Workforce management metrics are critical for understanding and optimizing how businesses manage their employees, yet many struggle to use them effectively. This can hinder decision-making, as many companies (43%) only use ad-hoc reporting or none at all, limiting their ability to respond quickly to workforce changes.
Real-time workforce management metrics that provide instant insights into productivity, engagement, and resource allocation can offer a competitive edge. They can also facilitate more agile decisions, optimize workforce efficiency, and better align staffing strategies with long-term business goals.
Contents
What are workforce management metrics?
What are workforce management KPIs?
Workforce management vs. workforce planning
25 workforce management metrics to track
FAQ
What are workforce management metrics?
Workforce management (WFM) is a strategic process that aligns staffing with business goals, ensuring the right employees with the right skills are available when needed. It helps maximize productivity while minimizing costs, contributing to overall efficiency and employee satisfaction.
WFM metrics are key indicators that assess WFM effectiveness, providing insights into employee performance, productivity, and resource allocation. Common metrics like utilization rates, absenteeism, and labor costs enable businesses to make informed decisions, optimize scheduling, and improve operational efficiency.
These metrics also enhance the employee experience by preventing overwork, boosting satisfaction, and improving retention. Dieter Veldsman, Chief Scientist (HR and OD) at AIHR, says, “WFM metrics help the organization deliver on expectations. Organizations that do this well can deal with unforeseen circumstances and drive expected outcomes and outputs.”
What are workforce management KPIs?
Workforce management KPIs (Key Performance Indicators) are measurable values that show how effectively a company is meeting its workforce-related goals.
Unlike broader metrics that track general employee performance and efficiency, KPIs are directly tied to strategic business objectives, offering a more focused evaluation of WFM efforts and their business impact.
These KPIs assess key areas like employee productivity, turnover, schedule adherence, and labor cost efficiency. By aligning workforce KPIs with broader business goals, companies can monitor how well their workforce supports overall objectives.
Workforce management vs. workforce planning
While not mutually exclusive, workforce management and workforce planning (or strategic workforce planning) are different approaches to handling workforce matters with different purposes and intended outcomes. Here are the main differences between the two:
25 workforce management metrics to track
Here are 25 crucial WFM metrics you should track to ensure optimal workforce efficiency, productivity, and engagement at your organization:
1. Time to hire
Time to hire refers to the length of time between a candidate applying for a position and accepting an offer.
Here is how to calculate time to hire:
Time to hire = Total time taken to hire ÷ total number of hires
A shorter time to hire typically allows companies to secure top talent ahead of their competitors. Conversely, long hiring times can lead to operational delays and affect the candidate experience. Tracking this helps streamline the recruitment process and make it more cost-effective.
2. Time to productivity
This metric tracks how long it takes for a new hire to reach full productivity, starting from their hire date until they perform at an optimal level.
Measure the time between the employee’s start date and when they become fully productive, using performance feedback to identify the point of total productivity.
A shorter time to productivity indicates that onboarding and training are effective, while longer onboarding periods can hurt overall efficiency. Tracking this metric helps companies ensure that new hires contribute quickly, improving overall ROI.
3. Employee productivity
Employee productivity measures how efficiently employees complete tasks and achieve performance targets. You can calculate it based on output per hour worked.
This is how to calculate this metric:
Employee productivity = Output (units produced or services completed) ÷ total hours worked
4. Employee performance ratings
Performance ratings assess individual employees based on their job performance, typically through reviews by managers or self-assessments.
Consistent performance tracking helps identify high performers who may be candidates for promotion and employees who may need additional training or support. This metric supports data-driven decisions about promotions, raises, or performance improvement plans (PIPs).
5. Employee engagement
Employee engagement measures how committed employees are to their work and the organization. This can be assessed through surveys, feedback, and behavior metrics using tools like pulse surveys, stay interviews, performance reviews, and focus groups.
Engaged employees tend to be more productive, stay with the company longer, and contribute positively to the business. Tracking engagement helps companies identify and address factors affecting motivation, such as job design, leadership, or work environment.
6. Employee satisfaction index
The employee satisfaction index (ESI) measures job satisfaction using three questions, each scored on a scale of one to 10.
Here is how to calculate the employee satisfaction index:
Employee satisfaction index = ([{Question mean value ÷ 3} – 1] ÷ 9) x 100
High employee satisfaction leads to better performance, higher retention rates, and reduced absenteeism. Tracking this metric can highlight areas where improvements are needed, such as communication, benefits, or work environment, which ultimately enhances retention and engagement.
7. Employee grievance rate
This metric tracks the number of formal grievances employees file regarding issues like workplace conditions, harassment, or management practices.
Here is how you calculate the employee grievance rate:
Employee grievance rate = (Total grievances ÷ total number of employees) x 100
High grievance rates can indicate systemic problems with company culture, management, or policies. Addressing these issues quickly can improve employee satisfaction and reduce turnover.
8. Employee health and wellness participation rate
This metric tracks employee participation in health and wellness programs the company offers. This can include gym memberships, mental health resources, or health screenings.
The employee health and wellness participation rate is determined by this formula:
Employee health and wellness participation rate: (Number of participants ÷ number of eligible employees) x 100
High participation in wellness programs can improve overall employee health, reduce absenteeism, and boost morale. Low participation might indicate that programs are not accessible or relevant to employees, providing an opportunity for adjustment.
9. Employee tenure
Employee tenure measures the average length of time employees stay with the company.
Use this formula to calculate employee tenure:
Employee tenure = Total years of service for all employees ÷ total number of employees
Longer tenure generally indicates employee satisfaction, loyalty, and a stable workforce. Short tenures can signal poor job fit, lack of growth opportunities, or unsatisfactory working conditions. By understanding tenure trends, you can better anticipate talent replacement needs and build talent pools to meet these needs.
10. Employee net promoter score
Employee net promoter score (eNPS) measures employee loyalty and satisfaction by asking how likely they are to recommend the company to others as a good place to work.
Here’s how to calculate your company’s eNPS score:
eNPS = % of promoters (employees who would recommend the company) – % of detractors (employees who would not recommend the company)
A high eNPS indicates strong employee loyalty and satisfaction, while a low score suggests dissatisfaction and a risk of turnover. Tracking eNPS regularly provides insight into the company culture and how employees perceive it.
Learn the skills you need to effectively track WFM metrics
Being able to select and effectively measure relevant workforce management metrics is vital for any HR professional who wants a strong handle on daily workforce matters.
In AIHR’s HR Metrics & Dashboarding Certificate Program, you will learn to use relevant HR metrics, dashboards, and reports for day-to-day work.
This online, self-paced Certificate Program will also teach you the theory of creating actionable metrics and KPIs, and their linkage to HR and business strategy.
11. Employee attendance
Employee attendance refers to how regularly employees show up for work as scheduled, factoring in both presence and punctuality. It encompasses full days worked and partial attendance, like late arrivals or early departures.
You can calculate employee attendance using the following simple formula:
Employee attendance = (Number of days worked ÷ total scheduled workdays) x 100
Unplanned absenteeism can slow productivity, increase other employees’ workloads, and disrupt project timelines. Monitoring this metric can reveal underlying issues like job dissatisfaction or health concerns, allowing for early intervention.
12. Absenteeism rate
The absenteeism rate tracks the percentage of days employees are absent without prior approval, including unplanned sick days and leave.
“Absenteeism is often an indicator of other factors influencing workforce effectiveness. HR needs to look for patterns in the data. Are people absent more on certain days? Is there a trend in terms of certain role families? These insights are crucial to ensure an understanding of workforce capacity and underlying risks.”
Here’s how to calculate your company’s absenteeism rate:
Absenteeism rate = (Number of unplanned absent days ÷ total scheduled workdays) x 100
High absenteeism can disrupt operations, reduce team efficiency, and affect customer satisfaction. Consistent tracking of absenteeism can help identify patterns of disengagement or health issues. You can then adjust policies to better support employee wellbeing.
13. Absence duration
Absence duration tracks how long employees are absent during each period of leave (e.g., sick leave, personal leave).
Here is how to calculate this metric:
Absence duration = Total days of absence ÷ number of absence events
Long absences can significantly impact team productivity and morale. Tracking this metric helps organizations identify and address long-term health issues or disengagement, ensuring absence policies support both employee wellbeing and operational needs.
14. Absence frequency
Absence frequency measures the number of instances in which employees are absent, regardless of the total days missed.
Use this formula to calculate absence frequency:
Absence frequency = Number of absences ÷ number of employees
Frequent short-term absences can disrupt team cohesion and productivity. Tracking absence frequency helps identify patterns that could signal dissatisfaction, health issues, or poor management practices.
15. Overtime hours
Overtime hours track how much time employees work beyond their contracted hours.
Here is how to calculate overtime hours:
Overtime hours = Total overtime hours worked ÷ total number of employees
Regular overtime can indicate insufficient staffing levels or unevenly distributed workloads. This can lead to employee burnout, higher turnover, and increased labor costs. Monitoring overtime ensures employees are not overworked and appropriately allocated labor resources.
16. Turnover rate
Employee turnover rate measures the proportion of employees who leave the company within a specific timeframe, either voluntarily or involuntarily. Dieter says, “Understanding the trends related to turnover helps organizations proactively plan for replacements and build a robust and ready talent bench.
“As more data becomes available, we can build predictive models of when turnover will occur, ensuring we put preventative measures in place or have ready-to-execute replacement strategies.”
You can calculate the turnover rate using the following simple formula:
Turnover rate = (Number of separations during the period ÷ average number of employees) x 100
High turnover rates can indicate low job satisfaction, poor management, or inadequate compensation. Constant turnover can incur high hiring and training expenses and negatively affect team morale. Tracking turnover allows you to adjust strategies to improve retention.
HR tip
Align metrics with business goals: Ensure the WFM metrics you track are directly aligned with your organization’s strategic objectives. For example, if improving customer satisfaction is a key goal, track metrics like employee engagement and training effectiveness, as these can significantly impact customer interactions.
17. Voluntary vs. involuntary turnover
This metric distinguishes between employees who leave by choice (voluntary) and those the company terminates or lays off (involuntary). Dieter says, “Knowing why people leave is important, as these insights should drive future strategies regarding retention.
“Exit interviews and surveys are, however, a very unreliable source of information. We need to dive deeper into other types of data sources to get to the real reasons behind why employees leave.”
Here’s how you can calculate these two metrics:
Voluntary turnover: (Number of voluntary leavers in a given period ÷ number of employees in the same period) x 100
Involuntary turnover: (Number of involuntary leavers in a given period ÷ number of employees in the same period) x 100
High voluntary turnover can signal job dissatisfaction or lack of engagement, while high involuntary turnover may indicate poor hiring or performance management practices. Tracking these two types of turnover separately helps companies understand and address the root causes of both types of turnover.
18. Total recordable incident rate
Occupational Safety and Health Administration (OSHA) uses total recordable incident rate (TRIR) to measure all work-related safety incidents leading to medical treatment beyond first aid, loss of consciousness, death, days of restricted work, lost time, and transfer to another job.
It established 200,000 as the benchmark to represent the total hours 100 employees would log in 50 weeks, based on a 40-hour work week.
Here’s how to calculate TRIR:
Total recordable incident rate (TRIR) = (Total number of reportable incidents x 200,000) ÷ total hours worked in the tracked period
Tracking this safety metric—especially in high-risk industries like construction—helps you understand patterns in safety incidents and their causes so you can identify critical improvement areas.
HR tip
Regularly review and adjust metrics: Workforce dynamics and business needs evolve over time, making it necessary to review and adjust your metrics regularly. Conduct periodic assessments to ensure the metrics you’re tracking are relevant and can provide actionable insights. Engage with employees to gather feedback on the metrics and make adjustments as needed.
19. HR-to-employee ratio
This metric compares the number of employees on the HR team to that of the organization’s total workforce.
To calculate the HR-to-employee ratio, apply this formula:
HR-to-employee ratio = Number of HR employees ÷ total number of employees
A well-staffed HR team is crucial for employee relations, compliance, and workforce management. A low ratio may indicate an overstretched HR department, which can lead to inefficiencies in recruitment, onboarding, and employee support.
20. Cost per hire
Cost per hire calculates the costs associated with the new employee hiring process. These costs include sourcing and recruitment advertising, onboarding, and referral bonus programs (among others).
The cost per hire is determined by this formula:
Cost per hire = (Internal recruiting costs + external recruiting costs) ÷ total number of hires
High hiring costs can strain budgets, especially in industries with high turnover rates. Tracking this metric helps companies optimize their recruitment and onboarding processes, reducing unnecessary expenses.
21. Internal promotion rate
This metric measures the percentage of leadership or higher-level positions filled by current employees rather than external hires. Dieter says, “Share success stories of internal employees moving within the organization.
“This showcases that the organization prioritizes the development of its own employees and is an employer where people can build a career, not just have a job.”
Calculate the internal promotion rate using the following formula:
Internal promotion rate = (Number of internal promotions ÷ total number of positions filled) x 100
A high internal promotion rate shows that the company provides growth opportunities and internal mobility for employees, which boosts morale and retention. It also reduces recruitment costs since internal recruitment is often less expensive than external hiring.
22. Schedule adherence
Schedule adherence measures how closely employees abide by their assigned work schedules, particularly in shift-based environments.
This is the formula used to calculate schedule adherence:
Schedule adherence = (Actual hours worked ÷ scheduled hours) x 100
Low adherence can lead to understaffing and decreased productivity. Tracking this metric helps ensure staffing levels meet demand and holds employees accountable for their scheduled hours.
23. Labor cost as a percentage of revenue
This metric shows the percentage of revenue spent on labor costs, including salaries, benefits, and taxes.
The labor cost as a percentage of revenue is worked out with this formula:
Labor cost as a percentage of revenue = (Total labor costs ÷ total revenue) x 100
High labor costs as a percentage of revenue can signal inefficiencies and reduce profitability. Tracking this helps companies ensure labor costs are sustainable in relation to revenue growth.
24. Workforce diversity
This metric measures the representation of various demographic groups within the workforce. It takes into account factors like gender, sexual orientation, ethnicity, nationality, age group, and disability status.
Diverse workforces tend to be more innovative and better at problem-solving. Monitoring diversity ensures hiring and promotion practices are inclusive and that the company benefits from a wide range of perspectives.
“Workforce diversity should be understood beyond just demographic descriptions. Who is your workforce, what do they care about and what matters to them at work? The better we know the human beings in our workforce, the better we can anticipate their needs, leading to higher levels of productivity and performance.”
Dieter Veldsman, Chief Scientist (HR and OD) at AIHR
25. Workforce distribution
This metric measures the composition of a company’s workforce based on the percentage of employees in different employment categories, such as full-time, part-time, temporary, and contract workers.
It helps an organization understand its staffing structure and assess how its different employment arrangements contribute to overall productivity and operational efficiency.
The workforce distribution is determined by this formula:
Workforce distribution = (Number of employees in a specific category ÷ total number of employees) × 100
Understanding workforce distribution is crucial for strategic planning, resource allocation, and identifying potential staffing gaps. It can also influence decisions on employee benefits, training needs, and workforce flexibility, enabling companies to adapt to changing market conditions and improve overall employee satisfaction and retention.
To sum up
Relying on outdated or ad-hoc data can impede your company’s ability to respond swiftly and strategically. As such, you need real-time metrics to provide actionable insights and allow your organization to optimize resource allocation, monitor performance, and address issues before they escalate.
A more data-driven approach can not only close the gap between workforce needs and business objectives but also build a more agile, adaptable workforce. Ultimately, WFM metrics empower companies to navigate change, anticipate future demands, and create a more resilient, high-performing workplace.
FAQ
Key performance indicators (KPIs) for WFM track how effectively a company manages its employees to meet business goals. Common KPIs include turnover rate, time to hire, employee engagement, overtime hours, and absenteeism. These metrics help optimize workforce efficiency, manage labor costs, and improve productivity.
Companies typically measure workforce productivity by output per employee or output per hour worked, reflecting how efficiently employees complete tasks. Other metrics (e.g., task completion rates, revenue per employee, and performance reviews) provide a clearer view of overall productivity and identify areas for improvement.
Workforce planning metrics help forecast future staffing needs and align them with business strategies. Key metrics include talent demand vs. supply, succession planning, skills gap analysis, and headcount forecasting. These metrics ensure the right talent is in place for long-term success.
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Monique Verduyn has been a writer for more than 20 years, covering general business topics as well as the IT, financial services, entrepreneurship, advertising, pharmaceuticals, and entertainment
sectors. She has interviewed prominent corporate leaders and thinkers for many top business publications. She has a keen interest in communication strategy development and implementation, and has worked with several global organisations to improve collaboration, productivity and performance in a world where employees are more influential than ever before.
