The HR Metrics C-Suite Actually Cares About
Key HR Metrics Every Organisation Should Track
In this post, we will look at the main HR metrics that top management really focuses on. These are not just regular reports, but important numbers that affect business decisions, costs and overall company performance. When HR understands these clearly, it becomes easier to align with management expectations and support business goals effectively.
Let’s look at these sections in detail:Â
Introduction
Today, HR is no longer seen as just an administrative function. The C-Suite expects clear numbers that show how people’s decisions impact revenue, cost control, productivity and overall business stability. Metrics such as hiring efficiency, payroll costs, absenteeism, attrition, and performance trends directly affect profitability and long-term growth.Â
With an integrated HR system like Saral HRM, organisations can capture data across recruitment, attendance, performance management, payroll and exit processes in one place. This connected data helps management track the right metrics, identify patterns early and take informed decisions based on real numbers rather than assumptions.
The 3 Categories of HR Metrics Leaders Care About
Financial Impact Metrics
1. Absenteeism and Overtime Trends
A time and attendance system generally records daily attendance, absences, late coming and overtime hours. This data can be shown in reports and dashboards and can also be linked with payroll for proper salary calculation.
With this data, you can study absenteeism over a period of time such as number of days absent, repeated patterns and department wise trends. Overtime hours can also be tracked based on shift timings and company policies.
2. Attendance Analytics as the Base for Cost Metrics
Attendance reports with clear visual data on absence, late marks and overtime provide the base information required to calculate cost impact. From this raw data, organisations can estimate how much extra cost is incurred due to absenteeism and overtime.
Productivity Metrics
1.Time to Hire
Recruitment data, such as job approval date, interview stages, and offer acceptance date, can be used to calculate Time to Hire. It simply means the number of days taken from raising a hiring request to the final selection of a candidate.
2.Employee Productivity Rate
If performance reviews and attendance records are available, they can be combined to understand productivity trends. Performance ratings show output quality, while attendance data shows time contribution. Together, they give a clearer picture of employee productivity.
3.Performance Rating Distribution
Performance appraisal systems record ratings given during evaluations and track goal achievements. Using this information, organisations can prepare reports showing the percentage of employees rated as high performers, average performers or those who need improvement.
Risk and Compliance Metrics
1.Attrition Rate
Workforce reports usually capture employee headcount, exits and exit reasons. Based on this data, the attrition rate can be calculated.
Attrition Rate = Number of employees who left divided by Average headcount multiplied by 100
This helps in understanding employee stability and workforce risk.
2.High Performer Turnover Rate
If performance ratings and exit data are both available, it is possible to calculate how many high performing employees have left the organisation.
High Performer Turnover = High performing employees who left divided by Total high performing employees multiplied by 100
This metric helps in identifying whether the organisation is losing its key talent and whether corrective action is required.
The 8 HR Metrics Explained
1.Cost per Hire
Cost per hire is the amount a company spends to recruit one employee. It includes advertising costs, recruiter fees, interview expenses, and onboarding costs. It is calculated by dividing total recruitment expenses by the total number of people hired.
For example, if a company spends ₹5,00,000 and hires 10 employees, then the cost per hire is ₹50,000. Top management looks at this because if hiring costs are too high, profits will be affected, and it may indicate an inefficient hiring process.
In many industries, this can range from ₹30,000 to ₹1,50,000 or more.
2.Time to Hire
Time to hire means how many days it takes from posting a job to the candidate accepting the offer.Â
It is calculated by subtracting the job posting date from the offer acceptance date.Â
For example, if a job is posted on 1 January and the offer is accepted on 31 January, then it took 30 days. Management checks this because if hiring takes too long, work gets delayed and business may lose revenue.Â
Normally it is around 30 to 45 days, but for technical roles it can be longer.
3.Payroll Cost as Percentage of Revenue
This shows how much of the company’s revenue is spent on salaries.Â
It is calculated by dividing total payroll cost by total revenue and multiplying by 100.Â
For example, if payroll is ₹10 crore and revenue is ₹50 crore, then payroll is 20 percent of revenue. Senior leaders monitor this because salary is one of the biggest expenses. If it increases too much, profit will reduce.Â
In many industries, it stays between 15 percent to 30 percent.
4.Overtime Cost Trend
Overtime cost is the extra amount paid for working beyond normal hours.Â
It is calculated by multiplying overtime hours with overtime rate.Â
For example, 1,000 overtime hours at ₹500 per hour means ₹5,00,000 overtime cost. Management watches this because continuous high overtime may mean there are not enough employees or work is not planned properly.Â
Ideally, overtime should be less than 5 to 8 percent of total payroll.
5.Absenteeism Rate
Absenteeism rate shows the percentage of working days lost due to employee absence.Â
It is calculated by dividing total absent days by total working days and multiplying by 100. For example, 200 absent days out of 10,000 total working days equals 2 percent. Leaders care about this because more absence means less productivity and more cost.Â
Normally, 1 to 3 percent is considered acceptable.
6.Attrition Rate
Attrition rate means the percentage of employees who leave the company during a certain period. It is calculated by dividing the number of employees who left by the average number of employees and multiplying by 100.Â
For example, if 25 employees leave out of 250, the attrition rate is 10 percent. Management checks this because high attrition increases hiring cost and affects stability.Â
In many industries, it ranges between 10 to 20 percent.
7.High Performer Turnover Rate
This shows how many top performing employees are leaving. It is calculated by dividing the number of high performers who left by the total number of high performers and multiplying by 100.Â
For example, if 5 top performers leave out of 50, then it is 10 percent. Senior leaders focus on this because losing strong employees affects growth and performance.Â
Ideally, it should be below 5 to 8 percent.
8.Payroll Error Rate
Payroll error rate shows how many salary transactions needed correction. It is calculated by dividing the number of payroll corrections by total payroll transactions and multiplying by 100.Â
For example, 5 corrections out of 500 payslips means 1 percent. Management gives importance to this because payroll mistakes reduce employee trust and can create compliance problems.Â
Good companies keep this below 1 percent.
Conclusion
The right HR metrics help management clearly see how people related decisions affect cost, performance and overall business growth. When these numbers are tracked properly, it becomes easier to plan ahead and avoid risks. With an integrated system like Saral HRM, organisations can capture accurate data in one place and turn it into meaningful insights that support smarter business decisions.
