HR Metrics and Formulas
8+
Key Formulas
Turnover cost-per-hire time-to-fill yield ratio and more
100%
Formula Weight
These have objectively correct answers
Core HR Formulas
Turnover Rate
(Separations / Avg Headcount) x 100
Includes ALL separations. Voluntary, involuntary, retirements. Measured monthly or annually. The denominator is the average number of employees during the period.
Cost Per Hire
(Internal Costs + External Costs) / Total Hires
Internal costs include recruiter salaries and referral bonuses. External costs include job board fees, agency fees, and background checks. Divide by total hires in the period.
Time to Fill
Date of Offer Acceptance - Date of Requisition Approval
Measured in calendar days. Starts when the hiring manager's requisition is approved, ends when the candidate accepts. Does NOT start at job posting.
Yield Ratio
(Candidates at Next Stage / Candidates at Current Stage) x 100
Calculated at each stage of the recruitment funnel. 200 applicants, 50 pass screening = 25% yield. Helps identify where candidates drop off.
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Compa-Ratio
(Employee Salary / Range Midpoint) x 100
Measures how an individual's pay compares to the midpoint of their pay range. 100% = at midpoint. Below 80% signals a retention risk.
Revenue Per Employee
Total Revenue / Total Full-Time Equivalents
A productivity metric. Higher revenue per FTE suggests a more efficient workforce. Useful for benchmarking against industry peers.
Human Capital ROI
(Revenue - (Operating Expense - Total Labor Cost)) / Total Labor Cost
Measures the return on every dollar invested in people. A ratio above 1.0 means labor investment generates positive returns.
Absence Rate
(Absence Days / (Avg Employees x Workdays)) x 100
Tracks the percentage of scheduled workdays lost to unplanned absences. Helps identify patterns and the cost of unscheduled leave.
Return on Training Investment
((Monetary Benefits - Training Costs) / Training Costs) x 100
Expresses training ROI as a percentage. If a program costs $10,000 and generates $25,000 in productivity gains, the ROI is 150%. The exam may present this with real numbers and ask you to calculate.
| Metric | Numerator | Denominator |
|---|---|---|
| Turnover Rate | Separations | Avg Headcount |
| Cost Per Hire | Internal + External Costs | Total Hires |
| Yield Ratio | Candidates at Next Stage | Candidates at Current Stage |
| Compa-Ratio | Employee Salary | Range Midpoint |
| Revenue/Employee | Total Revenue | Total FTEs |
| Absence Rate | Absence Days | Employees x Workdays |
Exam Traps
Turnover Uses SEPARATIONS
The numerator is total separations (voluntary + involuntary). Not just resignations. Not just firings. All departures count.
Cost Per Hire Divides by HIRES
The denominator is the number of hires, not the number of applicants or requisitions. Internal costs + external costs, divided by total hires in the period.
Time to Fill Starts at APPROVAL
Time to fill begins when the requisition is approved, not when the job is posted. Time to start (a related metric) begins at the same point but ends on the new hire start date.
Yield Ratio at EACH Stage
Yield ratios measure the percentage of candidates who advance from one recruitment stage to the next. Calculate separately for each transition, not as one overall ratio.
All Separations
Turnover = ALL separations. Not just firings.
Free Points
Free points if you memorize them. One right answer.
Your workforce is a bucket of water. People leaving are leaks. Turnover rate measures how much water you lose relative to how much the bucket holds. Every drop that leaves counts, whether it jumped or was poured out.
Every time you refill the bucket, it costs money. Job ads, recruiter fees, interview time, onboarding. Add it all up, then divide by how many new drops you added. That is your cost per hire.
How long does the bucket stay low? Time to fill starts the moment you realize you need more water (requisition approved) and ends when the new water arrives (offer accepted). Every day the bucket is low costs productivity.
Before water gets into the bucket, it passes through a funnel with multiple filters. Each filter (resume screen, phone screen, interview, offer) has a yield ratio. A 50% yield at stage 2 means half the candidates who passed stage 1 also pass stage 2.
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