TL;DR: HR metrics are measurements of your workforce and HR activity, such as turnover, time to fill, and absenteeism. Track a balanced set across five areas: diversity and inclusion, the HR function, recruitment, onboarding, and engagement. Use a written formula for each, so the number means the same thing every month and can be compared over time.

Last updated 11 October 2026.

Key takeaways

• An HR metric only helps if its formula stays fixed, so write each one down before the first report.
• Turnover rate is leavers divided by average headcount, while retention rate follows only the people employed at the start.
• According to WGEA, the private sector total remuneration gender pay gap is 21.1%, which makes pay equity a core diversity metric.
• According to the ABS, 7.2% of employed people changed jobs in the year to February 2026, a useful backdrop for turnover.
• Employee net promoter score is the percentage of promoters minus the percentage of detractors, from minus 100 to plus 100.

What are HR metrics?

HR metrics are quantitative measurements used to track and analyse an organisation’s people and HR activities. Examples include employee turnover rate, time to fill, cost per hire, and absenteeism rate. Each one turns people data into a number you can compare over time, so you can measure whether HR initiatives and policies are working and where to improve.

HR metrics cover a wide range of areas, including recruitment and hiring, onboarding, employee engagement, and diversity and inclusion. Some measure the workforce itself, such as headcount and turnover. Others measure how well HR runs its own processes, such as how long it takes to fill a role.

A KPI is simply a metric you have tied to a goal. Turnover rate is a metric; “reduce turnover in the first year to below an agreed level” makes it a KPI. HR analytics is what you do with both, comparing, explaining, and predicting, which our guide to people data analytics covers in depth.

Why are HR metrics important?

HR metrics matter because they show whether HR programs are working and let you act on evidence rather than instinct. By collecting and analysing them, organisations spot problems early, such as rising turnover in one team, and take steps before they grow. In Australia, some metrics also feed legal reporting, such as WGEA’s annual gender equality data.

For years, many organisations struggled with high turnover, stiff competition for talent, and the challenge of retaining good people. Those pressures have made the value of people data clearer. Suppose exit interviews say people leave for pay, yet turnover by department shows the problem sits with one manager. Without the metric, you fix the wrong thing.

Reporting obligations add another reason. According to WGEA, all Australian employers with 100 or more employees must report their gender equality data each year. WGEA reports a private sector total remuneration average gender pay gap of 21.1% and a median gap of 16.4%. So organisations of that size already hold the data behind several diversity metrics, and our explainer on WGEA reporting sets out what goes in.

Which diversity and inclusion KPIs should you measure?

Measure six diversity and inclusion KPIs: workforce diversity, diversity in leadership, diversity in recruitment, inclusion survey results, turnover by demographic group, and D&I training completion. Together they show who you employ, who reaches leadership, who applies, how included people feel, and who leaves. Collect demographic data voluntarily, because much of it is sensitive information under privacy law.

According to the OAIC, sensitive information includes racial or ethnic origin, sexual orientation, and religious beliefs, and it usually needs the person’s consent to collect. So make demographic questions optional, explain why you ask, and report only on groups large enough that no individual can be identified.

Workforce diversity

Workforce diversity measures the representation of different groups across your workforce, such as gender, age, cultural background, and disability.

Formula: employees in a group ÷ total headcount × 100.

It identifies areas of underrepresentation and tracks progress over time. For example, 180 women in a workforce of 400 gives 45%.

Diversity in leadership

Diversity in leadership measures the same representation among executives and managers, which is where gaps usually widen.

Formula: leaders in a group ÷ total leaders × 100.

WGEA asks for gender composition by manager level, so the same split works for both internal reporting and the annual report.

Diversity in recruitment

Diversity in recruitment measures representation in your candidate pool, at each stage from application to offer.

Formula: candidates in a group at a stage ÷ total candidates at that stage × 100.

Comparing stages shows where people drop out. If 40% of applicants are women but only 15% of shortlists are, the problem is the screening, not the advertising.

Inclusion survey score

The inclusion survey score measures how included employees feel and how they rate the organisation’s diversity and inclusion efforts.

Formula: favourable responses to inclusion questions ÷ total responses to those questions × 100.

It shows where employees feel there is room for improvement, and works best split by team and by group.

Turnover by demographic group

Turnover by demographic group measures whether some groups leave faster than others, which can signal bias or a poor experience.

Formula: leavers in a group ÷ average headcount of that group × 100.

Compare each group with overall turnover. A group leaving at twice the overall rate deserves a closer look at exit reasons and managers.

Diversity and inclusion training completion

D&I training completion measures the share of employees who have completed diversity and inclusion training.

Formula: employees who completed the training ÷ employees required to complete it × 100.

Completion shows reach, not impact. So pair it with the inclusion survey score to see whether behaviour changes.

Which HR function KPIs should you measure?

Measure two HR function KPIs: HR cost as a percentage of revenue, and the HR to employee ratio. They show how much the organisation invests in HR and how stretched the team is. Both are most useful compared with your own history and similar organisations, because the right level depends on industry, complexity, and how much work is automated.

HR cost as a percentage of revenue

HR cost as a percentage of revenue measures what the organisation spends on HR activities relative to its income.

Formula: total HR costs ÷ total revenue × 100.

Decide up front what counts as an HR cost, such as HR salaries, systems, recruitment, and training, and keep that definition fixed.

HR to employee ratio

The HR to employee ratio measures how many HR staff support the workforce.

Formula: HR full-time equivalents ÷ total full-time equivalents × 100.

Some teams express it the other way round, as employees per HR FTE. For example, 4 HR FTE supporting 500 employees is 0.8 per 100, or 125 employees per HR person.

Which recruitment KPIs should you measure?

Measure six recruitment KPIs: time to fill, cost per hire, source of hire, candidate experience, offer acceptance rate, and quality of hire. The first three show how fast, how expensive, and how well-targeted hiring is. The last three show whether candidates and new hires rate the process, accept the offer, and succeed in the role.

Time to fill

Time to fill measures how long it takes to fill a vacant role.

Formula: days from the job being posted to the offer being accepted, averaged across roles.

Some organisations count from requisition approval instead. Either works, provided you pick one. A longer time to fill can indicate a slow process or a tight job market.

Cost per hire

Cost per hire measures the total cost of recruiting a new employee.

Formula: (external recruiting costs + internal recruiting costs) ÷ number of hires.

External costs include advertising, agency fees, and assessments. Internal costs include recruiter time, interviewer time, and referral bonuses. A rising cost per hire can point to inefficiency or strong competition for talent.

Source of hire

Source of hire measures where new hires come from, such as job boards, referrals, LinkedIn, agencies, or your careers page.

Formula: hires from a source ÷ total hires × 100.

It helps you evaluate each channel and move budget towards the ones that produce hires who stay.

Candidate experience

Candidate experience measures how satisfied candidates are with the application process, the communication, and the overall experience.

Formula: percentage of candidates rating the process 9 or 10 out of 10, minus the percentage rating it 0 to 6.

Survey unsuccessful candidates as well as hires, because they are the larger group and they talk.

Offer acceptance rate

Offer acceptance rate measures the share of job offers candidates accept.

Formula: offers accepted ÷ offers made × 100.

A low rate can signal pay below market, a slow process, or a gap between the job ad and the offer.

Quality of hire

Quality of hire measures how well new hires perform and stay. No single standard formula exists, so most organisations combine a few measures.

Formula: (new hire performance score % + 12-month retention % + hiring manager satisfaction %) ÷ 3.

Track it by source and by recruiter, so the measure improves future hiring rather than just describing past hiring.

Which onboarding KPIs should you measure?

Measure five onboarding KPIs: time to productivity, onboarding engagement, onboarding completion rate, manager satisfaction, and compliance rate. They show how quickly new hires contribute, how they feel, whether onboarding tasks get done, how managers rate readiness, and whether required paperwork and training are complete. Strong onboarding also improves first-year retention, which feeds the engagement metrics.

Time to productivity

Time to productivity measures how long new hires take to reach full productivity in their role.

Formula: days from start date to an agreed productivity milestone, averaged across new hires.

Define the milestone per role, such as a first solo shift or a full sales quota, before you measure.

Onboarding engagement

Onboarding engagement measures how satisfied and connected new hires feel during onboarding. Survey technology is recommended to collect this data.

Formula: favourable responses on a new hire survey ÷ total responses × 100, usually at 30 and 90 days.

Onboarding completion rate

Onboarding completion rate measures the share of new hires who finish every onboarding task within the set period.

Formula: new hires who completed all onboarding tasks on time ÷ total new hires × 100.

A high completion rate can indicate an effective and engaging program. In addition, a task that is often late usually points to a step that is unclear or owned by nobody.

Manager satisfaction

Manager satisfaction measures how managers rate new hires’ performance and readiness at the end of onboarding.

Formula: average manager rating of new hire readiness, for example on a 1 to 5 scale.

Compliance rate

Compliance rate measures the share of new hires who complete required compliance training and paperwork on time, such as policies, a TFN declaration, and work health and safety induction.

Formula: new hires with all compliance items complete by the due date ÷ total new hires × 100.

Which engagement KPIs should you measure?

Measure six engagement KPIs: employee satisfaction, employee turnover, absenteeism rate, employee net promoter score, employee retention rate, and participation in training and development. Turnover, absenteeism, and retention show what people do. Satisfaction, eNPS, and training participation show how they feel and whether they invest in their future with you.

Employee satisfaction

Employee satisfaction measures how satisfied employees are with their job and the organisation as a whole. Survey technology is recommended to collect this data.

Formula: favourable responses to satisfaction questions ÷ total responses × 100.

Employee turnover rate

Employee turnover rate measures the share of employees who leave in a given period.

Formula: number of leavers in the period ÷ average headcount in the period × 100, where average headcount is (headcount at the start + headcount at the end) ÷ 2.

For example, 60 leavers with an average headcount of 400 gives 15% for the year. Split voluntary from involuntary turnover, because they have different causes. According to the ABS, 7.2% of employed people changed jobs in the year to February 2026, and the annual retrenchment rate was 1.8%.

Absenteeism rate

Absenteeism rate measures how much scheduled work time is lost to unplanned absence.

Formula: unplanned absence days ÷ total scheduled workdays × 100.

Exclude planned leave, such as annual leave, so the rate reflects unplanned absence. High absenteeism can indicate low engagement, poor health, or excessive workload.

Employee net promoter score (eNPS)

Employee net promoter score measures how likely employees are to recommend the organisation as a place to work.

Formula: percentage of promoters (scores of 9 or 10) minus percentage of detractors (scores of 0 to 6).

The result runs from minus 100 to plus 100. For example, 45% promoters and 20% detractors gives an eNPS of plus 25.

Employee retention rate

Employee retention rate measures the share of employees who stay over a period.

Formula: employees at the start of the period who are still employed at the end ÷ headcount at the start × 100.

Retention ignores people hired during the period, so it is not simply 100 minus turnover. That is why many teams track both.

Training and development participation

Training participation measures the share of employees who take part in the training and development programs on offer.

Formula: employees who took part in at least one program ÷ total employees × 100.

High participation can indicate strong engagement and interest in career development.

How do you start tracking HR metrics?

Start with five to ten metrics tied to a current priority, such as reducing first-year turnover or meeting WGEA reporting. Write down each formula and data source, and agree who owns it. Then report monthly or quarterly from one system of record, so the numbers stay consistent and nobody rebuilds them from spreadsheets each time.

Most of these metrics need the same few fields: start and end dates, positions, managers, locations, and demographic data. If those live in several spreadsheets, every report becomes a reconciliation exercise. So the practical first step is getting clean employee data into one place, and our guide to HR metrics to track in your HRIS groups the workforce metrics an HRIS can calculate.

If you want an easier way to analyse your people data, Worknice is a sensible option for Australian organisations of roughly 50 to 1,000 employees. It holds the employee record, runs onboarding and surveys, lets you build and export data tables, and produces the WGEA report. See Worknice HR reporting for detail. However, an enterprise wanting predictive workforce analytics across global payroll may need a dedicated analytics platform.

Frequently asked questions

What are the most important HR metrics to track?

The most important HR metrics for most organisations are employee turnover rate, retention rate, absenteeism rate, time to fill, cost per hire, and employee net promoter score. Australian employers with 100 or more employees should add gender composition and gender pay gap, because they report both to WGEA each year.

How do you calculate employee turnover rate?

Divide the number of employees who left during the period by the average headcount for that period, then multiply by 100. Average headcount is the headcount at the start plus the headcount at the end, divided by two. For example, 60 leavers and an average headcount of 400 gives 15%.

What is the difference between HR metrics and HR KPIs?

An HR metric is any measurement of people or HR activity, such as turnover rate or time to fill. An HR KPI is a metric tied to a specific goal and target, such as reducing first-year turnover below an agreed level. Every KPI is a metric, but not every metric is a KPI.

How do you calculate eNPS?

Ask employees how likely they are to recommend the organisation as a place to work, on a scale of 0 to 10. Subtract the percentage of detractors, who score 0 to 6, from the percentage of promoters, who score 9 or 10. The result runs from minus 100 to plus 100.

How do you calculate cost per hire?

Add your external recruiting costs, such as advertising and agency fees, to your internal recruiting costs, such as recruiter and interviewer time. Then divide the total by the number of hires in the same period. Keep the cost categories fixed from one period to the next, so the trend means something.

About the author

Graham Martin is Co-founder of Worknice, an Australian HRIS built for mid-to-large organisations. He has spent more than a decade working with Australian People and Culture teams on HR systems, compliance, and payroll integration.

Related reading

• HR metrics to track in your HRIS: the workforce metrics an HRIS calculates, grouped into growth, retention, diversity, pay, and structure.
• What is HR analytics?: how to turn these metrics into decisions.
• How can companies improve their gender pay gap?: what to do once the diversity metrics show a gap.
• The A-Z HR glossary: plain definitions of the HR terms behind these metrics.

Sources

1. Workplace Gender Equality Agency, “Gender pay gap data”. Retrieved 11 October 2026: https://www.wgea.gov.au/pay-and-gender/gender-pay-gap-data
2. Australian Bureau of Statistics, “Job mobility, February 2026”. Released 31 July 2026. Retrieved 11 October 2026: https://www.abs.gov.au/statistics/labour/jobs/job-mobility/latest-release
3. Office of the Australian Information Commissioner, “What is personal information?”. Retrieved 11 October 2026: https://www.oaic.gov.au/privacy/your-privacy-rights/your-personal-information/what-is-personal-information