1.0 Total employees and trend

Count of total number of employees at the end of the month. Trend is calculated monthly with the same above formula

2.0 Attrition rate

The formula for calculating the attrition rate (also known as employee turnover rate) in HR is:

Where:

Number of Employees who Left During a Period is the total number of employees who left the organization during the specified time (e.g., a month, quarter, or year).
Average Number of Employees During the Period is typically calculated as:

Average Number of Employees=Employees at the Start of the Period+Employees at the End of the Period2 Average Number of Employees=2Employees at the Start of the Period+Employees at the End of the Period​ Example:

If an organization had 100 employees at the start of the year, 80 at the end of the year, and 20 employees left during the year, the attrition rate would be:

Average Number of Employees:

100+802=90 2100+80​=90

Attrition Rate:

(2090)×100=22.22% (9020​)×100=22.22%

So, the attrition rate is 22.22%.

3.0 Average tenure

Average Tenure is a measure of how long employees typically stay with a company before leaving. It's calculated by taking the total years of service for all employees and dividing it by the total number of employees. Formula:

mathematica

Average Tenure = (Total Years of Service for All Employees) / (Number of Employees)

Number of Employees = The current number of employees at the end of the period (not an average).

Steps:

Add up the total years of service for all current employees.
Divide this sum by the total number of employees.

Example:

If an organization has the following years of service for its 5 employees:

Employee 1: 4 years
Employee 2: 2 years
Employee 3: 5 years
Employee 4: 1 year
Employee 5: 6 years

The total years of service would be:

4 + 2 + 5 + 1 + 6 = 18 years

If there are 5 employees, the Average Tenure would be:

18 / 5 = 3.6 years

So, the average tenure is 3.6 years.

4.0 Absenteeism rate

Absenteeism refers to the habitual non-presence of employees at work. It's important for HR teams to monitor absenteeism as it can impact productivity, employee engagement, and overall company performance. Key Performance Indicator (KPI):

The Absenteeism Rate measures the percentage of workdays lost due to employee absences.

1. Absenteeism Rate Formula:

Where:

Total Number of Absent Days is the sum of all days employees were absent during the period (excluding approved leave like vacation).
Total Number of Workdays is the total workdays for all employees during the same period.

Example:

If your organization has 100 employees and over a month, there were 200 total absent days, the Absenteeism Rate for the month would be:

Total Workdays = Number of employees ×× Workdays in the period = 100×22=2200100×22=2200
Absenteeism Rate = (2002200)×100=9.09%(2200200​)×100=9.09%

2. Absenteeism KPI Breakdown:

   Timeframe: Monthly or Quarterly Target: Set a target percentage to track improvements or maintain healthy attendance levels. Thresholds: Green: Absenteeism is less than 3% Yellow: Absenteeism is between 3% and 6% Red: Absenteeism is greater than 6%

5.0 Payroll Cost Over Time

This KPI measures the total payroll expenses of the organization over a specific time period (monthly, quarterly, or annually). It helps track the growth or reduction in payroll costs and ensures that salary expenses align with budget goals. Formula: Payroll Cost Over Time=∑Total Payroll Expenses for each Period Payroll Cost Over Time=∑Total Payroll Expenses for each Period

Total Payroll Expenses include salaries, bonuses, benefits, overtime, and any other compensation paid to employees.

Example:

January: $500,000
February: $525,000
March: $510,000

Key Insights:

Allows tracking whether payroll costs are increasing or decreasing.
Highlights the impact of new hires, pay raises, or reductions (e.g., layoffs, attrition).

6.0 Average Payroll Cost per Department

This KPI measures the average payroll cost allocated to each department over a given time period. It helps assess whether certain departments are incurring higher salary costs and allows for better budget allocation. Formula: Average Payroll Cost per Department=Total Payroll Cost for DepartmentNumber of Employees in Department Average Payroll Cost per Department=Number of Employees in DepartmentTotal Payroll Cost for Department​

Total Payroll Cost for Department includes the sum of all compensation (salaries, bonuses, benefits) paid to employees in that department.
Number of Employees in Department is the total headcount within the department during the same time period.

Example:

Sales Department: $250,000 total payroll with 25 employees = $10,000 average per employee.
HR Department: $100,000 total payroll with 10 employees = $10,000 average per employee.

Key Insights:

Helps identify departments with higher payroll costs and compare them against other departments.
Useful for assessing if the payroll cost in a department is proportional to its headcount or contribution to the company.

7.0 Overtime Cost Trend

This KPI tracks the total overtime expenses over time (e.g., monthly or quarterly). It helps identify patterns in overtime usage, revealing if the organization relies heavily on overtime, which could lead to employee burnout or unnecessary costs. Formula: Overtime Cost=∑(Overtime Hours Worked×Overtime Pay Rate) Overtime Cost=∑(Overtime Hours Worked×Overtime Pay Rate)

Overtime Hours Worked is the total number of hours employees worked beyond their standard hours.
Overtime Pay Rate is the employee's overtime compensation rate, typically 1.5x or 2x the regular pay rate, depending on labor laws.

Example:

January: $10,000
February: $8,500
March: $12,000

Key Insights:

Identifies if there’s a consistent increase or spike in overtime costs, which may indicate staffing shortages, project deadlines, or inefficient scheduling.

8.0 Average Overtime Hours per Employee

This KPI measures the average number of overtime hours worked per employee who is entitled to overtime. It shows how much extra time employees are spending at work and can be a useful metric for ensuring that overtime is distributed fairly or managed effectively. Formula: Average Overtime Hours per Employee=Total Overtime Hours WorkedNumber of Employees Entitled for Overtime Average Overtime Hours per Employee=Number of Employees Entitled for OvertimeTotal Overtime Hours Worked​

Total Overtime Hours Worked is the sum of all overtime hours logged by employees.
Number of Employees Entitled for Overtime includes only those employees who are eligible for overtime pay under company policy or legal requirements.

Example:

If 50 employees are entitled to overtime and a total of 300 overtime hours were worked in March: Average Overtime Hours per Employee=30050=6 hours Average Overtime Hours per Employee=50300​=6 hours Key Insights:

Helps identify if the workload is unevenly distributed among employees or if certain employees are working excessive overtime, which could lead to fatigue or reduced productivity.
Can indicate the need for additional hires or better scheduling to reduce overtime.