10 Key Strategic Workforce Planning Metrics to Measure

One of the best practices of strategic workforce planning is to rely on actionable data rather than vanity metrics and intuition. But what are the relevant metrics your organization should be tracking versus others?

This guide on strategic workforce planning metrics will help you sort things out.

Quantitive Metrics

These metrics can be tracked and analyzed through software or manually (we’re advocates of an automated approach, though). They’ll bring insight into the number of people who work for your organization and their diversification over departments, average lifetime value, and employee turnover.

1. Headcount

Probably one of the simplest metrics you could track, as it represents the overall number of employees at your organization.

To deepen your insights, also track the number of full-time employees within your organization (and the distribution of employees by each department or division unit) to identify bottlenecks like under or overstaffing.

2. Attrition rate

There’s a slight difference between "attrition" and "turnover." Attrition refers to employees who leave the company voluntarily and their position is not backfilled. Common reasons for attrition include retirement, resignment, going back to university or school, health reasons, and even death.

To calculate the attrition rate accurately, you need to divide the number of employees that left the company for reasons that qualify as “attrition” to the overall number of employees and multiple that number by 100.

A high attrition rate — especially among key talent or a certain age group — can be a clear red flag. Failing to address attrition rates in a time can lead to issues transferring necessary knowledge for roles, create skill gaps in the workforce, and impact business goals.

To prevent high attrition rates, invest in retention programs to keep extraordinary talents within the organization. Also be sure to diversify your workforce with multigenerational employees and different employment types, such as contractors.

3. Turnover rate

Another important difference between "attrition" and "turnover" lies in the scale of employees that leave. Simply put, turnover represents the general number of employees that leave positions that need replacement, whether it's internal talents or new hires. Here’s how to calculate the turnover rate:

To dig deeper, you can also calculate voluntary and nonvoluntary turnover rates to find the percentage of people that leave for specific reasons — whether personal or relating to their work environment — and the ones who are dismissed. Most turnover in the U.S. is voluntary, meaning employees leave their jobs to switch companies, relocate, go back to school, etc. Nonvoluntary employee turnover, on the other hand, is usually dismissal due to poor performance, failing to pass a probation period, redundancy, violation of the company’s policy, and so on.

42% of U.S. employees who voluntarily left their employer report that managers or the organization could have prevented their departures, according to Gallup research.

Some of the most common work-related reasons for higher employee turnover include:

• Lack of confidence in company stability and/or leadership
• Decline in employee experience, engagement, or work culture‍
• Inadequate pay or benefits‍
• Increased work demands
• Burnout
• Highly competitive job markets

While high turnover should be avoided, it can provide a strategic workforce planning opportunity, allowing organizations to rethink their employer branding and acquire new, skilled talent that's critical to future workforce needs.

4. Retention rate

Retention rate is one of the greatest concerns for HR managers. It indicates an organization’s success in retaining its employees over a specific period, such as a year or quarter. To calculate it accurately, you need to know the exact number of people on the first day of the specified period and the number of people that left during that time.

The higher the retention rate, the better. However, figures vary depending on the industry. For example, industries with the lowest retention rates include retail, manufacturing, and consumer goods. Because these industries rely on seasonal customer spikes, the average retention rate is typically low.

5. Time-to-hire

Time-to-hire is one of the key strategic workforce planning metrics that helps assess the average time spent fully onboarding new talent. To track this metric for a specific vacancy, you need several inputs: The day the vacancy open, the day the first candidate applied, and the day the final candidate accepted the offer.

Let’s say you opened the vacancy on March 1, received the first application on March 3, and successfully closed the vacancy March 29. You need to take three from 29, and you’ll get 16 — the time-to-hire of a candidate for that specific position.

If you want to calculate your average time-to-hire rate, you’ll need the arithmetical average. Here’s the formula:

Ideally, this metric should be as low as possible, meaning your organization is has good standing in the market and can draw qualified talent. To speed time-to-hire, organizations can look at building a more attractive employer brand and employee value proposition (EVP), implementing referral and opt-in bonuses, offering impressive benefits and compensation, and more.

6. Tenure rate

Tenure is also sometimes called employee lifetime value. It’s an important strategic workforce planning metric that represents the average time employees stay with an organization. If the tenure rate is high, it indicates positive retention efforts and employee engagement.

To assess your tenure rate, you’ll need to sum up the number of days each employee has worked at the organization, divide that number by the headcount, and multiply by 100.

You can modify your tenure metrics and estimate an average number of days, months, or years. Also, you can calculate employee tenure in a specific position, which provides insight into areas for improvement, training opportunities, and internal mobility potential.

7. Internal mobility rate

Internal mobility indicates career opportunities for employees within an organization, including:

• Promotions
• Demotions
• Department transfers
• Shadowing
• Side projects
• Mentorship

Not only can internal mobility improve retention rates, it can also reduce hiring costs, increase upskilling and reskilling potential, and create a more resilient workforce for the future.

8. Absenteeism rate

When employees use work-time to do personal tasks, it obviously leads to low engagement, poor performance, and revenue loss. A high absenteeism rate signalizes unproductive time and helps you implement preventive measures. For that, you’ll need several inputs: The number of unexcused absences and periods, such as a month, quarter, or a year.

Note that absenteeism implies two types of excuses why employees don’t work when they’re supposed to:

• Admissible excuses could include sickness, bereavement, personal time off, working trips, etc.
• Inadequate excuses might be simply not showing up, personal matters, being late, etc.

Studies show that common causes for workplace absenteeism include mental health, childcare, injuries and health, poor morale, disengagement, and harassment. That’s why it’s essential not only to investigate excuses of absenteeism but the root causes as well.

Qualitative metrics

There are also strategic workforce planning metrics you can’t measure directly with software or spreadsheets — but it doesn’t mean they’re invaluable. These qualitative metrics, including employee sentiment, can bring as much insight as quantitative metrics and help dig deeper into the root causes of employee disengagement, bad hires, diversity imbalance, and more.

9. Failed hires rate

Not every hire is a good fit. Businesses typically bring bad hires because of:

• Poor recruitment processes like insufficient candidate screening and defective candidate pipeline.
• Poor onboarding and training that results in poor performance.
• Too much focus on hard skills and match with a job profile rather than soft skills and adherence with culture and values.

To calculate failed hires, you’ll need to specify the length of the probation period (let’s say it’s 90 days), the number of new hires in this period, and the number of people that passed the probation. In this case, the formula would be:

To get to the bottom of failed hires, exit interviews and surveys can provide sentiment data on supervisors and teams, reason for dismissal, suggestions to improve, etc.

10. Employee net promoter score (eNPS)

An employee net promoter score indicates how likely employees are to recommend working at your organizations. In other words, high eNPS scores demonstrate employee loyalty and engagement with a company.

HR experts recommend conducting eNPS surveys at least once a year, though some companies run monthly, bi-monthly, and bi-yearly surveys. Typically eNPS questions asks employees to rate statements from 1 to 10 and provide complete answers to the following questions:

• How likely are you to recommend our company to your friends and relative?
• Why would you recommend our company to other people?
• How can we improve our HR processes to increase the scores?

In the eNPS survey, HR managers outline three types of employees: detractors, neutrals, and promoters. To calculate the ratio of each employee type, you’ll need several inputs:

• The overall number of respondents
• Number of respondents that rated the statements with 9-10 grades (promoters)
• Number of respondents with 0-6 grades (detractors)

No matter what eNPS grade your organization earns, it’s important to listen to feedback and implement necessary changes. To enhance your eNPS, consider gathering more data, such as demographics, departments, and employee tenure. For example, some departments with lower eNPS rates might be due to a team’s lack of leadership or toxic culture.

More Metrics for Workforce Transformation

This isn’t an exhaustive list of strategic workforce planning metrics — there are so many more actionable data insights that can drive smarter talent decisions. For instance:

• Real-time supply and demand
• Hiring difficulty scores for specific roles
• Emerging skills and new competencies
• Locations with diverse and skilled talent pools
• Employer brand ratings

With SWP solutions like TalentNeuron, HR teams can access comprehensive global labor market data for a more holistic approach to solving current and future workforce needs. They can also combine this external data with internal workforce insights to forecast, scenario model, and align with business strategy.

So if your SWP metrics turn out to be too high or too low, you have the tools needed to transform your workforce.