Do you know exactly where your business is losing money when it comes to hiring?
Or why good employees keep leaving, even when you think you’re doing everything right?
Most small business owners don’t track the numbers that reveal these answers. Instead, they rely on gut instinct, rush to hire when they’re desperate, and chalk turnover up to “that's just the way things are.”
Unfortunately, people problems are profit problems, and the data is trying to tell you something.
At Whirks, we help small businesses take the guesswork out of hiring and retention.
In this article, you’ll learn the five HR metrics that show where your business is losing people and profit, how to calculate each one, and how to use those numbers to make smarter decisions moving forward.
The Real Reason Small Businesses Avoid HR Data and the Price They Pay
A lot of small businesses avoid HR metrics because they sound too technical or time-consuming. But that mindset is likely costing you more than you realize.
Sure, you didn't start your business to become an HR data analyst. You started it to run a great restaurant, practice, or construction crew.
But as you grow, people problems become profit problems. High turnover bleeds cash. Bad hires waste time. Slow hiring costs you in overtime and burned-out employees.
But there is one thing that can make a difference: Data.
Here are the five HR metrics we recommend every small business start tracking, starting with the one that costs you the most when it’s out of control: turnover.
Metric #1: Turnover Rate – How Often Employees Leave Your Business and Why
If you’re losing people faster than you can replace them, it’s draining time, money, and team morale. Turnover rate is the metric that shows you just how bad the leak really is, and where to look for the cause.
How to Calculate Turnover Rate
Turnover rate tells you how many employees leave your business over a specific time period.
Formula: (Number of separations in a period / Average number of employees in that period) × 100
Example: You started the year with 50 employees and ended with 55. During the year, 10 people left.
- Average employees: (50 + 55) / 2 = 52.5
- Turnover rate: (10 / 52.5) × 100 = 19%
What's a Normal Turnover Rate?
Turnover rates vary dramatically by industry. Here are some national averages:
- Hospitality and food service: 70-80% (yes, really)
- Retail: 60-65%
- Healthcare: 20-25%
- Manufacturing: 15-20%
- Professional services: 10-15%
If your turnover is significantly higher than your industry average, it's a red flag. If it's lower, you're doing something right, and that's a strength worth protecting and studying.
Voluntary vs. Involuntary Turnover: What Your Numbers Are Really Telling You
Not all turnover is the same, so you need to track these separately:
- Voluntary turnover: Employees who choose to leave
→ This often points to problems with culture, compensation, or leadership. - Involuntary turnover: Employees you terminate
→This typically signals hiring, onboarding, or training issues.
If you lump these together, you’ll miss the real story your turnover data is telling you.
Why You Should Track Turnover by Department
Company-wide turnover rates can hide serious problems.
You might have one department with 50% turnover and another with 5%. That tells you something important about who's managing, not just who you're hiring.
Turnover rate shows you where your business is leaking talent and helps you spot people problems before they become profit problems.
Metric #2: Time-to-Fill – How Long It Really Takes to Hire and What That Delay Costs You
Every day a role sits unfilled costs your business something, whether it's productivity, overtime, missed revenue, or burned-out employees. Time-to-fill shows you how long it actually takes to hire someone once you know you need them.
How to Calculate Time-to-Fill
This metric tracks how many days pass between when you decide a position needs to be filled and when the new hire starts.
Formula: Date the position was filled - Date it was opened = Time-to-fill
Example: If you decided to fill a role on January 1 and the new hire started on February 15, your time-to-fill is 45 days.
Important: Don't start the clock when you post the job. Start it when you realized the position needed to be filled.
What Time-to-Fill Numbers Tell You
The national average time-to-fill in the U.S. is about 44 days, but your target will depend on the role and industry.
- Entry-level positions: 20-30 days
- Mid-level positions: 30-45 days
- Senior/specialized positions: 45-60+ days
Longer time-to-fill usually results in lost productivity and missed opportunity.
Why Your Time-to-Fill Might Be Too Long
If you're consistently taking too long to hire, ask yourself:
- Am I posting jobs in the right places?
- Is my interview process too slow or complicated?
- Am I offering competitive compensation and benefits?
- Do I have a strong employer brand that attracts candidates?
- Am I being too picky or holding out for the "perfect" candidate?
Delays often come from inside your process, not from the job market.
Break it Down by Role to Get Better Insights
Just like turnover, time-to-fill is more useful when you break it down by role or level. You might fill server positions in two weeks, but manager positions take three months.
Knowing these patterns helps you plan ahead, reduce hiring lag, and protect your existing team from burnout.
Time-to-fill reveals how efficiently you can respond when your team has a gap. Improving it starts with identifying what’s slowing you down.
Metric #3: Cost-per-Hire – What It Really Costs to Bring Someone Onboard
Most business owners drastically underestimate what it costs to hire someone. You might think it’s just a background check or a job ad, but when you add up everything, from your time to turnover, it’s often thousands more than you realize.
How to Calculate Cost-per-Hire
This metric tracks the total average cost to bring in a new employee, including recruiting, onboarding, and internal time.
Formula: (Total recruiting costs + onboarding costs) / Number of hires = Cost-per-hire
What Should You Include in "Total Costs"?
- Job board postings and advertising fees
- Recruiter or staffing agency fees (if applicable)
- Background checks and screenings
- Time spent interviewing (multiply by hourly pay for all involved)
- Onboarding materials and training costs
- Admin time for processing paperwork and setting up systems
- Any sign-on bonuses or relocation expenses
If it costs you time or money to get someone in the door, it belongs here.
What Cost-per-Hire Actually Looks Like
According to the Society for Human Resource Management (SHRM), the average cost-per-hire in the U.S. is around $4,700. But for small businesses, it's often higher because you don't have economies of scale.
Example: Hiring a restaurant manager:
- Job posting: $150
- Background check: $50
- Interview time (3 hours × $50/hour): $150
- Training materials: $100
- Administrative time/setup: $100
- Total: $550
But wait… if you interviewed five candidates to make that one hire, you actually spent $750+ in interview time alone. And if that person quits in 90 days? You just doubled your cost starting over.
Why This Metric Changes How You Hire
Once you know your true cost-per-hire, you start asking better questions:
- Should we invest in better job ads to attract stronger candidates?
- Would using a recruiter actually save us money long-term?
- How much are delays and bad hires really costing us?
Cost-per-hire helps you justify smarter, faster, more strategic hiring decisions because now you know the price of getting it wrong.
When you combine this with your turnover rate, you can calculate the real cost of employee churn. And that number often makes you rethink how much effort you put into getting hiring right the first time.
Metric #4: Offer Acceptance Rate – Are Great Candidates Choosing You?
You can have the best hiring process in the world, but if top candidates keep turning you down, something’s broken. Offer acceptance rate tells you how often people say “yes” to working for your business.
How to Calculate Offer Acceptance Rate
Formula: (Number of accepted offers / Number of offers made) × 100
Example: If you made 10 job offers last year and 8 were accepted, your offer acceptance rate is 80%.
What a Low Offer Acceptance Rate Tells You
A healthy offer acceptance rate is typically 85-90%. If you're below that, candidates are consistently choosing other employers over you.
This is incredibly valuable feedback.
A low acceptance rate often means:
- Your compensation isn’t competitive
- Your benefits don’t match what others are offering\
- Your interview process turns people off
- Your reputation as an employer isn’t strong
- You’re waiting too long to make an offer
In other words: They liked the job, just not enough to take it.
When Someone Declines, Always Ask Why
You won’t get every candidate to tell you, but when they do, their feedback is gold.
- Were they choosing between two offers?
- Was your offer lower than expected?
- Did your process feel slow, confusing, or cold?
- Were they unsure about your company’s future?
These insights can shape how you market roles, communicate, and improve candidate experience.
One Warning: Don't Obsess Over 100%
If your acceptance rate is too high (close to 100%), it might mean:
- You’re overpaying
- You’re only making offers to candidates who have no other options
- You’re playing it too safe and passing on stronger (but riskier) candidates
The sweet spot is 85–90%. It's strong, but still competitive.
Your offer acceptance rate tells you how the outside world sees your business. If the best candidates are saying “no,” that’s a visibility problem worth solving.
Metric #5: Quality of Hire – Are the People You Hire Actually Working Out?
You can hire fast, hire cheap, and even get people to say yes, but if they don’t perform or stay, what’s the point? Quality of hire is the metric that helps you measure whether your hiring decisions lead to real, lasting success.
How to Measure Quality of Hire
There's no single formula because "quality" means different things in different businesses. But here are some proven ways to measure it:
- Performance review scores for new hires in their first year
- Percentage of new hires who meet or exceed expectations
- Manager satisfaction ratings with new employees
- Retention at key checkpoints (90 days, 6 months, 1 year)
- Time to productivity—how long before they're fully contributing
Choose 2-3 of these metrics that make sense for your business and track them consistently.
What Quality of Hire Actually Tells You
If your new hires are consistently performing well and sticking around, it means:
- Your hiring process is attracting the right people
- Your onboarding is setting them up for success
- Your management and culture are working
But if they’re underperforming or leaving quickly? That’s a red flag in one or more of those areas.
Look for Patterns, That's Where the Value Is
This metric gets powerful when you zoom out and look for trends:
- Do certain hiring managers make consistently better hires?
- Do referrals perform better than job board applicants?
- Do people with specific experience or education succeed more often?
- Are you seeing any mismatch between interview scores and actual job performance?
These patterns help you fine-tune your hiring process and double down on what works.
Why This Metric Is Harder, but More Valuable
Tracking quality of hire takes more effort than other metrics. But it connects directly to your profitability, retention, and long-term culture, making it one of the most strategic numbers you can monitor.
When you get quality of hire right, turnover drops, productivity rises, and your business becomes more stable and scalable.
Where to Start: Pick One Metric to Stop Losing People and Profit
You don't need to track all five metrics right away. In fact, trying to do everything at once is overwhelming and usually leads to doing nothing at all.
Start with the metric that addresses your biggest pain point right now:
- If turnover is hurting morale and margins, start with turnover rate
- If hiring feels endless and frustrating, start with time-to-fill
- If you don’t know what hiring really costs you, start with cost-per-hire
- If candidates keep turning you down, start with offer acceptance rate
- If new hires aren’t sticking or performing, start with quality of hire
Pick one. Calculate your baseline from the last 12 months. Then, track it monthly for the next quarter. Once that becomes routine, you can layer in another.
The goal isn’t to become an HR analyst, it’s to stop guessing and start solving the people problems costing your business the most.
How to Use Your HR Metrics to Hire Smarter and Keep Great People
You came here looking for clarity on how to track your hiring and retention challenges, and now you have it. You know the five metrics that matter, how to calculate them, and what they reveal about your people problems.
If you’ve been hiring based on gut instinct, reacting when things go wrong, or struggling to keep great employees, this isn’t just an HR issue. It’s a profit issue. And now, you have the tools to start changing things.
In our next article, we’ll show you exactly how to turn these metrics into better decisions, like setting smart hiring goals, identifying weak spots early, and improving team performance long-term.
Until then, your best next move is to check out our guide on Building Your Ideal Employee Profile. It’s the fastest way to improve your next hire and avoid the cost of another bad fit.
At Whirks, we help small businesses use simple, meaningful data to hire better, retain longer, and reduce the stress that comes with managing people. If you're ready to stop guessing and start leading with clarity, we’re here to help.
Because the best decisions aren't made with gut feelings. They're made with data.
Topics:
