EP 129: The HR Metrics Every Small Business Should Track | HR Systems Series

Don't Waste the ChaosPodcastHR Systems SeriesHR StrategyHR for Small Business
Written By Kerri Roberts

Listen on Apple, Spotify, or Buzzsprout (links below).

Apple: https://podcasts.apple.com/us/podcast/dont-waste-the-chaos/id1723388520

Spotify: https://open.spotify.com/show/0nmxuIYEmqpbqZxzoxgiMY

Buzzsprout: https://www.buzzsprout.com/2471085

Episode Summary

How many people left your business in the last year — and when did they leave? Day 0–30? Day 31–90? After six months? Same manager, or several? Same department, or spread out?

If you can’t answer that, you’re making people decisions on feelings instead of data. And feelings aren’t a strategy. In this episode, Kerri walks through the essential HR metrics every business — small, medium, or large — should track, how to build a simple measurement system with nothing more than a spreadsheet, and most importantly, what the numbers are telling you to actually do.

This is the strategic HR portion of the 13-part HR Systems Series. The data tells a story whether you like it or not — and once you see it, you stop guessing and start acting. Your people are how the business gets done, so HR metrics are business metrics. Track them.

In This Episode

  • Why “we don’t have much turnover” is a feeling, not data — and what your numbers actually reveal

  • The five categories of HR metrics every business should track: retention, hiring, engagement/absenteeism, performance, and compensation

  • Time-to-turnover: how the timing of a departure tells you whether it’s a hiring, onboarding, or manager problem

  • The hiring metrics that matter most — time to fill, quality of hire, and source of hire (and why Kerri doesn’t believe in probationary periods)

  • How Kerri runs engagement surveys through a third party — and the steps she takes to protect anonymity and get honest data

  • Why a 4–5 average on a 5-point review scale means your managers are rating too generously

  • The 3-tab spreadsheet that gets you tracking with zero software

  • What turnover actually costs: roughly $60K–$100K to replace four $50K employees

Chapter Timestamps

0:00 Retention data tells a story
2:28 Where HR metrics fit in the HR Systems series
3:00 Feelings aren’t strategy: why metrics matter
4:50 What your metrics are actually telling you
5:30 Turnover rate: the first number to track
6:56 Time-to-turnover, voluntary vs. involuntary, retention by manager
8:00 Hiring metrics: time to fill
9:20 Quality of hire and the 90-day review
10:30 Source of hire
10:45 Engagement and absenteeism
13:00 Running an engagement survey (and why third-party)
16:45 Performance metrics
18:37 Rating distribution
19:00 Compensation metrics: pay equity and compa-ratio
20:49 Building a simple metrics system
22:00 The three metrics to start with this month
23:10 When to move to HR software
24:50 Using the data to make decisions
28:00 HR metrics are business metrics
29:00 Your action item and how to work together

Resources Mentioned

Episodes in the HR Systems Series

This episode is part of the 13-part HR Systems Series — the systems every small business needs, built in order from foundations to operating system to strategic HR.

  • HR Foundations: hiring, onboarding, HR law & compliance

  • HR Operating System: compensation, leave management, performance management, disciplinary actions, documentation

  • Strategic HR: benefits, terminations & offboarding, HR metrics (you’re here), workforce planning, HR tech systems

  • Next up: workforce planning (coming next week)

Your Action Item

Open a spreadsheet right after this episode and log every person who left your business in the last 12 months: hire date, exit date, reason, and who their manager was. That’s your first HR metric, done. Then add two more — time to fill (job posted to accepted offer) and absenteeism by employee. Three numbers, one spreadsheet, and you’ll see something you didn’t know.

GET THE MONDAY EMAIL

If this episode resonated, you’ll like the Monday morning email. Every Monday at 5:28am, Kerri sends one practical idea for leaders who want to do this work better — including the conversations behind episodes like this one. 1,000+ leaders, 50%+ open rate. Sign up: https://saltandlight.myflodesk.com/saltandlightadvisors

Full Transcript

Retention data tells a story

So, how many people left your business in the last year? And when did they leave? Was it day zero to 30 of their employment? Was it 30 to 90? Was it after six months? Do you know? Did they all leave the same manager? Was it multiple managers, same department, different departments? This data tells a story. Whether it’s a story you’re excited to learn about or not, it’s a page turner.

To me, if you’re not capturing it, you are making people decisions without having real data to back it up. So that’s what we’re getting into today. When most small business owners tell me, “We don’t have a lot of turnover,” and then I ask them about their retention data, they can’t tell me why someone left, or it’s all anecdotal — “Well, this person left because of this and this. We don’t have a lot. It’s just a couple.” That’s feelings, and data tells you what the actual problems are. If there are problems. I’m not saying you have problems — maybe you don’t.

So today we’re going over the essential HR metrics that all businesses — small, medium, or large — should track, how to build a simple measurement system, and what the numbers are telling you right now. I’ll give you a few examples of numbers that I see and what to do when you see certain indicators. And that’s my favorite part, because what we want to do is take action.

Welcome back to another episode of Don’t Waste the Chaos. I’m your host, Kerri Roberts. I’ve been doing this HR and people operations thing for over 20 years.

Where HR metrics fit in the HR Systems series

You’re catching me in a series right now where I’m walking through the building blocks of human resources. We’ve gone through HR Foundations — employer responsibility, hiring, onboarding, HR law and compliance. That’s what I wrote my first book about. I’ve got three books written; the first is published (last year), the second is in editing and should be out later this year, and that one is about the HR operating system. The foundation has to be laid, and the operating system is where we spend most of our time: compensation and classification, disciplinary actions, documentation, performance management, leave management — that’s a big one.

You’re catching me in the strategic HR portion, where we talk about terminations and offboarding, benefits, workforce planning, development, and of course HR metrics. We’ll get into tech and systems too.

If you want the foundational piece, pick up a copy of the book on Amazon or my website, or grab the coursework. HR Foundations has the first four modules and 12 downloadable tools, resources, and templates; the second is the HR Operating System. Both are at saltandlightadvisors.com/resources. I’m recording this in June, and in August the strategic HR modules will be out too.

Feelings aren’t strategy: why metrics matter

We want to talk about why metrics matter for businesses of all sizes, but specifically small to mid-sized businesses. Most owners tell me they don’t have an HR metric problem — no one says, “You know what, I really struggle with HR metrics.” Most people are like, “Those don’t matter to me, don’t have time for that, no one’s tracking that, don’t even know why it’d be important.”

But if you’re saying things like, “Things feel fine, morale seems okay, I think people are happy” — feelings are not strategies. I’m a strategy girly, so I like to base it on the numbers. When I walk you through this, you’re going to be like, “Ooh, I want those numbers too.”

What your metrics are actually telling you

Let’s talk about what metrics are actually telling you. Whether your hiring process is working. Whether your onboarding is landing — are people leaving in the first 90 days? Whether a specific manager or department has a retention problem you haven’t realized yet. Whether your culture is as healthy as you think, or isn’t. That and a million other things.

Here’s a common story I hear: “We don’t have a lot of turnover, maybe only like two people a year.” Well, in three years, that’s six people. When do they leave? Is it a hiring issue? An onboarding issue? A manager issue? The data tells you exactly where to address the problem, if there is one. Without the data, you’re guessing. A good piece of data makes me feel propelled to act, because I know exactly what to do. Metrics don’t require expensive software — a simple spreadsheet is a great place to start.

Turnover rate: the first number to track

Let’s take a look at your turnover rate: the number of people who left divided by the average headcount of your organization, times 100. The number of people who left in the last year — if I’m recording in 2026, look at 2025 data, or a rolling calendar year, mid-25 to mid-26. The number who left divided by your average headcount, times 100. Track it monthly and annually.

Time-to-turnover, voluntary vs. involuntary, retention by manager

That’s our retention and turnover starting point, but I’ve got three more. Time-to-turnover — this one’s huge, because it tells me exactly where to make an impact. When are people leaving? Zero to 30 days? That’s likely a hiring problem (could be onboarding). 31 to 90 days? That’s an onboarding problem — anything before 90 days, deal with onboarding. 90 days or more? Now we’re dealing with a manager problem, a cultural problem, or both.

Voluntary versus involuntary turnover — very different stories. Are people leaving, or are we pushing them out? Sometimes we’re glad — “I knew about that one, it needed to happen.” No judgment there. But if they’re voluntarily leaving, I want to know why. And retention by manager — this one gets a little personal. If one manager has three times the turnover of anyone else, there’s your finding. We’re either going to coach them up or coach them out, but we need to stop hemorrhaging employees in their department.

Hiring metrics: time to fill

Let’s talk hiring metrics. Time to fill: from the time you posted an open requisition to the time you have an accepted offer. Industry best practice is around 30 days. If it’s taking longer, you’ve got a bottleneck — and you probably already know it (“It takes us forever to set up interviews”). Maybe it’s intentional, but I’d recommend fixing it, because by the time you’re ready to make an offer, good people have other offers. They might accept yours, but they’re not loyal to you yet — they just started — and they’ll leave if a better offer comes in. I just had this happen with a client: a new hire under 90 days got another offer and took it, after the leader had invested heavily in onboarding. How long was the hiring process? Time to fill matters more than you’d think.

Quality of hire and the 90-day review

Quality of hire. How would we even measure that? I like a good 90-day review. By 90 days, are they up and running? If not, look at the quality of hire — which could point to your job description, posting, or interview process — or at your onboarding, because you didn’t get them up to speed. So quality of hire can speak to a lot of things. Track it with 90-day reviews.

I am not talking about probationary periods. I’ll be honest, I do not like a probationary period. Most of you have one in your handbook, but it means nothing — there’s no real review, nothing formal, and it gives you no real legal protection (it’s still potentially an unemployment claim, wrongful termination, or discrimination). So probationary periods aren’t a thing to me. A real 90-day review is.

Source of hire

Source of hire is another one. Where are you posting jobs, and where are the good people coming from? Stop posting in the places that don’t work and go all in on what does. Is it referrals? LinkedIn? Indeed? Industry websites? Associations? Look at where your best hires came from and double down — maybe even buy ads there.

Engagement and absenteeism

Now let’s talk engagement and absenteeism. A lot of people want to focus on engagement but measure nothing other than maybe a yearly satisfaction survey — which is good, by the way — but there’s other data to look at. Absenteeism rate: the number of days a person was absent divided by their total scheduled days. A spike in absenteeism is a potential morale concern, and it impacts engagement. Why is that person suddenly not feeling loyal to be at work? Maybe it’s legitimate — maybe it’s FMLA-related. Do you know? You don’t if you’re not tracking it. If you have an HR/payroll system, it can do this for you — tap into the reports. And if someone’s burning through all their vacation time and your policy doesn’t pay it out at termination — ding ding ding — you may have someone getting ready to quit. This data tells a story.

Running an engagement survey (and why third-party)

If you’re not doing a big engagement and satisfaction survey, I recommend one once a year — and not just as a plug for me — I recommend a third party run it. Why? Because people won’t be as candid if it’s executed internally. Even with an HR pro running it internally, it signals, “Can they track my IP address? This is a company-issued computer.” So even if you don’t ask names, people wonder.

Let me walk you through my process. I create the survey questions based on your industry and a number of variables, including what you’re struggling with and where you want to hone in — maybe benefits data this time. I want the survey done in six to seven minutes, tops; any longer and people won’t complete it. I add some identifiers (say a client has 41 locations — I might segment by location, or by industry segment if some locations are small), but I’m very sensitive with small business units, because if we segment too deeply, people feel identifiable and won’t give honest feedback. I send you the draft; you approve it; I walk you through my thinking. I plug it into a simple survey tool I pay for (no charge to you), and I draft a message — usually from the CEO — that goes out with the link. I love it coming from the business owner for the highest response rate, since I’m a stranger. Then reminders go out: “Three days left,” “Complete it by end of day, we love your feedback.”

When the data comes in, I slice and dice and I whitewash it. You get back themes and trends, not verbatim feedback — I keep it general so no one’s identifiable, because the moment people feel identifiable, you lose trust and they stop giving feedback. When I say a trend, I usually mean three or more people said something, and I look at overall response percentages.

Acting on survey data

It’s so powerful. We meet as a management team, I tell you what I learned, I advise on next steps, and together we draft employee communication: “We heard you. Thank you. Here were the key takeaways.” Maybe a town hall, maybe a focus group. Then we report out with regularity: here’s what we’re doing to address these issues and why.

You can also do an easier version — a quarterly pulse survey: Do you feel valued? Do you have what you need? Would you recommend working here? You don’t need formal software; Google Forms, SurveyMonkey, or your HR/payroll system works. Track it. You’ll be amazed at what comes out.

Performance metrics

Fourth category: performance metrics. I want to know the percentage of employees with documented performance goals. If you’ve never done that, it’s zero — and that’s your sign to start. I also want to know the percentage who’ve received a performance review in the last 12 months. This is data you should be able to pull from your HR/payroll software. If the answer is “We haven’t done that systematically,” let’s get together and run some reviews — and at the end of each, there’s a place for the employee and the manager to set goals. Those goals feed into (and from) the job description; if there aren’t objectives in the job description, we fix those too, because clarity is king.

Rating distribution

If you are systematically doing reviews, I want to know your rating distribution — the average rating across the organization, by question or overall. If you’ve got a five-point Likert scale and your average is a four or five, you’re being way too generous. Everyone is not exceeding expectations and outstanding. Most people are just meeting expectations — and that’s a fabulous, successful place to be. That’s usually a three, not a four or five. You need to know your distribution to see whether your managers are rating accurately.

Compensation metrics: pay equity and compa-ratio

Fifth category: compensation metrics — the nitty-gritty. I love doing compensation data studies (yes, I know how nerdy that sounds, and I mean it from the bottom of my heart). I want to know your pay equity ratio for individuals with the same job title — are they paid consistently regardless of gender, race, tenure? Do you have a pay philosophy? I also want to know your compa-ratio: where each employee falls relative to the midpoint of their range. That means you’ve done some benchmarking (or worked with someone like me). These connect directly back to the Compensation & Classification episode earlier in this series — go back and listen if you want to go deeper. Powerful data.

Building a simple metrics system

Let’s talk about building a simple HR metrics system. It doesn’t need to be complex. I just gave you five categories with three to four things to measure in each — just start somewhere. You don’t need HR software to start; it’s easier with one because the data’s built in (and if you don’t have a system, I can help you vet them — there are a million out there, and you want to make sure you’ll actually implement and use it). But you just need consistency in a spreadsheet.

The three metrics to start with this month

Start with these three metrics this month. Turnover rate: how many people left in the last 12 months, and when in their tenure did they leave? Time to fill: from posting to accepted offer — that helps with hiring and onboarding. And absenteeism: are there patterns you haven’t noticed? This data is powerful.

Keep the setup simple. One tab is a headcount log with hire date, termination date, reason for termination, and manager. Second tab is an open-requisition log with open/posting date, fill date, and source of hire — just ask people, “How did you find us?” Third tab is an absence log by employee, monthly. That’s it: three tabs. Review it quarterly — put a 30-minute meeting on the calendar, maybe with other managers — and it’s going to show you something you didn’t know. I promise.

When to move to HR software

Here’s when you know it’s time to move to HR software (or turn on your reporting module): when you’re around 15 to 20 employees and manual tracking is taking more time than it’s worth. And when you have multiple managers, so you can track performance by team. Who’s costing you, and who’s performing — the facts are the facts.

For tools, I have partnerships with a few — Rippling, Gusto, UKG (and a distributor I work with), plus looser relationships with isolved and others. I’ll do a whole episode on HR/payroll software. But only buy one if you’re actually going to implement it and have people use it. If you don’t have someone dedicated to implementing it well — or a partner like me to make sure it gets implemented well — you won’t get what you’re paying for. So don’t waste the money.

Using the data to make decisions

Let’s wrap with how to use the data to make decisions, because data without action is just a spreadsheet, and nobody needs another spreadsheet. You can use AI for this, and many HR/payroll systems use AI to surface insights — use that if you have it.

If we see a turnover spike in the first 30 days, we audit our hiring and/or onboarding. If we see absenteeism climbing in one department, that’s almost always a morale signal, not a coincidence. If one manager has three times the turnover of any other, that’s a leadership conversation, not an HR policy issue. If your compa-ratios show that, say, women on average are compensated lower — which is what national and international data say — is it happening in your organization? That’s a pay equity audit, and you want to pay attention to it.

HR metrics are business metrics

So we take all this data, we make someone responsible for it, and we share it with leadership. HR metrics are business metrics. So many people say, “I don’t have an HR person, so we don’t track this.” I don’t care — your finance person should track it then. These humans are how you get the business done. On your P&L, compensation and benefits are the largest line-item spend, so why on earth would you not track these metrics? If you turned over four people in the last year at a $50,000 average, that’s roughly $60,000 to $100,000 in replacement cost alone that you just ate. You don’t want to do that, especially as a small business owner. So let’s dig in and figure out what to fix instead of getting frustrated with the process.

Your action item and how to work together

Open a spreadsheet right after this episode and log every person who left in the last 12 months — hire date, exit date, manager. Boom, first HR metric. If you want to go deeper, I’ve got the HR Foundations coursework, the HR Operating System coursework, and the strategic HR coursework launching around August 2026, all at saltandlightadvisors.com/resources. Want a starting point? Take the free mini HR audit at saltandlightadvisors.com/hraudit — it asks questions across the 13 foundational areas of HR and spits out a score (need attention, at risk, or smooth sailing). It’s automated; I’m not going to call or stalk you.

Next episode is on workforce planning — you won’t want to miss it. Please subscribe on YouTube, Spotify, Apple, or wherever you listen, and leave a rating or review; I love the feedback. I’ve been putting out an episode every week since January of 2024. Share this with other small to mid-sized business owners in the thick of it. And if you’d rather just call in a pro, that’s me — saltandlightadvisors.com/contact. This work can feel like chaos; we don’t innately know what to measure. Hopefully this gave you a good first step. Friends, don’t waste the chaos — embrace it. I’ll see you next week.

Resources To Keep Building

🎯 Take the free HR Audit — Score your HR systems in 5 minutes and see exactly where your gaps are. https://saltandlightadvisors.com/hraudit
🎙️ Listen to Don’t Waste the Chaos — This episode goes live in ~2 weeks (per-episode link added then). Show feed: https://www.buzzsprout.com/2471085
📚 Explore the HR coursework — Self-paced courses, tools, and resources to build your HR systems step by step. https://saltandlightadvisors.com/resources
✉️ Get the Monday Email — One practical idea for leaders, every Monday at 5:28am. 1,000+ leaders, 50%+ open rate. https://saltandlight.myflodesk.com/saltandlightadvisors
Need fractional HR support or want to talk through a specific challenge? https://saltandlightadvisors.com/contact

Kerri Roberts https://saltandlightadvisors.com
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