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Mastering HR Metrics:
This is How You Measure EX in SMBs

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Hacking HR Team

Posted on November 16, 2023

At the core of every organization and, particularly, a thriving small or medium-sized business (SMB) lies the secret of success: its employees.

Their experiences, aspirations, and engagement levels often dictate these businesses' success trajectories. That's why an early investment in building an HR strategic function and, particularly, creating the proper HR metrics emerge as the beacon, guiding SMBs through the intricacies of employee experience. But metrics are more than just data points. They represent the essence of every employee interaction, sentiment, and aspiration.

Why we should focus on Employee Experience

Employee experience has become a critical focus area for companies of all sizes in 2023. Why now? Research shows that organizations that invest in experience have 2x higher customer satisfaction and 2.5x greater revenue growth in three years. The reason is simple - how employees feel directly impacts how they treat your customers. 

However, measuring and improving experience can be daunting for small businesses with limited resources. Where should you start? What data matters most?

What Are HR Metrics and Why Do They Matter?

HR metrics are the heartbeat that keeps the system alive and thriving. These numbers on a spreadsheet are more than data; they're the stories, the narratives, the pulse of an organization. Performance metrics measure the success of the business's human side. They help track progress and inform talent decisions. And HR metrics help you understand how well your organization is doing and where it can improve. They connect human experiences to business outcomes. 

Let's dive into a comprehensive breakdown:

  • Assess Performance: Metrics clearly show how well the organization meets its HR objectives.Example: A company has set an objective to reduce its employee turnover rate by 10% in the upcoming year. HR can use the turnover rate metric to track monthly or quarterly turnover rates and assess if the company is meeting its goal. If the turnover rate only decreases by 2% at the end of Q2, HR will need to take stronger action in the second half of the year.

  • Drive Strategy: Data-driven insights can shape future HR strategies, ensuring alignment with broader business goals.Example: An organization's HR metrics reveal that the average time to fill a position is 60 days, which is longer than the industry average. Armed with this data insight, HR decided to revamp its recruitment strategy. It might include investing in new recruitment software, partnering with specialized recruitment agencies, or launching an employee referral program to reduce the time-to-hire.*

  • Predict Trends: HR can expect future challenges and opportunities by analyzing patterns.Example: Over the past five years, HR has noticed a pattern using the employee engagement metric: a dip in engagement scores during Q3. This consistent trend suggests that something in Q3—maybe a lack of vacation days, increased workload, or the absence of team-building activities—affects employee morale. Predicting this trend allows HR to proactively implement strategies, like organizing team outings or wellness workshops during Q3, to counteract the expected dip in engagement.

  • Enhance Employee Experience: Metrics can highlight areas in the employee lifecycle that need attention, from recruitment to retirement.Example: The employee lifecycle metric reveals that there's a significant drop in employee satisfaction scores around the one-year mark. It could show that employees lack growth or engagement after being with the company for a year. To enhance the employee experience, HR might introduce a "one-year milestone" program, offering mentorship opportunities, advanced training sessions, or even a career growth discussion with managers to re-engage employees at this critical juncture.

Unveiling the Core Metrics Driving Modern SMBs

Recruitment Metrics

  • Time to Hire: This metric measures the duration between the job posting and the new hires’ start date. A prolonged time to hire can indicate inefficiencies in the recruitment process or a competitive job market.Example: If you post a job on January 1st and the selected candidate starts on February 15th, the time to hire is 45 days.Strategy: Streamlining the recruitment process, leveraging technology for applicant tracking, and ensuring clear communication with candidates can reduce the hiring time. 

💡Reflection Questions: Is your organization's time-to-hire aligned with your industry peers? How can you optimize your recruitment process?

  • Cost per Hire: This metric calculates the cost of hiring a new employee. It includes advertising costs, recruiter fees, interview expenses, and other associated costs.Example: A company's HR department realizes they're spending significantly on job advertisements on multiple platforms.Strategy: They focus on the two platforms that yield the most qualified candidates, reducing costs without compromising the quality of hires. 

💡Reflection Question: Are there areas in your recruitment process where you could minimize costs without compromising the quality of employment?

Employee Performance Metrics

  • Employee Productivity Rate: This metric evaluates how much each employee produces per hour or year, helping organizations understand their workforce's efficiency.Example: A manufacturing unit finds that its employee productivity rate drops during the afternoon hours.Strategy: They introduce short afternoon breaks with refreshments, leading to a noticeable boost in afternoon productivity. 

💡Reflection Question: Are there tools or resources that could further enhance your team's productivity?

Learning & Development Metrics

  • Training ROI (return on investment): This metric evaluates the effectiveness and value derived from training programs. It measures the benefits gained against the costs incurred in training.Example: If a training program costs $10,000 and leads to a productivity increase worth $50,000, the ROI is 400%.Strategy: Ensuring relevant training content, leveraging modern training methods like e-learning, and regularly updating training materials can enhance ROI. 

💡Reflection Question: How do you assess the effectiveness of your training programs? Are they delivering the desired outcomes?

  • Training Participation Rate: This metric measures the percentage of employees participating in training programs, indicating the workforce's commitment to growth and learning.Example: A software company introduces a new training program but notices a low participation rate.Strategy: They offer the training in various formats, including online, in-person, and hybrid, catering to different learning preferences. This results in a higher participation rate in subsequent sessions. 

💡Reflection Question: How can you make training sessions more appealing to your workforce?

HR Metrics for Employee Experience

Exploring the HR realm we understand employee experience (EX) is fundamental to modern workplace culture. EX covers all employee interactions with a company, from the first interview to their departure, blending aspects of organizational culture, collaborative dynamics, and the digital tools that drive our tasks.

A robust EX is transformative. It amplifies job performance, reduces turnover, and propels business metrics. Organizations promoting employee engagement aren't just leading in profits; they're crafting resonant narratives and fostering brand stories that employees and customers rally behind.

Your employees are the shapers of your potential and current customer perceptions, especially when they are active social media users, which is the new word of mouth. Their engagement levels directly influence your existing customer journeys (and the potential customers you aim to attract to your products or services). Hence, investing in EX is akin to refining customer experience (CX). Brands that value their workforce will naturally earn customer trust and loyalty as an organic result.

Globally, the Employee Experience narrative is ever-evolving. Companies are redefining EX, from embracing flexible work paradigms to launching holistic wellness initiatives. Envision firms advocating for "mental recharge days" or those fostering platforms for open dialogue. These initiatives underscore EX's significance and transformative power in the contemporary corporate world. Some of the Employee Experience pillars are:

  • Onboarding Experience: The initial impressions and training an employee receives.

  • Work Environment: Physical space, tools, and technology provided.

  • Growth Opportunities: Chances for personal and professional development.

  • Feedback Mechanisms: Platforms and methods for employees to voice concerns and feedback.

💡Reflection Question: How would you rate your organization's current employee experience, and where do you see room for improvement?

How to Measure Employee Experience and Satisfaction in SMBs?

Measurement is the first step towards optimization. Critical metrics for gauging Employee Experience include eNPS, turnover rate, and employee engagement scores. These metrics offer insights into employees' overall satisfaction and their likelihood to recommend the company to peers. Companies can regularly monitor such metrics, identify trends, address concerns, and continuously enhance the EX.

Quantifying employee experience offers small and medium-sized companies a clear roadmap for improvement. Tools like surveys provide direct feedback, while metrics like eNPS show a broader view of employee sentiment:

  • Employee Surveys: Direct insights into employee sentiments.

  • Focus Groups allow you to dive into specific areas of concern or interest.

  • Exit Interviews: Gaining insights from departing employees, especially for those who are voluntary resignations

  • Employee Satisfaction Index: This metric gauges overall employee contentment by considering various factors like work environment, compensation, work-life balance, and more.

Tip: Regular feedback sessions, addressing employee concerns promptly, and ensuring a healthy work-life balance can boost employee satisfaction.

  • Employee Engagement Score gauges employees' emotional commitment and enthusiasm towards their organization. Engaged employees are more likely to be productive and loyal.

Tip: Regular surveys like "On a scale of 1-10, how passionate are you about your job?" can help determine this score.

  • Employee Net Promoter Score (eNPS): It measures employee loyalty by asking how likely they are to recommend the organization as a place to work. It's a quick gauge of overall employee sentiment.Example: Ask employees, "On a scale of 0-10, how likely are you to recommend our company as a workplace?" Then, categorize employees as promoters, passives, or detractors based on responses.Strategy: Addressing detractors' concerns, recognizing promoters' contributions, and engaging with passives can improve eNPS.

💡Reflection Question: How does your organization's eNPS compare with industry standards? What steps are you taking to improve it?

  • Turnover Rate: One of the most telling metrics is the turnover rate. It reveals the percentage of employees who leave the organization within a specific timeframe. A high turnover rate can show dissatisfaction, while a low rate might suggest strong employee engagement.Example: If an organization with 100 employees sees ten employees leave in a year, the turnover rate is 10%.Strategy: Addressing a high turnover rate involves understanding its root causes. Regular exit interviews, employee feedback sessions, and workplace culture assessments can provide insights. Implementing mentorship programs, offering competitive benefits, and fostering a positive work environment can reduce turnover.

💡Reflection Question: How does your organization's turnover rate compare to industry benchmarks? What steps are you taking to address it?

Unlocking Insights: The Power of Employee Feedback Surveys

Surveys are a goldmine of direct feedback. Crafting effective surveys is an art. The right questions can unearth deep insights, guiding SMBs in their quest to enhance the employee experience:

  • Frequency of Surveys: Regular intervals ensure up-to-date feedback. You can do quick pulse surveys with 2-3 questions every two weeks, including any topics you consider relevant. Quarterly surveys effectively prevent the over-surveying of employees, maintaining an acceptable frequency.

  • Anonymity ensures honest responses. Also, there are other demographics, such as tenure, age range, gender, department, role, etc., that will play a crucial role in how you will interpret the results and take action.

  • Open-ended Questions allow employees to voice specific concerns or praises and get deeper insights into any areas you may have not even considered adding as close-ended questions.

  • Feedback Implementation: Showcasing changes based on feedback boosts morale and improves your credibility and trust.

  • Strategy: Ensure surveys are concise, relevant, and actionable. Showcase changes made based on feedback to boost confidence and morale.

💡Reflection question: How often do you act on the feedback received from employee surveys?

Elevate Your SMB: Strategies to Boost Employee Experience

Elevating the employee experience is a journey, not a destination. SMBs in 2023 face unique challenges. The road is fraught with hurdles, from attracting top talent to managing operational costs. Yet, designing a robust employee experience strategy can be a game-changer. Focusing on employee satisfaction IS the starting point for SMBs to overcome such challenges; for instance, offering competitive benefits, fostering a culture of continuous learning, and leveraging technology for seamless communication are just a few ways SMBs can enhance the EX:

  • Flexible Work Arrangements: Catering to the modern workforce's needs.

  • Mental Health Initiatives: Prioritizing employee well-being.

  • Continuous Learning: Offering avenues for skill enhancement.

  • Recognition and Rewards: Celebrating achievements, big and small.

  • Strategy: Adopt a holistic approach that addresses every aspect of the employee’s journey, from mental well-being to skill development.

💡Reflection Question: Which areas of employee experience do you believe your SMB needs to prioritize?


Small and medium sized organizations can create the conditions for a more engaged, satisfied, and productive workforce by understanding and effectively leveraging these HR metrics. Each metric offers a unique lens to view the organization's HR health, and together, they provide a comprehensive picture that can guide strategic decisions. 

For SMBs, understanding this interplay is not just beneficial; it's essential. As the business world evolves, those who master the art of measuring and optimizing employee experience will undoubtedly lead the way.

HR Metrics That Matter

💠Download our comprehensive guide: "A Guide To People Analytics: HR Metrics That Matter."

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