People Strategy

5 HR Metrics That Matter Most to CEOs

April 2, 2020
November 7, 2023
Andy Przystanski
Lattice Team

HR teams have never had access to more robust reporting across their tech stack. They’re reporting on metrics like top performer retention rate and comp ratio — and standbys like turnover and time to fill. Today’s practitioners double as full-blown people scientists.

But when it comes to presenting that data to the C-suite, it pays to know your audience. We asked CEOs to share which data points they valued the most.

1. Turnover Rate

It’s the profession’s “old faithful” of metrics. Turnover rate, or terminations divided by headcount and multiplied by 100, gives HR teams a bird's-eye view of who’s staying and leaving. And even today, CEOs still rank it as one of the data points they cared most about.

“Turnover is a huge indicator of how well your company is recruiting, retaining, and improving staff. There is a lot of competition in business these days, and companies have to sell themselves just as much as candidates do,” said Ethan Taub, CEO of Goalry. Turnover might also be one of the most public-facing metrics, as departing employees won’t hesitate to spill the beans on Glassdoor and Blind.

While leaders were interested in company-wide turnover, they said they always wanted to know the context behind the metric. Mikaela Kiner, CEO of Reverb, spent over 15 years working in HR, so she’s sat on both sides of the boardroom table. She’s spent time looking at turnover by department, demographic, and performance rating, understanding that a seemingly high turnover rate doesn’t tell the whole story.

“I worked with one team that had a significant amount of attrition, but when they analyzed it further the results were interesting. First, they broke out external versus internal attrition. That is, people leaving the company vs. those departing for other teams. Most of the attrition was internal,” she said.

Taub agreed with the importance of context. “It's not to point the finger, but just to ensure that the recruiting team and team managers get the support when they need it,” he said.

2. Engagement Scores and eNPS

While both pulse and engagement surveys capture employee sentiment in a moment of time, they’re also valuable for forecasting. Engagement consistently ranks as the most reliable predictor of turnover. Given that the cost of losing an employee can cost twice their salary, it's no surprise CEOs found value in the metric.

“Ultimately, we focus on the bottom line. That’s why I take a keen interest in employee engagement and job satisfaction. I definitely want to retain good staff with strong skill sets, because I don’t want to spend more money on recruitment,” said Alex Williams, CEO of Hosting Data.

According to Kiner, the notion that CEOs are indifferent toward engagement is a tired one. They want more engagement data, not less. “One risk is looking at too many lagging metrics. That is, focusing only on things that have happened already. More progressive HR leaders also examine leading indicators. What can signal potential attrition before it happens? That may be a lack of engagement,” she said.

3. Leading Termination Reason

CEOs clearly want to know who’s leaving. But just as importantly, they want to know why. Beyond whether terminations were employee or company-initiated, founders and CEOs wanted detail. If a departure was involuntary, for example, was it a bad hiring decision or rocky onboarding process that was to blame? If the decision was made by the employee, what reasons did they cite before leaving?

“Exit interviews are a fantastic way of seeing how you can improve as a leader and as a business. Leaving employees are more likely to be brutally honest than your current employees as they have nothing to lose,” Taub said. CEOs take pride in their companies. When employees leave them on their own accord, the rejection can sting.

“The feedback given, good and bad, can allow you to assess if and what needs changing for the better,” he said. Compliance reasons aside, it’s critical that teams document departures — going beyond “vol and invol” in their HR system of record. Employees leave to pursue new opportunities, care for family, serve in the military, and dozens of other reasons. Build a robust list of reasons in your HRIS to make reporting easy ahead of your next boardroom meeting.

4. Diversity (Representation and Equity)

The debate over whether diversity drives business results isn’t just over, it ended years ago. Academic journals have found no shortage of evidence that diverse teams are more engaged, innovative, and productive. CEOs have taken note for all of the above reasons — and a handful of others, one being employer brand.

“A lot of people want to work at places that are inclusive and diverse. If you aren't offering that, it's going to be harder for you to pull in talent,” said Kellie Wagner, CEO of Collective. It’s plainly obvious to candidates (and the press) when companies haven’t made the investment. “People care now if your leadership team is all white men. People will call you out on that,” she said.

CEOs also wanted more than just department demographics or gender ratios. They were asking for a holistic view across the entire employee lifecycle.

“Diversity information on all fronts warrants your attention. That means your diversity of candidates, interviews, hires, promotions and pay increases. Lagging in any one of these areas will negatively impact not only your company's diversity but your ability to attract and retain diverse hires over time,” Kiner said. She had choice words for chief executives who didn’t prioritize diversity.

“If any part of your diversity funnel has a leak, you will suffer,” she said. 

5. Time to Fill

It’s one of the most important data points for hyper-growth startups: time to fill. This recruiting metric represents the average amount of time it takes to fill a role, from job requisition to an accepted offer letter. For most of the CEOs we surveyed, it remains recruiting’s ultimate barometer of success.

“We track quite a few metrics in regards to our hiring, but the one that is most important is time to fill. This metric tells us how good our overall hiring efforts are, how good our offer is, and how well we’re managing our entire hiring process,” said Adam Hempenstall, CEO of Better Proposals. “The lower it is, the less money we waste and the stronger our team is,” he said.

Though popular, time to fill remains contentious. Recruiters are divided on its value, and not all CEOs were complementary. Kristine Pachuta, CEO of AlltimePower, called it the “most overvalued” metric. “I would much rather take time to find the right candidate, have that person meet the team, and get to a place where we all feel comfortable moving forward, versus a race to fill seats,” she said. The truth might be somewhere in the middle.

Want to take your metrics even further? Lattice makes it easy to bring engagement and performance data together on one customizable dashboard. Our open API also empowers you to export this information and bring it into your data visualization tool of choice.

Over 1,500 of the world’s most exciting workplaces use Lattice to drive performance and engagement. Schedule a demo to see our industry-leading software in action.