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Measuring HR Strategy Success: 5 Essential SME Metrics


Measuring HR Strategy Success: 5 Essential SME Metrics  @M923

Human resources are a crucial component of any business, and small and medium-sized enterprises (SMEs) are no exception. However, with limited resources and budget, SMEs need to be strategic in measuring their HR success to make informed decisions that will impact their overall business long-term performance and profitability. To achieve these outcomes, it is important to measure the success of your HR strategy. This can be done by tracking HR metrics that matter. While there are many HR metrics you can track, not all of them are equally relevant or impactful for SMEs. In this blog, we'll discuss seven HR metrics that matter for SMEs and how to measure them effectively. We will now explore some of the most important HR metrics for SMEs and how to measure them.

It is important to note that we will only explore the basics on formulars and examples as there are variants and complex methods that can be applied to suit larger complex organisations or specific business needs.



1. Employee Turnover Rate


Employee Turnover Rate @M923

This metric measures the percentage of employees who leave a company during a certain period and it is one of the most important HR metrics to track. High turnover can be a significant drain on SMEs, both in terms of time and resources. It may be an indication of issues with the work environment, leadership, or company culture. According to a study by the Work Institute, the average cost of losing an employee is 33% of their annual salary. In fact, studies show that it can cost up to 200% of an employee's salary to replace them. By tracking the turnover rate, SMEs can identify areas where they need to improve employee retention.

According to the CIPD, the average voluntary turnover rate in the UK was 13.5% in 2021. This turnover rate typically varies by business sectors, size and type of business, job type, e.g., retail, hospitality, engineering, sales etc, and other factors.


To calculate the employee turnover rate, divide the number of employees who left the business during a given period by the average number of employees working in the business during that same period, and then multiply by 100.

For example, if an SME had 50 employees at the beginning of the year and 10 left during the year, the turnover rate would be:


Average headcount - (50 headcount + 40 headcount) ÷ 2 = 45

Turnover rate = (10 leavers / 45 average headcount ) x 100 = 22%

2. Absence Rate

3. Training & Development ROI

4. Revenue per Employee

5. Employee Satisfaction Rate

In conclusion, tracking HR metrics is essential for any business and particularly, SMEs, to ensure that their HR strategy is effective and aligned with their business goals, identify areas needing change and take the necessary take action to continually achieve success.


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