Most conversations about HR metrics start with a long list of things you could measure. This one starts differently.

If you are running a small business, you probably do not have a dedicated HR analyst, a sophisticated HRIS, or hours to spend pulling reports. What you need is a short list of metrics that actually tell you something useful, and that you can realistically track with the tools you already have. That does assume the numbers underneath them are reasonably trustworthy in the first place, which is worth a quick gut check before you start tracking anything new.

Here are the five I would start with.

1. Employee turnover rate

This tells you what percentage of your workforce left during a given period. It is usually calculated as:

(Number of leavers ÷ average headcount) × 100

Why it matters: turnover is expensive. Recruitment costs, lost productivity, the time it takes for someone new to get up to speed. It all adds up. A turnover rate that feels normal may not be once you look at what it is costing you.

Track it monthly. Look at patterns over time. Ask whether leavers are concentrated in particular teams, roles or managers.

2. Absence rate

This tells you what percentage of working time is being lost to sickness absence.

(Total days absent ÷ total working days available) × 100

Why it matters: a rising absence rate can be an early signal of stress, disengagement or management issues, long before a more serious problem becomes visible. It also has a direct operational cost.

You do not need a sophisticated system to track this. A simple spreadsheet works perfectly well for most small businesses.

3. Time to hire

This measures how long it takes to fill a vacancy, from the point a role is approved to the point an offer is accepted.

Why it matters: a consistently long time to hire tells you that something in your recruitment process is creating friction. It might be the job advert, the screening process, the interview stages, or the speed of decision-making. You cannot fix what you cannot see.

Even if you only recruit a handful of times a year, tracking this across each vacancy will quickly build a useful picture.

4. Headcount cost as a percentage of revenue

This is not a pure HR metric. It sits at the intersection of HR and finance. But for a small business, it is one of the most useful numbers you can track.

(Total payroll cost ÷ total revenue) × 100

Why it matters: it gives you a sense of whether your people costs are proportionate to the business they are supporting. A rising percentage over time is worth examining. It might reflect growth, which is a good sign, or creeping cost, which is worth attention.

5. Vacancy rate

This tells you what proportion of your roles are currently unfilled.

(Number of open vacancies ÷ total headcount) × 100

Why it matters: a high or persistent vacancy rate puts pressure on the rest of your team, risks quality and service delivery, and can accelerate turnover if people feel they are constantly covering for missing colleagues. Tracking it gives you an objective view of your resourcing position.

A word on benchmarks

You will find plenty of published benchmarks for all of these metrics, and it is tempting to reach for them straight away. Before you do, it is worth asking a more basic question: are you even calculating the same thing as whoever produced the benchmark?

There is more than one legitimate way to work out each of these five numbers. Do you count voluntary and involuntary leavers together or separately when you calculate turnover? Does your absence rate include long-term sickness or strip it out? Is headcount cost based on gross payroll, or total employment cost including pension and National Insurance? None of these choices is wrong. But if you do not know which one you are making, benchmarking becomes close to meaningless, because you may be comparing your answer to a different question entirely.

This is where a framework like ISO 30414 earns its keep, not as a certification to chase, but as a ready-made set of definitions. It will not tell you which of these metrics matters most for a business your size, but it takes the guesswork out of how each one should be calculated, so you are not reinventing the formula from scratch or discovering three different versions of it living in three different spreadsheets.

The bigger point holds regardless of which definitions you use: know your own formula, write it down, and use it consistently. Knowing that your turnover rate is above the sector average is less useful than knowing it has been rising for three months and is concentrated in one department, and it is worse than useless if your “turnover rate” and the sector’s turnover rate are not measuring the same thing. One number rarely tells the whole story on its own, whichever of these five you are looking at.

Start by tracking consistently, with a formula you can explain. The patterns will tell you where to look, and the definition will tell you whether the comparison is fair.

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