Effective talent management is the key to a successful business. With the right strategy, you can create a thriving company, retain your top talent, and stand out in a competitive marketplace.

People are your organization’s greatest asset and resource, and supporting them to be effective and efficient and contribute to your company’s broader objectives is essential for a successful HR team.

That means giving your people the tools and resources they need to develop their skills and progress and having an effective succession plan when people do move on.

But making clear decisions about your talent management strategy is impossible without clear information—which is where talent management metrics come in. They are a key tool for HR teams to gauge the impact of talent strategies. From recruitment and onboarding to training and development, retention programs, and succession planning, it’s important to understand what’s happening at every stage of the employee lifecycle.

With the right metrics, it’s possible to make decisions informed by data that enhance engagement and provide time and space for clear workforce planning and well-crafted talent management strategies.

What are talent management metrics?

Talent management metrics are a series of measures HR professionals use to track the effectiveness of a business’s talent management strategies. By tracking your performance against a set of KPIs, you can understand the strengths and weaknesses in your overall approach so that you can better attract, develop, and retain the best staff in the future.

A talent management metrics report featuring clear KPIs is also an effective tool for influencing senior stakeholders and securing support for and investment in your people-focused HR programs.

Why measure talent management KPIs?

Without data, it’s impossible to know exactly how effective your talent management system is. Talent management KPIs provide a clear picture of the link between your HR policies and business goals, helping you identify ways to improve satisfaction levels, reduce turnover, and boost productivity. Done correctly, this supports stronger foundations that help you compete in a busy market.

11 example talent management metrics 

With today’s technology, you can measure a huge number of talent metrics to better understand the impact of your talent management strategies.

These are the most important 11 metrics to start with:

Metric 1: Turnover rate

Your turnover rate is the fundamental measure of how effectively you are retaining people in your business. The proportion of team members who leave within a set period can give you a powerful insight into wider employee satisfaction.

Here’s how you measure it:

Turnover rate = Number of leavers/Total number of employees x 100

Remember to calculate for set time frames to see more localized impacts

Metric 2: Time-to-fill

The time it takes you to fill open job roles can shed light on a range of factors related to your company.

A slow time-to-fill might reflect wider hiring challenges for your sector, a weak employee value proposition, or inefficient internal decision-making processes. On the other hand, a fast average time-to-fill can indicate that your recruitment process is highly efficient, your internal thinking is joined up, and that roles at your company are seen as desirable.

Remember not to confuse time-to-fill with time-to-hire, which works slightly differently and focuses on the length of time it takes for a chosen candidate to accept a job offer.

Here’s how you measure it:

Time-to-fill = Number of days between the job request first being sent to HR and the offer acceptance, totaled for all recruited roles/Total number of recruited roles

Metric 3: eNPS

Your employee net promoter score (eNPS) is the ultimate record of your people’s satisfaction levels. For HR teams, it’s the gold standard for measuring happiness at work.

Typically included as part of a regular talent management survey, it simply asks team members to rank how likely they are to recommend working for the company on a scale of zero to 10. It can give a powerful indication of satisfaction within your teams and across your entire organization.

Here’s how you measure it:

eNPS: Ask your employees to rate how likely they are to recommend working for the company on a scale of zero to 10. Then, divide them into:
“promoters” (9-10)
“passives” (7-8)
“detractors” (0-6)

Finally, use the following formula:
(Number of Promoters – Number of Detractors)/(Number of Respondents) x 100

As a rough guide, a score between 10 and 20 is reasonable, from 20 to 30 is good, and above 40 is outstanding.

Metric 4: Cost-to-hire

Cost-to-hire is unsurprisingly one of the most commonly used HR metrics as it gives a clear indication of the affordability of your recruitment. Naturally, finance leaders and senior management will appreciate an economical recruitment process that maximizes return on investment.

On the other side of the same coin, it also provides a clear indication of the cost of a high turnover rate. This might, for example, help you make a strong case for enhanced training and development programs.

Here’s how you measure it:

Cost-to-hire = Total recruitment costs/Number of recruited roles

Metric 5: Internal mobility rate

Internal mobility can be a powerful indicator that you are effectively harnessing the talents and skills of your people. If team members are finding pathways to progress in your company, or moving sideways into different career paths, it can reflect a healthy culture of growth.

Here’s how you measure it:

Internal mobility rate = Number of internal movements/Average number of employees x 100

Remember to calculate for set time frames to measure the impact of different programs.

Metric 6: Quality of hire

Measuring quality of hire is a great way of identifying any changes you need to make to your recruitment process. It summarizes the performance, cultural fit, and retention rate of new hires across your teams.

If you score well here, it means that you are recruiting the right people, that managers are supporting an attractive work environment, and that new recruits are performing well.

One of the trickier metrics to measure, you’d typically evaluate quality of hire by looking at a combination of scores such as performance appraisals along with your new-hire retention rate and engagement scores. By balancing these calculations, you can take a qualitative view of how effective your recruitment processes are, at the end of an onboarding process and throughout a recruit’s time with your company.

Here’s how you measure it:

Quality of hire = (Performance appraisal score + retention rate + engagement scores)/3

Metric 7: Compensation competitiveness

Compensation is an important part of any job offer, and keeping pace with market value is key to supporting your recruitment and retention efforts. As always, the best decisions are made with the support of clear data, so the competitiveness of your compensation (taking into account your salary offer as well as benefits) is a crucial metric to drive your talent management strategy.

To measure it, use a compensation benchmarking tool that gives you the data you need to make like-for-like comparisons with roles at your company according to the market. The best tools will show you how competitive your salary and benefits structure is across different roles and levels of seniority. Also, keep a record of any exit interview data that suggests that people leaving your company are doing so due to your compensation levels.

Here’s how you measure it:

Average compensation competitiveness = (Total salary and benefits package – average competitor package)/Total salary and benefits package x 100

Calculate the averages across different job roles for a wider insight.

Metric 8: Absenteeism rate

Your absenteeism rate measures the frequency of unscheduled absences in your company and can uncover surprising patterns that emerge from them. It can give you an idea of any negative trends in the wellness and engagement levels of your people.

It’s important to frequently monitor this KPI to catch any negative trends. That way, you can identify strategies to reverse these trends and improve employee happiness before you potentially lose any of your talent.

Here’s how you measure it:

Absenteeism rate = Total number of unscheduled absences/Total working days x 100

Metric 9: Training spend

It’s useful to compare the amount you spend on training your team members alongside retention and mobility figures to identify any causality between specific programs and reduced turnover.

Today, professionals expect there to be room for upskilling and career growth, and this metric can help you understand if you are investing enough in training to help you retain talent.

Although this metric doesn’t directly capture the quality or effectiveness of your training programs, calculating the spend per employee can give you a good overview of your budget commitment and the volume of training taking place within different teams.

Here’s how you measure it:

Training spend = Total amount spent on training programs/Total number of professionals

Metric 10: PTO utilization rate

Your PTO utilization rate is a measure of how many vacation days your people are actually taking. If certain teams or individuals are failing to take sufficient leave, it can indicate that they are overloaded, or are in danger of burning out. This might trigger reminders to employees to take time off before a specific date or to managers who need support encouraging their team to take time off.

It’s not only an important measure for HR professionals—your colleagues in finance will also need this figure to calculate final paychecks for departing team members.

Here’s how you measure it:

PTO utilization rate = Total number of PTO days taken/Total number of PTO or vacation days available x 100

Metric 11: Yield ratio

This metric specifically relates to your recruitment efforts and captures the efficiency of your hiring process. Essentially, it tracks how many candidates it takes for you to find and secure a new recruit.

Used correctly, each ratio can give you an insight into the effectiveness of a different stage of your recruitment, from initial application to an interview offer, from interview to job offer, and from job offer to new hire. If you find you have a low ratio in one of these areas, it might suggest the recruitment step requires more attention to improve your candidate quality. Equally, a high yield ratio might suggest that the test or decision-making framework you are using isn’t entirely effective in narrowing down your candidate selection.

Here’s how you measure it:

Applicant-to-interview-offer yield = Number of applicants offered an interview/Total number of initial applicants x 100

Interview-to-job-offer yield = Number of applicants offered a job/Total number of applicants interviewed x 100

Job-offer-to-hire yield = Number of new hires/Total number of job offers x 100

Calculating each of these ratios separately shines a spotlight on each stage of your recruitment and can reveal flaws in your initial screening, your interview process, or your final offer and compensation package.

Talent management metrics best practices

There are a few best practices to follow when establishing your talent management metrics:

  • Monitor your results regularly to check for anomalies
  • Review and update your chosen metrics as your business goals evolve
  • Keep on top of your data collection so that you can be sure it is accurate and consistent
  • Establish a clear review pattern, powered by an efficient metrics dashboard for an easy overview
  • Share your findings with senior leaders and stakeholders across the business to support a wider understanding of the metrics and their meaning

Talent management KPIs: Tracking, analyzing, and reporting

Today, HR professionals can take advantage of powerful HR technology to help monitor and analyze talent management strategies and achieve HR goals.

Modern HR tech features automated tools that can make collecting data and tracking your metrics an easy and efficient process so that you can spend more time on interpretation and taking action. Some of the most sought-after features for talent management metrics and analytics include customizable dashboards, pre-built templates, and automated reports so HR teams can make better-informed decisions faster.

Measure, enhance, and succeed with talent management metrics

Regularly measuring the success of your talent management strategy is the secret to guiding your business to a productive future. By keeping a keen eye on every stage of the employee lifecycle, you can respond to changing needs and support a workplace culture where people can develop, grow, and learn.

In doing so, you will attract and retain the best professionals out there, and keep your most precious resource performing at the top of their game.

Dana Liberty

From Dana Liberty

Dana Liberty is a content manager at HiBob, where she combines her creative writing with performance marketing. In the winter, you’ll find her sitting by the fire with a glass of wine, trying to solve the latest word puzzle (and in the summer, she cuts out the fire, but never the wine and puzzles).