It’s the role of every human resources professional to make decisions that support the achievement of organizational goals by building and managing an effective workforce. Still, this can be a daunting task with a lot of moving parts.
One way to improve decision-making in HR is to set and track key performance indicators to gain insight into the effectiveness of your activities and initiatives. Consider tracking the following KPIs this year to ensure your HR strategies are supporting growth and expansion.
Recruitment
Having an efficient recruitment process is key to keeping hiring costs under control and attracting and retaining top talent. Some KPIs you can track to that end include:
- Per-Channel Conversion Rate: The percentage of candidates who apply after viewing a job ad on a particular advertising channel
- Application Abandonment Rate: The percentage of candidates who start an application but don’t finish it
- Offer Acceptance Rate: The percentage of candidates who accept an offer
- Cost-Per-Hire: How much it costs you to hire one employee for an open role
- Time-to-Hire: The length of time it takes to hire candidates for a role
- 90-Day Quit Rate: The percentage of new hires who leave the role before the 90-day mark
These metrics will help you understand how much recruitment is costing you and identify bottlenecks (such as lack of competitive employee compensation) that are keeping you from optimizing your hiring process, employer brand, and employee value proposition.
Productivity
Maintaining a reasonable productivity rate helps the workforce produce more goods and services in less time, leading to lower employee compensation costs and higher profit margins. Some KPIs you can track to ensure the HR department is supporting this goal include:
- Overtime Hours: How much time employees spend working past their normal workday hours
- Average Productivity Rate: The level of output per unit of input (usually measured in time or product)
- Percentage of Goals Reached: How many goals employees are reaching versus the total number of goals set
- Revenue Per Employee: The average amount of revenue each employee brings into the organization
- Quality of Work: How closely and how often performance or work delivered matches the expected work standards
- Total Cost of Workforce: A total of all direct employee costs, including salaries, employee benefits packages, recruitment, and payroll taxes
Knowing how productive your workforce is overall can help you understand what additional support they may need (such as better employee benefits or training opportunities) to improve performance.
Morale and Engagement
Raising employee morale and engagement can increase productivity, improve retention, and help prevent burnout. A few KPIs that can help you measure these things include:
- Employee Net Promoter Scores: A measure of how likely employees are to recommend the business as a place to work
- Turnover Rate: The percentage of employees who leave a company during a specified time period
- Employee Engagement Rate: The percentage of employees who approach work with enthusiasm
- Employee Referral Rate: The percentage of new hires who were referred to the company by a current employee
- Employee Satisfaction Rate: The percentage of employees who are content and happy with their role and the company they work for
- Absenteeism Rate: How often employees are taking unplanned absences
These metrics can help you drill down into issues with employee engagement to find and fix specific problems, such as employee compensation or lack of support.
Employee Growth
Employee growth is crucial because it can increase productivity and innovative thinking. The following KPIs can help you measure this growth:
- Average Employee Tenure: How long employees generally stay with your company
- Pipeline Utilization: The rate at which your business promotes or hires internal employees to fill positions
- Employee Training Participation Rates: The percentage of employees who take training when it is offered
- Training ROI: The percentage by which revenue increases when employees are trained on a new skill
- Development Plan Completion Rates: The percentage of employees who complete all training to become promotion-ready
By tracking these KPIs to improve employee growth, you can support a culture of innovation and boost your succession planning efforts.
Tracking HR KPIs Supports Good Decision-Making and Organizational Growth
KPIs can provide you with much-needed insight into workforce performance. In turn, you’ll find it much easier to spot trends, identify areas for improvement, implement targeted talent management strategies, and ultimately contribute to company success.
If you’re looking to improve recruitment, productivity, engagement, and growth with creative employee benefits packages designed with employee needs in mind, Benefits Advisory Group can help.
Contact our team today to access professional advice and customized solutions to provide true value for your employees and drive success across the organization.