January 2022


Your organisation invests in the people who build it. Employees get competitive packages, incentives and a pleasant working environment. You make sure of that.

But it’s a two-way street. You also make sure your organisation gets return on its investment. You value your people, but it’ll all mean nothing if there isn’t growth, vision and a future. You must be certain that your investment pays off and that you take your humans in the business with you and your vision, into the future.

The answer is human resources (HR) metrics, but how can you be sure you’re tracking the right ones?

What are HR metrics?

HR metrics or analytics are key numbers that help your business to track and measure how effective your HR policies are. You can measure staff turnover, cost-per-hire, benefits participation rate, to name only a few. HR metrics ultimately are only numbers. They become useful when you know how to interpret them and let them inform your HR strategy.

What type of metrics should HR be tracking?

You know how intricately linked your people strategy is to your company’s success. You can’t do the one without the other. But HR metrics are a cosmos of possibilities. Your clever Human Resources Management System (HRMS) makes sure that you have a dashboard of HR analytics options. If you’re short on time and want a firm grasp of the core essentials of your human capital performance, we built a list of must-track metrics.

Employee retention

You want to make sure you keep the good people in your organisation. Your HRMS metrics dashboard should measure employee retention. Note that it measures the opposite of turnover rate. The employee retention rate equals number of employees who remained in your organisation over a given period divided by the number of total employees.

Voluntary employee turnover

This number measures only those employees who leave your business voluntarily over a specified period. With this number, you can gain insightful information to help you develop better strategies to retain employees.

With good HR software solutions, you can drill deeper into this number. For example, your employee turnover rate might seem normal compared to the industry average, but are you losing key people who you should perhaps invest in to groom for succession? Perhaps it’s time for HR to change the business’s employee engagement strategy, which your HRMS can also help with.

Time off

Measuring your employee absence rate means you can detect early signs of a potential problem. For example, you can analyse absences and see whether overall unforeseen absences are increasing over time. This can flag larger problems like employees not sufficiently engaged in their work, or needing support.

Recruitment and training

HR metrics tracks how effective your organisation’s recruitment process and training program is. Some useful insights to track include: time to hire (the average time between a job post and hiring); acceptance rate; cost per hire; time to productivity; and new hire turnover.

This in turn can inform your HR onboarding program, whether you provide sufficient training to support new hires in their roles, how much training costs per employee, and so much more. What can we say? It’s an incredibly useful metric to include in your dashboard.

HR software and service

Measuring your HR department’s performance is another key metric to keep on top of. Examples of useful metrics to help shape your company’s HR strategy are:

  • Cost of HR per employee: this shows your HR department’s efficiency.
  • Ratio of HR professionals to employees, also a good for gauging HR’s cost efficiency.
  • Effectiveness of HR software: you can measure, for example: the number of active users of the software; average time spent in the system and break it down to per user, per month.

Employee engagement and performance

A good HRMS can help you analyse how engaged employees are with the business and their job. This in turn has a direct impact on their performance, which you can also measure with HRMS metrics. Indeed, if you can measure how employees are performing, you can also gauge fairly accurately how engaged they are with the business. It could also help you step up your training program, if needed.

Employee productivity

You can measure employee productivity within your HRMS dashboard or metrics, and offer employees tools to improve productivity.

Overtime expenses

Another key metric to keep track of is employees’ overtime expenses. Frequent overtime comes at a great cost for the business, especially if it means you’re paying an employee more for what the work is worth. It’s vital to identify processes that can improve, like overtime management.

How HR metrics benefit the business

When you monitor key metrics in your biggest resource – employees – and fine-tune these to keep your people performance optimal, your business will benefit. Happy employees, who are fully supported, are productive, leading to business success. With metrics at your fingertips, you can improve areas in your business to fuel employee happiness.

Better development of company culture

Analytics help a business map where you are in your quest to achieve the organisational culture you’re aiming for. It helps you identify where your gaps are and build a strategy that will get you where you want to be, culturally speaking.

Aids in employee retention and engagement

Through HR analytics, you can survey employee sentiment to understand lows in engagement and attrition rates, while flagging opportunities to improve engagement with your workforce.

Even with remote working practices, you can measure and improve employee engagement. A large proportion of businesses have adopted hybrid working practices, meaning employees can elect to work remotely for a portion or all of their working week, depending on the company policy. This opens opportunities for employers to engage with a workforce in new ways.

Helps to identify problem performance areas

HR analytics are widely used to identify performance problems, or performance areas that could potentially become problems. You can address problems before they become, you know, real problems.

Helps reducing unnecessary cost

When you measure employee performance, you get better in addressing inefficiencies. In a business, inefficiencies almost always translate into unnecessary cost. HR analytics help businesses to reduce unnecessary cost. Think about reducing overtime across the business, for example. Measuring cost to hire help you manage – and reduce – recruitment costs. Every metric allows you to make informed, cost-saving decisions to move the business forward.

Aids in ensuring maximum company output

When you measure employee engagement and output, you have a fairly accurate picture of what the company’s overall output will be. Additionally, if you improve in the processes that help employees engage more and increase their productivity, you have a winning combination of also increasing company output. Investing in HR metrics and their analysis is investing in your company’s bottom line.

Build your HR analytics around the specific needs of your business


Book a Demo today to find out how gulfHR can assist you in building your HR analytics, specifically shaped around the needs of your business and the Middle Eastern Regions.


The most established and successful businesses operating in the Middle East use gulfHR. Find out why Startups, Bluechips, and the Fortune 500 trust gulfHR as their HRMS provider.

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