The five most commonly tracked KPIs in human resources are employee turnover rate, cost per hire, time to fill, employee engagement (often measured by eNPS), and revenue per employee. Together, these metrics give HR teams a clear picture of how well they’re attracting, keeping, and getting value from their workforce. Here’s how each one works and why it matters.
1. Employee Turnover Rate
Turnover rate measures the percentage of employees who leave your organization over a set period, usually a year. The formula is straightforward: divide the number of employees who left during the period by the average number of employees, then multiply by 100. If you started the year with 200 employees, ended with 210, and 30 people left during the year, your average headcount is 205 and your annual turnover rate is about 14.6%.
What makes turnover such a critical KPI is the cost hiding behind each departure. Replacing an employee means paying for job postings, recruiter time, interviews, onboarding, and the lost productivity while a new hire gets up to speed. Even a modest reduction in voluntary turnover can recapture significant recruiting, onboarding, and productivity costs. That’s why many HR teams break this metric into voluntary turnover (people who chose to leave) and involuntary turnover (layoffs or terminations), since each type calls for different interventions.
A healthy turnover rate varies by industry. Retail and hospitality routinely see rates above 60%, while professional services firms might target something closer to 10-15%. The number itself matters less than the trend. If your rate is climbing quarter over quarter, that signals a problem worth investigating, whether it’s compensation, management quality, or lack of growth opportunities.
2. Cost Per Hire
Cost per hire tells you how much your organization spends, on average, to fill a single open position. The formula was standardized by SHRM and the American National Standards Institute: add up all internal recruiting costs (recruiter salaries, hiring manager time, referral bonuses) and all external recruiting costs (job board fees, staffing agencies, background checks, travel for interviews), then divide by the total number of hires in that period.
SHRM puts the average cost per hire for U.S. companies at approximately $4,700, though this varies enormously by role. Filling a senior engineering position or a C-suite role can cost multiples of that figure, while hiring for entry-level positions typically costs less. Tracking this KPI helps HR teams evaluate whether their recruiting channels are efficient. If you’re spending heavily on external agencies but most of your best hires come from employee referrals, the data makes the case for shifting budget toward a referral program.
3. Time to Fill
Time to fill (sometimes called time to hire) measures how many days pass between opening a job requisition and a candidate accepting the offer. It captures the full recruiting cycle: posting the job, sourcing candidates, screening, interviewing, and extending an offer.
This KPI matters for two reasons. First, every day a role sits open costs the organization in lost productivity, overtime for the team covering the gap, or revenue that isn’t being generated. Second, a slow hiring process loses candidates. In competitive labor markets, top applicants often accept another offer if your timeline drags past a few weeks. If your average time to fill is 45 days but a competitor closes in 25, you’re fishing from a shrinking pool.
Improving time to fill doesn’t mean rushing decisions. It usually means identifying bottlenecks: slow interview scheduling, too many approval layers, or vague job descriptions that attract the wrong applicants and force the process to restart. Tracking it by department or role type helps pinpoint where the delays actually live.
4. Employee Engagement (eNPS)
Employee engagement measures how connected and motivated your workforce feels, and one of the most efficient ways to quantify it is the employee Net Promoter Score, or eNPS. The survey asks one simple question: “On a scale of 0 to 10, how likely are you to recommend this company as a place to work?”
Responses fall into three groups. Employees who score 9 or 10 are promoters, meaning they’re genuinely enthusiastic about working there. Scores of 7 or 8 are passives, people who are satisfied but not strongly attached. Anyone scoring 0 through 6 is a detractor, someone who’s dissatisfied and potentially spreading that sentiment to coworkers or on review sites. The formula is simply the percentage of promoters minus the percentage of detractors. A company where 40% of employees are promoters and 20% are detractors has an eNPS of 20.
Scores can range from negative 100 to positive 100. Anything above zero is generally considered acceptable, while scores above 30 suggest strong engagement. The real power of eNPS comes from tracking it over time and pairing it with follow-up questions. A dropping score after a reorganization or a policy change tells you something specific. Without that second layer of context, you know there’s a problem but not what’s causing it.
5. Revenue Per Employee
Revenue per employee measures the financial output your workforce generates. The math is simple: total revenue divided by the number of full-time equivalent employees. If a company brings in $50 million with 250 employees, its revenue per employee is $200,000.
This KPI bridges the gap between HR and finance. It helps leadership understand whether headcount growth is translating into proportional revenue growth, or whether the organization is becoming less efficient as it scales. A declining revenue-per-employee figure after a hiring spree might indicate that new hires haven’t been onboarded effectively, that roles weren’t truly needed, or that productivity is lagging.
A related metric, human capital ROI, goes a step further. It’s calculated as revenue minus operating costs, divided by total labor costs. If a company generates $10 million in revenue, spends $7 million on operating costs, and allocates $2 million to labor, the human capital ROI is 1.5. That means every dollar spent on labor returns $1.50 in value. This framing helps HR leaders make the business case for investments in training, compensation, or retention programs by tying those investments directly to financial outcomes.
Turning KPIs Into Action
These five metrics are most useful when tracked together rather than in isolation. A low cost per hire looks great on its own, but if your turnover rate is high, you may be hiring cheaply and losing people quickly, which is more expensive in the long run. Similarly, strong engagement scores paired with declining revenue per employee might indicate that employees are happy but under-challenged or misallocated.
The framing matters, too. Presenting these numbers in business terms makes them land with executives. Instead of saying “we improved retention by 5%,” translate that into dollars: “We saved $X in recruiting costs and protected margins by reducing turnover.” Instead of “we upgraded onboarding,” say “new hires reached full productivity 10 days faster, generating an additional $Y in output.” KPIs give HR a seat at the strategy table, but only if the story behind the numbers is told in language the rest of the business speaks.