Human Resource Performance Indicators

Analysing human resource performance involves measuring key indicators that reveal how effectively a business is managing its workforce. These quantitative measures allow businesses to benchmark, set targets, identify problems and evaluate the impact of HR strategies.

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Labour Turnover

Labour turnover measures the rate at which employees leave a business over a given period, usually one year.

Formula

Labour Turnover (%) = (Number of employees leaving during the year / Average number of employees during the year) x 100

Worked Example

A business has an average of 400 employees during the year. During that year, 60 employees leave.

Labour Turnover = (60 / 400) x 100 = 15%

Interpreting Labour Turnover

Level	Interpretation	Implications
Low turnover (e.g., < 5%)	Employees are staying — may indicate high satisfaction	Stability but risk of stagnation; fewer new ideas
Moderate turnover (e.g., 10-15%)	Healthy churn — some natural movement	Balance between stability and fresh perspectives
High turnover (e.g., > 20%)	Employees are leaving frequently — potential problems	High recruitment and training costs; loss of experience