KPIs for employee retention you should measure

8 of August, 2022

Measuring the right KPIs for employee retention is absolutely necessary to evaluate your business’s profitability and financial health. Tracking retention KPIs allows you to identify problems that you can then look further into in order to improve your workforce’s productivity and performance. In this article, we take you through the essential KPIs that every business should track.

Which KPIs for employee retention should I track?

Revenue per employee

= Revenue / Number of employees

This is the most basic of all the employee KPIs. By measuring it, you can ensure that your human resources are not costing you more than the revenue that they are producing.

Profit per employee

= Total profit / Number of employees

This indicator determines raw profitability, that is from which expenses are subtracted. It is a particularly interesting indicator for organizations that comprise remote employees who do not create the same expenses are workers who come to the office.

Employee billable percentage

= (Total billable hours logged / Total hours logged) × 100

You may know this KPI as “utilization rate”. It gives the ratio of directly profitable work to the internal cost of each employee.

Employee efficiency

This metric tells you what value you get from the time worked. There are actually different types of efficiency, and various ways to measure employee efficiency.

Average task completion rate

= Total time spent to complete the task / Number of times performed

This is a great way to figure out how long it takes to complete a particular phase of a project. You will then be able to assess your staff’s efficiency, but also to price more accurately your services.

Overtime per employee

= Total number of overtime hours / Number of employees

A useful indicator to evaluate the well-being and health of your employees. An excessive overtime per employee rate means that you should consider hiring more staff so that your current employees are not overworked.

Employee capacity

= Weekly capacity − Total hours logged

This KPI measures productive performance. That is to say, it tells you which employees are the risk of a burnout and which ones are doing well on that aspect.

Absenteeism rate

By defining your employee absenteeism rate, you can check if your business is within the average or if it is a human resource problem you should deal with. Measuring employee absenteeism is good way of determining if there is some serious dissatisfaction within your workforce.

How do I measure employee retention KPIs?

The easiest way to measure employee Key Performance Indicators is to use a human resource management software. Indeed, it will automatically collect all the data for you and compile it in practical reports. Sesame HR, for instance, gives you access to all sorts of information that you can analyze to point out what aspects of your organization you need to improve. You can get overtime reports, profitability analyses, as well as work inspection reports, among others.