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HR ROI: How to Track HR Data

How to Track Your HR Data

Tracking HR data helps any small business make data-driven decisions about recruiting, hiring, 


onboarding, retention, and HR policy. This section covers how to calculate specific HR ROI measurements, and tips for how to track HR data.

HR ROI Data Calculations 

This section covers how to calculate eleven key HR data calculations.

Calculating Employee Retention Rate

Employee retention rate is a helpful statistic for an employer to calculate – both as a benchmark and periodically (ex: quarterly or bi-annually). The formula is simple. Divide the number of employees who left during a period by the total number of employees at the end of a period to get the percentage.

Sample Inputs

Sample Calculation

Period of Time: Fourth Quarter

Total Employees at Beginning of Q4:24

Total Employees Terminated in Q4: 4

24 – 4 = 20

20 / 24 = .83

.83 x 100 = 83%

Standard employee retention rates are anywhere from 70% - 85% but vary greatly by industry and calculation method (for example, are you measuring only voluntary turnover or all terminated employees?).

Calculating the Cost of Employee Turnover

The cost of losing an employee varies by industry and role at the company. Here are estimates based on a Center for American Progress (CAP) study you can use to estimate your costs:

  • Less than $30,000/year: 16% of annual salary

  • $30,000 - $75,000/year: 20% of annual salary

  • $75,000+/year: Up to 213% of annual salary (highest for hard-to-replace, high earning CEOs)

Now, calculate costs of employee turnover for a period. In the example below, the company has 24 employees (EEs) and had four employees leave during Q4.

Of course, each company is unique. With the right data, you can calculate your specific cost of employee turnover by taking into account the following factors:

  • Lost Productivity

  • Lost Engagement

  • Hiring and Recruiting Costs

  • Orientation and Training Costs

  • Cultural Impact

Calculating Compensation Data

To track historical and current compensation data, collect and analyze the following information:

  • Employee name

  • Employee Class

  • Position

  • Start date

  • Starting salary

  • Current salary

  • Other wage information helpful to your workforce

You can track this information in a spreadsheet, or use HR Software.

Calculating Training and Onboarding Expenses

To calculate training and onboarding expenses, include the following:

  • Personnel Time (time spent to train, prepare, etc.)

  • Training Materials/Supplies

  • Meeting Space

  • Social Activities

This data can be collected in a budgeting spreadsheet, or flagged in accounting software for easy tracking and analysis.

Calculating Recruiting Expenses

To calculate training and onboarding expenses, include the following:

  • Advertising

  • Recruiting Software

  • Networking

  • Personnel Time (time spent screening, interviewing, etc.)

This data can be collected in a budgeting spreadsheet, or flagged in accounting software for easy tracking and analysis.

Calculating Employee Happiness

An easy way to measure employee happiness is with a simple employee survey. Free survey tools are available online, or you can use a printed survey or more sophisticated survey software.

When creating a survey, keep it simple. Include a few targeted questions about happiness, culture, growth, pay, advancement, etc. Use a number scale so results are clearly quantifiable, and only ask about metrics that matter to your business. Survey employees monthly to calculate happiness over time.

Calculating Absence Rate

Absenteeism is defined as employees missing work due to personal illness, personal time off, or

other reasons (usually excluding paid vacation). These absences may be avoidable or unavoidable. Employee absence rate is a simple measurement that helps you understand how many days employees are missing.

Absence Rate = Workdays Lost Due to Absence ÷ ( Average Employee Population x Number of Work Days Available per Employee )

Calculating Revenue Per Employee

Revenue per employee measures the average revenue generated by each employee of a company.

Revenue per employee is calculated by dividing a company’s revenue by its total number of workers (Revenue  ÷ Number of Employees).

Calculating Benefit & Perks Expenses

Each company has a unique package of benefits and perks. To calculate benefit and perks expenses, include the following, as applicable:

  • Benefits (ex: company contributions to health insurance, retirement, or life insurance)

  • Administrative costs

  • Supplies (ex: meals provided, party supplies, etc.)

  • Cell phones

  • Tuition reimbursement

This data can be collected in a budgeting spreadsheet, or flagged in accounting software for easy tracking and analysis.

Tip: Many of these benefit expenses can be offered as a tax-free fringe benefit.

Calculating Time to Fill

Time to fill a position (or time to hire) can be measured with a simple calculation:

Time to Fill = Average days a job is open before it is filled

For this calculation, track the following inputs:

  • Position and department

  • Date job is open/posted

  • Date offer is accepted and/or date candidate starts

This calculation can be tracked using spreadsheets, or using recruiting software that tracks applications and hiring.

Calculating Return on Investment (ROI)

In this guide on HR metrics, we often discuss ROI. What is ROI?

ROI is a performance measure used to evaluate the efficiency of an investment. To calculate ROI, the payback (return) of an investment is divided by the cost of the investment, and multiplied by 100 to get a percentage.

ROI = [(Payback - Investment)/Investment)]*100

Tips for Tracking HR Data

HR metrics don’t need to be complicated. Instead, they should be simple, clear, and connected to your company’s goals and priorities. Here are six tips for tracking HR data as you consider which data points matter to your business.

1. Know Why HR Metrics Matter

As you collect and track HR data, keep in mind why you’re collecting the data and why it’s important. If the data is not clearly connected to a business priority, don’t spend the time tracking or analyzing it.

2. Keep It Simple

As mentioned previously, HR metrics don’t need to be overly complicated. If the metric is not simple, clear, and easily gathered and calculated, it likely will not be used. Track and collect simple, straight forward information that will provide useful insights to your HR and business objectives.

3. Identify How You Will Track Data

From spreadsheets to comprehensive Human Resource Management Systems, there are a variety of tools available to track HR data. An important step is to identify which data you will collect, and how. Read more about data management options here.

4. Know Your Audience

As you collect HR data, some information will be more insightful to HR and some information will be more insightful to the owner or CFO. As you present information, keep in mind the metrics that matter most to your audience.

5. Connect HR Metrics to Business Objectives

The most powerful and useful HR data connects HR metrics to business objectives.

6. Don’t Just File Data Away - Share It

You’ve collected a lot of great HR data. Don’t just file it away. Analyze it. Learn from it. Share it with your leadership team. Create actionable next steps.

5 HR Data Points Every Small Business Should Track