For mid-market CFOs, tracking the right workforce metrics—eNPS, turnover costs, EBITDA margin, NOCF, and cash runway—is critical to optimizing costs, improving operational efficiency, and driving business success.
The role of a CFO has changed a lot over the past decade. It's no longer just about crunching numbers or balancing the books—CFOs today are becoming key players in shaping company strategy. And one area where you can make a real difference? Workforce costs.
Workforce expenses are usually a company’s biggest operational cost, especially for mid-market businesses. Yet, many companies struggle to connect the dots between their people strategy and their bottom line. That’s where tracking the right metrics can help. Below are five game-changing workforce metrics that every mid-market CFO should keep an eye on to ensure costs stay under control while keeping employees engaged and productive.
What It Is
Employee Net Promoter Score, or eNPS, measures how engaged and satisfied your employees are. It’s similar to the customer NPS metric, but instead of asking customers how likely they are to recommend your product, you ask your team about their experience at work.
For example:
Why It Matters
Engaged employees are productive employees. They’re less likely to quit and more likely to contribute to your company’s growth. For CFOs, eNPS offers a quick snapshot of workforce morale—and it’s often a leading indicator of bigger issues like turnover or productivity slumps.
How to Track It
Send out anonymous surveys at least twice a year and calculate the score by subtracting the percentage of detractors from promoters. If your eNPS is low, it’s a sign to dig deeper into what’s driving dissatisfaction.
What It Is
Turnover costs are the expenses tied to losing employees and replacing them. Think recruitment fees, training, onboarding time, and lost productivity.
Why It Matters
Turnover hits your bottom line harder than you might think. Beyond the financial costs, it disrupts teams and affects overall morale. A high turnover rate often signals deeper issues like poor leadership or lack of growth opportunities.
How to Calculate It
For example, if your company has 100 employees, and 10 leave in a year with an average replacement cost of $20,000, your turnover cost is $200,000 annually.
Pro Tip: Pay attention to which roles have the highest turnover. Losing a junior employee might not cost as much as losing a senior manager.
What It Is
EBITDA margin measures operational efficiency by showing how much profit your company generates before interest, taxes, depreciation, and amortization. It’s typically expressed as a percentage of revenue.
Why It Matters
Tracking EBITDA margin helps you see how well your workforce investments (like salaries, training, and benefits) are translating into financial results. It also helps you benchmark your performance against competitors in your industry.
How to Use It
This metric is your go-to for evaluating whether workforce costs are sustainable or if adjustments are needed.
What It Is
NOCF represents the cash flow your company generates from operations after covering day-to-day expenses, including payroll. It’s a clear indicator of financial health and how well you’re managing operational costs.
Why It Matters
A healthy NOCF means you have enough cash to pay employees, invest in growth, and cover unexpected expenses. If this number starts to drop, it’s a red flag that you may need to cut costs or find additional revenue streams.
How to Monitor It
Subtract operating expenses (including salaries) from operating income. Ideally, this should be reviewed monthly or quarterly to ensure cash flow aligns with workforce spending.
Key Insight for CFOs: If NOCF is tight, focus on optimizing payroll processes or renegotiating vendor contracts to free up cash.
What It Is
Cash runway measures how many months your business can operate before running out of cash, based on current burn rates. This is especially critical for mid-market businesses navigating growth or market uncertainty.
Why It Matters
Your workforce is your largest expense, so it’s vital to know if you have enough runway to sustain it. A shrinking runway can lead to difficult decisions like layoffs, hiring freezes, or delayed expansions.
How to Calculate It
Cash runway = Current cash reserves ÷ Monthly cash burn.
For example, if you have $500,000 in reserves and burn $50,000 monthly, you have 10 months of runway.
Actionable Steps
Now that you know what to track, the next step is putting these metrics into action. Here’s how:
By tracking these five metrics, you’ll not only gain better control over workforce costs but also position yourself as a strategic partner in the company’s growth. Workforce optimization isn’t just an HR challenge—it’s a financial opportunity.
Start small. Pick one or two metrics to implement today. As you integrate these into your routine, you’ll find they don’t just help you cut costs; they help you build a more resilient and engaged workforce.
Ready to take control of your workforce costs? Start tracking now—you’ve got this!
Workforce metrics help CFOs balance costs with employee productivity and engagement. They also provide insights into operational efficiency and financial health.
Dynamic metrics like cash runway should be reviewed monthly, while long-term metrics like EBITDA margin and NOCF can be assessed quarterly.
Yes, while designed for mid-market CFOs, metrics like eNPS and NOCF are universally valuable across businesses of all sizes.
Consider integrating HRIS platforms, financial reporting tools, or BI solutions for real-time tracking and insights.
Start small by tracking one or two key metrics, such as eNPS or turnover costs. Build from there as you establish systems for data collection and analysis.
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