Data plays an increasingly central role in business success.

That said, not all data is equally useful. For HR teams, the real challenge is identifying the metrics that matter most and tracking them consistently in line with company strategy.

In this article, we’ll look at what an HR KPI is, how it differs from an OKR, and the value it can bring to a business. We’ll also share a detailed list of key metrics companies can use, along with guidance on the tools best suited to organize and manage them.

If you’re trying to understand which HR KPIs should take priority in your business, this is the right place to start.

What Is a KPI?

A KPI, or Key Performance Indicator, is a metric used to track performance in any area of the business. Its purpose is to measure, in quantitative terms, how a specific activity is performing against a defined goal.

In practical terms, KPIs turn raw data into actionable information, making it easier to improve processes and make better decisions.

To deliver real value for HR and for the business more broadly, HR KPIs need to meet a clear set of criteria summarized by the SMART framework: Specific, Measurable, Achievable, Relevant, and Time-bound.

In other words, they need to be specific, measurable, realistic, relevant to the business, and tied to a defined timeframe.

One example of an HR KPI would be reducing average time to hire from 37 days to 35 over the course of 2025 through a series of initiatives designed to speed up the recruiting process.

How KPIs Differ from OKRs

In recent years, some companies have started replacing KPIs with OKRs, or Objectives and Key Results.

The distinction is subtle, but important. OKRs are more forward-looking performance management tools. They push organizations to define an ambitious objective — often one that is not strictly measurable on its own — and then identify a set of quantitative key results that make progress toward that objective measurable.

For example, a company may set the objective of building a culture of continuous learning. The related key results might include increasing course completion rates by 10% and course enrollment rates by 15%.

Put simply, HR KPIs are used mainly to measure the current state of performance, while OKRs are designed to shape future performance.

It is also worth noting that, at present, OKRs are still not widely adopted among Italian companies.

The Benefits of Using HR KPIs

Thanks in part to the spread of AI and increasingly sophisticated management software, companies in Italy and beyond are relying more and more on data to guide decision-making.

Businesses are investing heavily in collecting, monitoring, and analyzing information that can influence decisions at every level, reducing the risks that come with guesswork and poorly informed choices.

HR leadership and people management can benefit just as much from this approach. Using KPIs to measure the effectiveness of HR processes gives companies a clearer view of how people management supports business performance.

HR KPIs help organizations measure their people processes more effectively and gain greater:

• Objectivity. When analysis is based on data rather than personal impressions, decisions become more grounded, more defensible, and easier for both leadership and employees to understand.
• Transparency. Results can be shared more easily across the organization, making HR’s contribution to business success more visible and measurable.
• Focus. Defining, tracking, and analyzing KPIs helps teams stay focused on a limited number of strategic priorities instead of dispersing effort across low-impact activities.
• Prevention. Some HR KPIs make it possible to identify potential issues early, whether related to turnover, skills gaps, or other emerging risks.
• Awareness. A clear view of results makes it easier to identify strengths, weaknesses, and opportunities for improvement.
• Collaboration. Transparent HR KPIs make it easier for HR to work closely with other business functions and build a more data-driven dialogue across the organization.

Main HR KPIs: Formulas, Examples, and Benchmark Values

The metrics HR departments can track are virtually endless. The right ones depend on a variety of factors, including the company’s industry, size, stage of growth, and strategic priorities.

Below is a list of 20 widely used HR KPIs. For each metric, we provide a description, the formula used to calculate it, a practical example, and a benchmark value that can help you interpret your results.

1. Employee Retention Rate

This metric measures the percentage of employees who remain with the company over a given period. It provides insight into overall satisfaction and engagement within the workforce.

How to calculate it. Subtract the number of new hires from the number of employees at the end of the year. Divide the result by the number of employees at the beginning of the year, then multiply by 100 to obtain a percentage.

Example. If there are 150 employees at the beginning of the year, 20 leave the company, and 10 new employees are hired, 140 employees remain at the end of the year. Retention rate = (140 – 10) ÷ 150 × 100 = 86.7%

Benchmark value. This figure varies widely by industry but generally tends to be around 90%.  

2. Resume Source

This KPI identifies how much each sourcing channel — such as Indeed, LinkedIn, recruiting agencies, or employee referrals — contributes to recruiting efforts. Understanding this distribution helps companies make more informed decisions about where to invest their recruiting budget.

How to calculate it. Divide the number of resumes received from a given source by the total number of resumes received, then multiply by 100.

Example. If the company receives 90 resumes in total, with 27 coming from LinkedIn and 36 from Indeed, the contribution of those channels is 30% and 40%, respectively.

Benchmark value. There are no universal benchmarks. In Italy, however, Indeed and LinkedIn currently perform best for many recruiting searches, particularly when supported by paid promotion. 

3. Overtime Rate

This metric measures the proportion of overtime hours compared with the total number of hours worked across the company. It can help identify excessive workloads, operational inefficiencies, or unexpected labor costs.

How to calculate it. Divide the number of overtime hours recorded by the time-tracking system by the total number of hours worked.

Example. If employees worked a total of 10,000 hours, of which 800 were overtime, the overtime rate is 8%.

Benchmark value. In most organizations, it is advisable to keep overtime below 10–15%. In reality, some industries regularly exceed this threshold. 

4. Average Labor Cost per Employee

This KPI indicates how much the company spends, on average, to employ each worker. It includes salaries, benefits, payroll taxes, and contributions. The metric is also useful for financial analysis and benchmarking across organizations.

How to calculate it. Divide total compensation costs by the total number of employees.

Example. If a company spends €5 million per year to employ 100 people, the average cost per employee is €50,000.

Benchmark value. According to a 2020 Istat report, the average labor cost per employee in Italy is €41,081.

5. Turnover Rate

This metric measures the percentage of employees who leave the company during a specific period. High turnover may indicate problems related to company culture, employee satisfaction, or workplace conditions.

How to calculate it. Divide the number of employees who left the company by the average number of employees during the same period. Multiply by 100 to obtain a percentage.

Example. If the company loses 12 employees during the year and the average workforce is 100 people, the turnover rate is 12%.

Benchmark value. A healthy turnover rate typically ranges between 10% and 15%. However, several studies suggest that the average rate across Italy and Europe now exceeds 16%. 

6. Time to Fill

This recruiting KPI measures the average time between publishing a job vacancy and selecting a candidate. Along with time to hire — which starts when candidate screening begins — it helps evaluate the efficiency of the hiring process.

How to calculate it. Add together the number of days required to complete each hire, then divide by the total number of hires.

Example. If five hires are completed in 30, 40, 35, 25, and 20 days, the average time to fill is 30 days.

Benchmark value. An older Gallup study estimated the average time to hire in Italy at 36 days. In practice, the metric varies significantly depending on the role, industry, and geographic location. Most organizations see averages between four and eight weeks.

7. Cost per Hire

This KPI measures the total cost associated with hiring a new employee. It includes expenses related to job advertising, interviews, candidate selection, and the use of recruiting tools such as an Applicant Tracking System (ATS).

How to calculate it. Divide the total cost of recruiting activities by the number of hires made during the period.

Example. If a company spends €42,000 to complete 10 hires, the cost per hire is €4,200.

Benchmark value. Typically between 10% and 25% of the candidate’s gross annual salary. Costs may increase significantly when external recruiting agencies are involved. 

8. Employee Satisfaction Index (Employee Net Promoter Score)

This survey-based metric measures employees’ overall satisfaction and their willingness to recommend the company as a place to work. Employees are asked to rate, on a scale from 0 to 10, how likely they are to recommend the company to someone else. Respondents who select 0–6 are considered detractors, those who select 7–8 are passives, and those who select 9–10 are classified as promoters.

How to calculate it. Borrowed from marketing, the metric is calculated by subtracting the percentage of detractors from the percentage of promoters.

Example. If 50% of respondents are promoters and 20% are detractors, the company’s eNPS score is +30.

Benchmark value. An eNPS above 10 is generally considered positive. Scores above 30 are typically regarded as excellent. 

9. Absenteeism Rate

This HR KPI measures the percentage of employee absences relative to total working time. It can provide useful insights into employee wellbeing, engagement, and overall workplace health.

How to calculate it. Divide the number of hours or days of absence by the total number of workable hours or days, then multiply by 100.

Example. If an employee is absent for 8 hours out of 160 hours in a month, the absenteeism rate is 5%.

Benchmark value. According to a recent Confindustria report, absenteeism in Italy averages around 6.6%.

10. Productivity per Employee

This metric measures how much value employees generate for the business and helps assess operational efficiency.

How to calculate it. Divide company revenue by the total number of employees.

Example. If a company generates €2 million in revenue with 40 employees, productivity per employee equals €50,000.

Benchmark value. This metric varies widely depending on the industry. 

11. Course Completion Rate

This metric measures the percentage of employees who successfully complete their training programs. It is commonly used to evaluate the effectiveness of a company’s learning and development initiatives.

How to calculate it. Divide the number of employees who completed their training courses by the total number of employees enrolled in those courses, then multiply by 100.

Example. If 85 employees complete training out of 100 participants, the completion rate is 85%.

Benchmark value. A completion rate between 80% and 90% is typically considered positive. 

12. Internal Promotion Rate

This KPI measures the percentage of roles filled through internal promotions rather than external hires. It reflects a company’s ability to develop and advance internal talent.

How to calculate it. Divide the number of internal promotions by the total number of promotions, then multiply by 100.

Example. If 8 out of 20 promotions involve internal candidates, the internal promotion rate is 40%.

Benchmark value. There are limited studies on this metric. A higher rate often reflects strong employee engagement and retention, as well as lower recruiting costs. However, relying too heavily on internal promotions can sometimes lead to stagnation and a lack of new perspectives. 

13. Gender Ratio

This metric measures the distribution of employees across genders and helps organizations monitor progress toward gender equality. The same approach can also be used to measure diversity by analyzing the representation of underrepresented groups.

How to calculate it. Divide the number of employees belonging to a given gender — for example, women — by the total number of employees, then multiply by 100.

Example. If 60 out of 200 employees are women, the percentage is 30%.

Benchmark value. Ideally, the workforce would be evenly split at 50% men and 50% women. Achieving this balance remains challenging in many organizations, particularly in leadership roles, but it is a goal many companies strive toward. 

14. Source of Hires

Unlike the resume source KPI, this metric tracks which recruiting channels produced the candidates who were actually hired. Rather than focusing on the volume of applications, it evaluates the effectiveness of different channels in delivering qualified candidates who match the roles being filled.

How to calculate it. Divide the number of hires coming from a specific channel by the total number of hires, then multiply by 100.

Example. If InfoJobs accounts for 5 hires out of 25 total hires in a year, the channel contributes 20% of total hires.

Benchmark value. There is no universal benchmark. The most useful approach is to compare the source of candidates with the source of hires to gain a clearer view of the effectiveness of recruiting channels. 

15. Six-Month Attrition Rate

This KPI measures the percentage of employees who leave the company within their first six months. It helps assess the effectiveness of onboarding as well as the alignment between new hires and the company’s culture.

How to calculate it. Divide the number of employees who leave within six months of being hired by the total number of hires during the same period, then multiply by 100.

Example. If 5 out of 40 new hires leave within the first six months, the attrition rate is 12.5%.

Benchmark value. Companies should generally aim to keep this rate below 10%. 

16. Average Performance Rating

This metric measures the overall performance of the workforce relative to the objectives assigned to employees. It is useful for evaluating the effectiveness of performance management processes and identifying areas for improvement.

How to calculate it. Add together the performance scores received by employees during performance reviews and divide the result by the number of employees evaluated.

Example. If the performance scale runs from 1 to 5 and the sum of the scores for 100 employees is 430, the average rating is 4.3.

Benchmark value. On a scale from 1 to 5, organizations typically aim for an average score above 3.5. 

17. Employee Engagement Rate

This HR analytics KPI measures the level of employee engagement. It can be calculated either through employee surveys or by measuring participation in company events and engagement initiatives such as training sessions or team-building activities. In both cases, it reflects how actively employees contribute to the organization’s success.

How to calculate it. Divide the number of employees participating in engagement initiatives by the total number of employees, then multiply by 100.

Example. If 120 out of 200 employees take part in engagement programs, the engagement rate is 60%.

Benchmark value. Engagement below 50% generally indicates low participation, while results above 80% are typically considered excellent. 

18. Average Employee Tenure

This metric calculates the average length of time employees remain with the company. It provides insight into workforce stability and the effectiveness of retention strategies.

How to calculate it. Add together the total years of service of all employees and divide the result by the number of employees.

Example. If 100 employees have accumulated a total of 520 years of service, the average tenure is 5.2 years.

Benchmark value. According to Sole24Ore, the average employment relationship in Italy lasts around 12 years, higher than the European average of roughly 8 years. The figure is likely to decrease as younger generations enter the workforce. 

19. Job Offer Acceptance Rate

This recruiting KPI measures the percentage of job offers accepted by candidates. A high acceptance rate suggests that the company is offering competitive roles, while a lower rate may indicate issues with compensation, employer reputation, or lengthy recruiting timelines.

How to calculate it. Divide the number of accepted job offers by the total number of offers extended, then multiply by 100.

Example. If a company extends 40 job offers in a year and 36 candidates accept them, the acceptance rate is 90%.

Benchmark value. An acceptance rate above 80% usually indicates that the company’s offers are competitive and attractive to candidates. A lower rate, on the other hand, may signal competitiveness issues that need to be addressed. 

20. Goal Achievement Rate

This KPI measures how close the organization is to achieving its overall objectives. It provides a useful snapshot of performance across teams and departments.

How to calculate it. Divide the number of goals achieved by the total number of goals assigned, then multiply by 100.

Example. If 150 out of 200 assigned goals are completed, the goal achievement rate is 75%.

Benchmark value. In this case, even very high results — such as a 95% goal achievement rate — are not necessarily a positive sign, as they may indicate that the objectives set were not ambitious enough.

How and Where to Track HR KPIs

Choosing the HR KPIs that best fit your organization also means considering which data and metrics you are actually able to track, and which tools you have available to do it.

In most cases, this data is collected through HR management platforms. These systems store information about candidates and employees and support many of the interactions between the organization and its workforce.

From this perspective, companies that rely on a single HRM suite to manage all HR processes have a clear advantage: all the data is stored in the same database, making it more consistent, less ambiguous, and generally of higher quality.

HRM software also includes built-in reporting tools that transform data into charts and tables, providing the insights HR professionals need to monitor performance and support decision-making.

Organizations looking for more advanced HR analytics capabilities can also use business intelligence software. These tools enable deeper analysis of HR KPIs by pulling data from the company’s HRM platform — as well as from other internal systems or external sources — and processing it accordingly.

With the support of AI, companies can also run predictive analyses that help them act on certain trends before they occur, for example by anticipating potential employee resignations.