Employee retention is a big concern for many organizations this year, and for good reason. There are more job openings than there are unemployed people to fill them, a problem that’s further exasperated by the skills gap, creating a lot of competition for talent. Your employees have many choices about where to work, and likely receive opportunities in their inboxes on a regular basis. Tracking and optimizing for the right HR metrics can help keep a pulse on retention and elevate your HR and People Ops functions in the process.

Employee turnover rate

First thing’s first: you should track your employee turnover rate monthly and annually. This will provide you with insight into trends over time, and potentially help pinpoint events that may have contributed to a higher turnover rate. For example, any big shake ups in your leadership team or an acquisition announcement can lead to above-average turnover.

Break this metric up further by also looking into:

  • Voluntary versus involuntary turnover: Dig further into the reasons for turnover by understanding whether the employee quit, or was let go, and why.
  • Turnover by demographic: Look into whether diversity and inclusion may be playing a role in your turnover, so you can take appropriate steps to improve.
  • Turnover by manager or department: Discover whether certain managers or departments may have a higher turnover rate than others, and help them learn from managers or departments with low turnover rates.
  • 90-day turnover and first year turnover: Understand how much of your turnover is taking place in an employee’s first 90 days, and first year, and why. While some turnover is inevitable, losing employees before they reach full productivity is a very expensive problem to have.

Employee engagement rate

Engaged employees usually feel more connected to their organization, which can have a positive impact on productivity and retention. Keep a pulse on the engagement levels of your team so you can proactively respond before turnover happens.

There are a number of ways to measure employee engagement, including an employee net promoter score or a survey. Ask questions like:

  • How likely is it that you would recommend working at our company to a friend or colleague?
  • Do you feel valued as an employee?
  • Are you satisfied with your career prospects?

Again, tracking this HR metric monthly and annually, and breaking it down by demographic, manager, and new hire engagement levels, can help you discover trends and causes. For instance, you may learn that engagement levels in a given department have dropped since a new manager was brought in. Or you might discover that engagement levels are higher for men, overall, than they are for women. You can then dig deeper to learn why, and take corrective steps to re-engage your employees most at risk of leaving.

Diversity and inclusion metrics

Diversity and inclusion are crucial components of creating a welcoming company culture that retains employees. For example, in the 2018 Women in the Workplace study by McKinsey & Company and LeanIn.Org, one in five women reported being the only woman or one of the only women in the room at work. Two in five women in senior-level and technical roles reported the same. These women are one and a half times more likely to think about leaving their jobs.

Keep track of your diversity data so you can spot imbalances before they lead to turnover. Include the number of employees that identify as each gender and ethnicity at the company level, as well as by seniority and department. It’s also a good idea to include compensation data by demographic to keep an eye on pay equity at your organization.

Get ahead of inclusion issues by adding some related questions to your employee surveys—or even creating a dedicated diversity and inclusion survey. Then, track your progress over time and take necessary steps to build and retain a more diverse organization. Diversity and inclusion are ongoing initiatives, and the work is never fully completed.

Promotion rate

Lack of career advancement is a top reason for voluntary turnover. When you hire great employees, create a career path and development plan to help them reach the next level in their careers. Investing in your employees shows them that they have a future at your organization, and makes succession planning much easier.

Track your employee promotion rate over time, as well as by gender, ethnicity, and department, to ensure your internal candidate pipeline is being utilized effectively. If you find that it slows, managers may need coaching to ensure they’re developing and promoting employees as the organization expects.

Final thoughts on HR metrics

There are certainly no shortage of HR metrics to track and optimize, but these are arguably the most important to improve employee retention efforts. Take the data you glean from these, and combine it with qualitative data learned from employee surveys, feedback, and conversations. Make improvements, and continue tracking your progress over time to see what makes the biggest impact. While you can never expect to retain 100 percent of your workforce forever (and, for innovation purposes, you probably don’t want to), you can certainly get to a more comfortable retention rate—and save a lot of money on turnover costs.


See how it works

Learn how Sapling can help you automate your workflows and connect your people data across your existing systems.

Request A Demo
HR Metrics You Must Track and Optimize This Year