculator and How to Read the Numbers.
FROM MY PRACTICE · STARLIGHTMEDIA

At STB, when someone left, we asked their manager one question: do you regret that this person is gone? Very often the answer was no.

We had about 30 leavers: roughly a third left at the company's initiative and two thirds resigned. Of those who resigned, we regretted losing only a third. The rest we would not have tried to keep anyway.

Who started the exit tells you little. Measure regrettable turnover — the share of leavers you actually wanted to keep. Often it is a minority, and that is where retention effort should go.

— Mike Pritula

Hiring metrics

  1. Cost per hire = hiring costs ÷ hires = $21,000 ÷ 13 = $1,615. Compare by channel and by type of role, not only the average.
  2. Applicants per hire = applicants ÷ hires = 940 ÷ 13 = 72. If it grows, check job ads and channels.
  3. Offer acceptance rate = offers accepted ÷ offers made × 100% = 13 ÷ 16 = 81.3%. Low acceptance points to pay, process speed or how interviews felt.
  4. Vacancy rate = open vacancies ÷ total planned positions × 100% = 6 ÷ 128 = 4.7%.
  5. Hiring rate = hires ÷ average headcount × 100% = 13 ÷ 120 = 10.8%. Next to turnover it shows whether the team is growing or only replacing leavers.
How to put these on one screen for the recruiting team is covered in Recruitment Dashboard: Key Metrics, and How To Build One.

Learning, time and HR function metrics

  1. Training spend per employee = training spend ÷ average headcount = $18,000 ÷ 120 = $150.
  2. Training hours per employee = training hours ÷ average headcount = 960 ÷ 120 = 8.
  3. Training spend as % of payroll = training spend ÷ payroll × 100% = 1.6%.
  4. Internal promotion rate = promotions ÷ average headcount × 100% = 5 ÷ 120 = 4.2%. Compare it with external hiring into the same levels.
  5. Absence rate = absence days ÷ (average headcount × working days) × 100% = 410 ÷ (120 × 63) = 5.4%. Count sick days and unplanned absence, not vacation.
  6. Overtime rate = overtime hours ÷ hours worked × 100% = 1,150 ÷ 59,000 = 1.9%.
  7. HR staff per 100 employees = HR FTE ÷ average headcount × 100 = 3 ÷ 120 × 100 = 2.5.
  8. HR cost per employee = HR function budget ÷ average headcount = $64,000 ÷ 120 = $533.
That makes 26 metrics; the 27th is average headcount itself — the base that every other number stands on.

How to choose 5–7 HR metrics for your dashboard

Twenty-seven metrics on one slide is noise. A working dashboard has five to seven, and each one answers a question management actually asks.
  1. Start from the company goal for the year. Growth needs hiring rate, cost per hire and offer acceptance. Margin pressure needs payroll as % of revenue and revenue per employee. A retention problem needs voluntary and regrettable turnover.
  2. Keep one metric per question. Turnover for the period and annualized turnover answer the same question — show one.
  3. Fix the formula and the source. Write down how each metric is calculated and where the data comes from, so next quarter's number is comparable.
  4. Show the trend, not one value. 30% turnover means nothing alone; 30% against 24% last year is a conversation.
  5. Add a breakdown for the one metric that matters most. By department, manager or tenure — that is where the reasons start to show.
In the calculator, star the metrics you want and copy them as a table into Excel or Google Sheets: that is the first version of your dashboard.
FROM MY PRACTICE · PREPLY AND IDEALS

At Preply and at iDeals we built a data-driven approach into the culture: if you want to prove something or convince someone, rely on numbers.

In practice that meant collecting data about the company regularly, running pulse surveys, measuring loyalty with NPS every quarter, and not making a decision until the numbers were in. At iDeals the value on the culture slide was eventually renamed “Fact driven”.

Metrics are not reporting for its own sake. They are what lets HR argue with facts instead of opinions — and a company can be taught to work this way.

— Mike Pritula

Common mistakes with HR metrics

  1. Dividing by the wrong headcount. Use average headcount for the period, not the number at the end.
  2. Comparing different periods. A quarter's turnover next to a year's turnover looks four times better. Annualize first.
  3. Counting vacation as absence. Planned leave inflates the absence rate and hides real problems.
  4. Not checking that the numbers add up. Start headcount minus leavers plus hires should equal end headcount. If it does not, there are transfers, part-time staff or errors in the data — the calculator flags this for you.
  5. Treating every exit the same. Total turnover hides the one number that matters most: how many people you wanted to keep and lost.
  6. Stopping at the number. A metric tells you where to look. The reasons come from breakdowns, exit interviews and conversations with managers.
Moving from metrics to analytics — segmentation, employee lifetime value, recruitment, performance and turnover analytics, regression and forecasts — is what the HR Analytics course is about: 10 lessons, with homework checked and a diploma at the end. You can also open the HR metrics calculator on its own page and save your calculation as a link.
FAQ

Frequently asked questions

What are the most important HR metrics?

Start with five to seven: voluntary turnover, regrettable turnover, revenue per employee, payroll as a share of revenue, cost per hire, offer acceptance rate and absence rate. Pick the ones linked to this year's company goals.

How do you calculate average headcount?

Add headcount at the start and at the end of the period and divide by two. If you have monthly figures, take the mean of the monthly headcounts — it is more accurate for a company that grows or shrinks fast.

What is the difference between HR metrics and HR KPIs?

A metric is any number you measure. A KPI is a metric you have chosen as a target for a goal, with a current value, a target value and an owner. Every KPI is a metric; most metrics are not KPIs.

How do you calculate cost per hire?

Add up all hiring costs for the period — job ads, agencies, tools, referral bonuses — and divide by the number of people hired in the same period.

How often should HR metrics be reported?

Turnover, hiring and absence monthly; money and learning metrics quarterly. Always show the trend next to the number, because a single value without a comparison tells management very little.