Human Capital Management

Are You Measuring Your HR Performance with the Right KPI’s?

/ December 3, 2021 December 3, 2021


In any business, measuring with the correct key performance indicators is the most strategic way to make important business decisions. For the Human Resources departments, choosing the correct KPI’s show the results of two things: the performance that policies have and the impact these polices have on the entire organization.

What are HR key performance indicators?

In HR, these are considered to be common HR functions such as recruitment, policy planning, and training, that you can track the impact of over a set period of time to find specific insights. These measurements are then used to determine the effectiveness of current programs, individuals/departments, and the overall company.

Choosing the Correct KPI’s

When it comes to choosing which KPI’s are right for your HR department to focus on, it’s important to keep in mind the business goals your organization is trying to reach. Whether it’s to measure the performance of particular employees, track the progress of how training programs are impacting your workforce, or improving your hiring and onboarding processes, all require focus on different aspects of your strategy.

Below we’ll lay out a few KPI’s that are beneficial for any HR Department to track:

  1. ROI: Tracking return on investment is simple enough to measure, simply dividing net profit by cost. This KPI can be used for several things including cost to hire, cost to train, training effectiveness, recruitment expenses, and much more. This measurement is the best way to determine whether investments are paying off both personnel and the overall organization.
  2. Retention: Employee retention is a key indicator of stability and strength in any company’s workforce. This allows you to measure how long employees on average are remaining with your organization, allowing the opportunity to analyze why this is and how you can increase retention going forward. If employee turnover rates are high, it may be time to reevaluate the onboarding process and make changes to align with reasons your retained talent is staying.
  3. Satisfaction: For any department, keeping track of employee satisfaction goes hand-in-hand with retention and measures how motivated employees are to work for your organization. This is an easy enough KPI to measure by utilizing something as simple as an anonymous survey to determine whether employees are happy, and what common changes they’d like to see in the future. These surveys are sometimes the only ways to tell if there are any major changes to be made, so keeping tabs on how your employees are feeling is important.
  4. Productivity: Measuring productivity can mean tracking employee performance, average completion time for projects, employee efficiency, or any means of understanding how long and how well tasks are completed. This KPI is essential to determining where improvements can be made to streamline business processes.
  5. Training Effectiveness: By providing learning opportunities for employees, you strengthen your workforce. Training can help you understand your employees’ needs and better understand  where they are looking to grow. By developing employees in areas that they may be lacking, you are not only improving your business but showing your employees you care by investing in their needs. This KPI can be measured through retrieving feedback from employees on programs you have them participate in or by examining the impact it has on performance in the long-run.

Key performance indicators are personalized based on department and company goals. Not sure where to start? Speak with one of our experts today about your HR Strategy to see how we can help with your planning process.