... ...

Every business needs up-to-date insight into how the workforce performs, what contributes to the bottom line, and what it costs. There are many ways to measure workforce performance. The most effective way is to predict future trends based on historical data. 

While there are many critical metrics, we’ve chosen five critical metrics for tracking the status of the workforce and predicting where it’s going, as they all, directly and indirectly, contribute to value creation.  

1. Retention

Two metrics show how well an organization retains employees: turnover and tenure. Employee turnover, defined as losing employee resources over time, is a significant problem for many businesses. Replacing employees incurs costs for recruitment and training while lowering productivity as new workers come up to speed. 

The pandemic increased turnover rates in many industries. According to the Bureau of Labor Statistics, the voluntary turnover rate was 25 percent in 2021; the rate for involuntary turnover was 29 percent. In the past, the average rates were 12% for voluntary and 6% for involuntary. The temporary crisis in workforce retention has forced many businesses to offer bonuses and other incentives to keep employees from quitting.

Tenure is a metric that describes how long employees stay with the company. Analyzing this metric can reveal important details about the workforce. Having employees with long tenure is good if they’re high performers; having poor performers with long tenure is terrible for profitability and morale.

2. Time-to-Hire

Knowing how long it takes to find and hire new employees is essential for strategic planning. The process includes tracking the elapsed time from when a position becomes available until a candidate has accepted the job offer. For maximum efficiency, this number should be as low as possible. 

To decrease hiring time, cultivate an engaged and satisfied workforce. 

Word-of-mouth and internal referrals are some of the most effective recruiting tools. It pays to have created a positive company culture in this area. Competitive compensation and benefits are also vital factors in the time-to-hire metric.

3. Productivity

Productivity metrics track how efficiently the workforce completes assignments. You can measure it for an entire organization, a team, or a single team member. Depending on the job description, metrics for productivity can be the hardest to define. The most straightforward metrics link inputs to outputs. Sales and marketing teams produce measurable output, but that’s not true for all jobs. 

For some positions, timesheet data can be used to track productivity. Employees must track their time, either manually or with workforce management software. Gathering data about how employees spend their time has the added benefit of promoting transparency and accountability. 

Qualitative metrics can also be used to measure productivity. Peer reviews like the 360-degree feedback method are one example. Supervisors, co-workers, and subordinates respond to questions about an employee’s contributions and work-related behavior, and the results are shared with management and the employee.

4. Total Cost of Workforce

This metric represents all workforce-related costs. It’s important to look at this metric regularly to align workforce planning with an organization’s strategic goals. 

According to the Society for Human Resource Management (SHRM), “While most HR professionals can tell you what their company spends on salaries and benefits, fewer know the full amount invested in human capital. Experts call it total cost of the workforce (TCOW), a metric that may include various labor costs such as recruiting, onboarding and training besides salaries and benefits.”

5. Revenue-per-Employee Ratio

Revenue metrics look at how much money employees bring into a business. In tiny companies, it may be obvious how much revenue each employee generates. This isn’t possible in most organizations. Instead, you can calculate an overall metric by dividing revenue by the number of employees. The result is the revenue-per-employee ratio. Besides measuring performance, this metric is useful for finding how much the loss of an employee costs the business.  

This isn’t an exhaustive list of workforce management metrics, but it’s a good starting point. Remember that metrics that are tied to strategic actions will be the most effective in helping your organization meet its goals. 


Keep Reading

An employer balancing the pros and cons of a productivity management system versus an all-in-one workforce management system.

How to Prepare Your Team to Implement a New Workforce Management Solution

Strategic workforce planning leads to better business, HR, and talent outcomes – but only if your workforce adopts the planning tools that make those outcomes possible. User acceptance is a key metric measuring adoption. Once you’ve figured out the technical (e.g., features, functions), cost, and compliance complexities of implementing new workforce management software, clients are […]


The Benefits of Employee Management Software for Small Businesses

“The purpose of an employee management system is to help improve workforce productivity, identify ways to engage and retain talent and alleviate administrative burdens for HR professionals. Achieving greater efficiency through the use of technology can also help control costs and minimize compliance risks,” according to payroll services provider ADP. Accurate Time and Attendance Tracking […]


Why Businesses Need All-In-One Workforce Management Software: Benefits and Features to Look For

This is where all-in-one workforce management software like coAmplifi comes into play, offering a comprehensive solution for organizations to streamline their operations working in blended remote, hybrid, and onsite work arrangements. The Future of Work in an Ever-Changing Work Environment We’re now living in the work-from-anywhere era where many team members want to avoid being […]