5 metrics you should measure to better manage your workforce


It’s often been said that, “what gets measured gets done.” And nowhere does that sentiment ring more true than when measuring the effectiveness of your workforce. You need a clear and current picture of the value your employees are bringing, and how they impact the bottom line. To make sure your workforce is as optimized as possible, consider these five metrics.


A tried and true measure of how much your workforce is getting done. The Houston Chronicle recently featured a simple-to-follow formula for calculating productivity. While far less analytical, leaders of smaller teams should consider time tracking tools and methods to build awareness around office productivity. Even something simple such as having employees provide a time sheet with a list of everything they worked on once a week encourages accountability, without requiring heavy-handed micromanagement.


Turnover can be costly to any organization in a range of ways such as lowered productivity, training costs, and lost knowledge. So closely tracking your retention and attrition rates is essential to optimizing your workforce. While turnover is generally viewed as a negative, it’s also important to understand who is leaving -- your stars or your slackers. That’s why an even more revealing metric can be measuring the high-performer turnover rate. To calculate that, take the total number of high performers that leave during a defined time period and divide it by the average high-performer total headcount.

Revenue per Employee

Profitability is essential for any successful organization, so it’s important to track how much revenue is generated per each employee. To calculate, simply divide total revenue by total number of employees. This calculation not only helps in measuring what employees contribute to the bottom line, but also provides insight into evaluating the cost of a lost employee due to turnover.

Total Cost of Workforce

This is the sum of all workforce related costs, including all compensation, benefits, and other employee costs of full-time and contingent workers for the organization in a given period of time. This metric helps paint a true picture
 of your workforce spend. That helps you make better informed workforce strategy decisions, particularly when it comes to staffing.

Effectiveness ratio

To track this metric calculate how much gross profit the company gets for every dollar spent on salary for full-time and contingent employees. Accounting entrepreneur W. Michael Hsu was recently featured in RhodiesWorld online magazine emphasizing the importance of calculating the effectiveness ratio. "Results and value-add trumps hours of work any day of the week…” he said. “It's better than measuring profit against time because we want the team to work smarter, not longer.”

No doubt about it, what gets measured gets done. Metrics can help drive results and lay the groundwork for continuous improvements. Ultimately, it's a win for your high-performing employees and a win for your organization's bottom line.