Key performance indicators (KPIs) are analytics that are available on the Human Resources dashboard. These KPIs can identify special metrics for your reference.
Employee Turnover Rate
The employee turnover rate takes into consideration the number of employees who have left the company compared to the total workforce numbers. This can be used as a benchmark to track your organization's progress in reducing turnover and improving employee retention over time. This is the calculation:
((Number of Employees Who Left) / (Total Number of Employees)) x 100
Example:
Company A had 100 employees at the beginning of 2024 and during the year, 10 employees left the company (voluntarily or involuntarily). This is our calculation: (10 / 100) x 100 = 10%
This means that Company A had a turnover rate of 10% for 2024.
Absenteeism Rate
The absenteeism rate KPI can be used to evaluate the impact of absenteeism on productivity, identify trends, and develop strategies to reduce absenteeism. This is the calculation:
((Total Number of Days Absent) / (Total Number of Scheduled Working Days)) x 100%
Example:
Company A had 100 employees who are scheduled to work 260 days in 2024. The total number of days absent for all employees in the year is 500. This is our calculation: (500 / (100 x 260)) x 100% = 1.92%
This means that on average, each employee was absent for 1.92% of their scheduled working days in 2024 for Company A.
Time to Resignation
Measuring the time to resignation can vary depending on your organization's needs and context, and can be calculated on any time basis - such as quarterly, annually, monthly, or other times. This KPI can provide valuable insights to identify patterns and trends related to employee turnover. For example, if this is low, then it can suggest that employees are leaving the organization too soon. If it is high, then this means that employees are staying with your organization for longer periods, indicating a positive sign of workforce satisfaction and loyalty. This is teh calculation:
(Sum of Days between Termination Date and Hire Date for all Resigned Employees) / (Total Number of Terminated Employees)
Example:
Company A has 100 employees who resigned in 2024. The sum of days between resignation and hire date for all employees is 1500 days. This is the calculation: (1500 days / 100 employees) = 15 days
This means that on average, employees resigned from Company A after spending 15 days in the company during 2024.
Employee Retention
Measuring employee retention is critical since it can assess the effectiveness of your efforts in retaining valuable talent and maintaining a stable workforce. The higher the retention rate, the better productivity, engagement, and organizational success, and the lower the turnover costs and disruptions. This is the calculation:
(((Number of Employees at the End of the Period) - (Number of Employees who Left During the Period)) / Number of Employees at the Beginning of the Period) x 100
Example:
Company A had 500 employees at the beginning of 2024 and hired 50 new employees throughout the year. However, 20 employees left Company A in the same period. At the end of 2024, Company A had 530 employees. This is our calculation: ((530 - 20) / 500) x 100 = 102%
This means that Company A was able to retain 102% of their employees in 2024, indicating a positive retention rate, since it means that more employees stayed with Company A compared to those who left.