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Hannah Taylor

15 Workforce Planning Metrics: How to Measure What Matters

What's the key to better workforce management decisions? The right data. Here's a rundown of the essential workforce planning metrics you should be tracking.

Making decisions about your future workforce isn’t easy. The larger your workforce and the more complex your organizational structure, the more factors there are to consider.

Luckily, there is just one thing you need to become a master at workforce planning: data. By measuring and reporting the right HR metrics, you can begin making better workforce management decisions.

With dozens of data points to leverage, how do you decide which ones matter? And how do you go about measuring them? Today, we’re breaking down 15 workforce planning metrics that will help you improve HR processes and support your company’s success. Let’s dive in!

  1. Employee turnover rate
  2. Retention rate
  3. Diversity and inclusion metrics
  4. Time to fill positions
  5. Headcount
  6. Cost per hire
  7. Absenteeism
  8. Overtime costs
  9. Resource utilization rate
  10. Billable vs. non-billable utilization
  11. Employee engagement (eNPS)
  12. Manager-to-employee ratio
  13. Skill and competency gaps
  14. Training and development ROI
  15. Internal mobility rate

What are workforce planning metrics?

Workforce planning metrics are any workforce-related data points that will help you better understand and manage your employees. From team performance to individual utilization, there are countless metrics you can use to inform future planning.

How can strategic workforce planning metrics be helpful?

By tracking and analyzing workforce data, you can make better decisions about your future workforce needs. For example, uncovering which individual employees are the most profitable can inform promotion decisions, while having an overview of utilization can help managers reallocate resources during downtime. In short, leveraging workforce analytics supports data-informed decision-making during your workforce planning process.

However, you don’t need to measure everything. To get the most out of your workforce planning metrics, you need to understand what information will be most beneficial to your organization.

Defining how workforce planning impacts the business’s goals will help you decide which metrics to spend time measuring. Tracking workforce metrics can be time-consuming, so it’s important not to waste time on metrics your team won’t use.

15 meaningful workforce planning metrics to track

Next, let’s explore 15 of the most valuable strategic workforce planning metrics and how they can inform your future workforce planning initiatives.

1. Employee turnover rate

Every business, from agencies to IT consultancies, needs to understand its employee turnover rate. This metric measures what percentage of employees left the business over a set time period.

This number can then be divided into two categories: voluntary turnover and involuntary turnover.

Understanding your voluntary versus involuntary turnover rates can help you determine what percentage of people left the company voluntarily, who left due to retirement, and who you let go.

A high voluntary turnover rate could be indicative of poor employee satisfaction, a toxic work environment, or a lack of career advancement, helping inform employee retention strategies. A high involuntary turnover rate could point toward issues with employee performance or an ineffective recruitment process.

How to measure employee turnover rates: (Number of employee exits / average headcount) x 100 = turnover rate (%).

2. Retention rate

The opposite of turnover, your employee retention rate reveals how good your company is at retaining employees over a set period of time. Tracking your retention over the course of a year would reveal what percentage of your workforce remained with the company. 

A high retention rate means better employee well-being and reduced recruitment costs, whereas a low retention rate suggests you need to work on your retention strategy.

How to measure employee retention rate: (Number of employees retained / headcount at start of tracked period) x 100 = retention rate (%).

3. Diversity and inclusion metrics

In today’s world, building a diverse workforce is non-negotiable. So, how diverse is your organization?

Diversity and inclusion metrics look at how many different groups are represented in an organization and what percentage of the workforce they make up. For example, you will want to look at which gender identities, races, ages, neurocognitive abilities, and more are represented in your workforce.

If your workforce isn’t as diverse as it could be, you can use this data to inform future hiring practices, promotion decisions, and talent management. Building a diverse workforce supports a strong workplace culture, so it’s important to seek out applicants who can bring unique perspectives to the business.

4. Time to fill positions

Time-to-fill answers the question, ‘How long, on average, does it take your HR department to fill vacant positions?’ 

Not only does understanding your average time-to-fill make it easy to identify when a role is taking too long to fill, but it can uncover opportunities to streamline your hiring process and reduce hiring costs.

To measure your average time to hire, just add up the number of days it took to fill each role advertised over a given period and divide that number by the number of roles advertised. Easy!

5. Headcount

Headcount simply refers to the number of people working in your organization. You can also break headcount down across departments as well as categories of employees, including full-time employees, part-time workers, and contracted positions.

Understanding your headcount allows you to monitor the health of your organization and whether you have the resources (AKA, number of people) to reach growth goals and maintain ideal operational efficiency.

6. Cost per hire

Hiring is a costly process, so it’s important to understand how much the business spends on filling vacancies, including advertising fees, paying HR salaries, and other costs. This helps you streamline recruitment activities and plan for future recruitment drives.

How to calculate cost per hire: Total spent on recruitment / number of roles filled = average cost per hire.

7. Absenteeism

Absenteeism is when employees take unplanned leave, either due to illness or other unexpected personal reasons.

The goal of tracking unplanned absences isn’t to reprimand employees with high rates of absenteeism but to monitor the health of your workforce and identify when corrective measures need to be taken.

Frequent absenteeism can be caused by a whole host of factors, including physical illness, personal circumstances, and chronic stress or depression. Regular absences due to stress-induced illness may indicate poor employee engagement and potential risk of future voluntary turnover caused by burnout. 

How to calculate absenteeism: (Number of days missed / number of planned work days) x 100 = absenteeism rate (%).

8. Overtime costs

Are your employees regularly working overtime? Whether your business pays for overtime or not, it’s important to know when employees are working additional hours — and how much it’s costing you.

Excessive unpaid overtime can point toward poor workload management and lead to low employee satisfaction and burnout, whereas paid overtime can be costly for the business.

9. Resource utilization rate

How productive are your employees? Tracking utilization rates will help you find out.

This metric tracks how much of an employee’s work time is spent on activities that benefit the company. Employee utilization should sit around 80% (100% is impossible — humans aren’t machines), with the other 20% spent taking breaks or engaging in training.

The simplest way to track utilization is to ask employees to fill in timesheets. Low utilization can point towards underutilization and poor resource management, workflow inefficiencies, worker inefficiencies, and more.

10. Billable vs. non-billable utilization

Utilization can be split into two categories: billable utilization and non-billable utilization.

Billable hours are those employees spend working on tasks that generate profit for the business, usually client work. Non-billable hours, on the other hand, are those spent on tasks that indirectly support the business, such as internal projects or admin.

You can use these actionable insights to optimize the allocation of resources between profit-driving activities and other tasks, supporting efficient resource management and long-term company success.

11. Employee engagement (eNPS)

Employee net promoter score (also known as eNPS) is a clever way of gathering employee feedback and measuring engagement. This one-question survey asks employees to rate how likely they are to recommend their employee’s products or services to others on a scale of 0 to 10.

Employees with high scores (9-10) are known as ‘promoters’ while those with low scores (0-6) are ‘detractors’. This metric not only reveals which employees believe in the value of your product but also whether they find their work fulfilling.

In short, a higher employee net promoter score indicates a more engaged workforce.

12. Manager-to-employee ratios

According to Gallup, most large companies have around one manager for every ten employees. Your business’s ideal manager-to-employee ratio will depend on many factors, including its organizational structure.

Whether your business uses a hierarchical or flat structure, it’s important to keep an eye on this ratio. A high manager-to-employee ratio may indicate a lean management structure, but it also risks manager burnout if workloads are too full. A low ratio, with fewer employees to each manager, can enhance employee support, but it also has the potential to lead to micromanagement issues.

Calculate your manager-to-employee ratio by determining how many employees there are for every manager. For example, a workforce with 40 managers and 400 employees would have a 1:10 ratio.

13. Skill and competency gaps

What knowledge and experience do you expect your employees to have? What areas do you need to invest in to help your business succeed?

Keeping track of employees’ skill sets ensures your workforce has the right competencies to face anticipated challenges and thrive in a changing business landscape. Perhaps most importantly, you can plan to plug identified competency gaps with development and training programs.

14. Training and development ROI

As training delivers intangible benefits, you’ll need to define clear objectives to measure them and assign each a monetary value. Examples include employee productivity or client satisfaction. By quantifying the financial value of training initiatives, you can make data-driven decisions about future investments during workforce planning

Calculate ROI using this formula: (Monetary value of post-training benefits - total training expenses) x 100 = ROI (%).

15. Internal mobility rate

Internal mobility rate relates to the number of people who move onto new positions within your company. This can include lateral moves to other departments or new positions, promotions, and even demotions.

A high mobility rate suggests you have a strong succession plan and don’t allow employees to stagnate in their roles.

Here’s how to calculate internal mobility rate: (Total number of job moves / headcount) x 100 = mobility rate (%).

How to track strategic workforce planning metrics

Tracking your strategic workforce planning metrics can be time-consuming, but the hard work is worth it — if the people data you’re collecting is accurate. Thankfully, with workforce planning tools, you can ensure the data you’re collecting and reporting on is accurate and relevant to your goals. 

A handy resource management tool like Runn makes tracking utilization, skills, and overtime incredibly easy. Runn allows you to track and report on your business’s workforce planning metrics in just a few clicks. From profitability analytics that reveal how profitable individuals are to the organization to resource utilization reports that monitor productivity, Runn uses real-time data to provide a deeper understanding of your workforce and inform your strategic workforce planning process.

Try Runn for free and deliver on your workforce planning goals today.

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