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4 Key Metrics for Staffing Companies

Understanding why an employee may choose to stay or leave your organization can be valuable a tool in helping you to design effective hiring practices.  Certain key metrics can make the difference in determining what areas may require improvement as well as where to allocate your resources for best results.       

Employee turnover is expensive.  The cost to advertise, recruit, interview, onboard and train each new hire can be costly.  If you understand how to calculate the following key metrics, you can be one step closer to saving your organization money.   


Turnover Rate is the rate at which your employees leave an organization and are replaced by new workers.  Turnover is the most important metric every staffing company should track.  To understand why an employee may leave is to understand what you can do to correct the problem.    

Monthly Turnover Rate = (Number of Separations in Month / Total Number Employed in Month)*100


The Retention Rate is the rate at which your employees stay.  Low staff retention rates can be costly to your employer.  If you understand why your employees stay, then you can begin to shape your hiring practices for best results. 

Retention Rate = (Number of Employees at End of the Month / Number of Employees at Beginning of the Month)*100

In the staffing industry, general turnover and retention rates may not always provide all the information you may require to make a “best practice” determination. The following metrics may provide further insight better suited to the needs within your organization. 


The New Hire Failure Rate is the rate at which your employees leave prior to their projected end date.  This type of “bad” hire can prove to be not only costly to your organization, but also potentially damaging to your client relationship.      

New Hire Failure Rate = (Number of Candidates Separated Prior to the End of their Contract / Total Number of Candidates Employed)*100


The Redeployment rate is the rate at which your employees are re-assigned after the initial placement.  This type of metric can help you identify when to follow-up during a placement to obtain the best result.

Redeployment Rate = (Number of Candidates Re-hired / Total Number of Termed in the period)*100

It is important to evaluate your key metrics, but it is even more crucial to understand what those numbers mean.  Don’t panic if you have high turnover numbers.  It is important to remember that some turnover is normal.  Start evaluating your numbers now and identify patterns, which will allow you to start making changes in your hiring practices, based on what you see.    

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