Top 6 Key Performance Indicators for Human Resources

Some people say that if something can’t be measured, it can’t be managed, and this believe applies perfectly well to human resources.

Measuring the performance of any activity within an organization is exactly what Key Performance Indicators, or commonly called “KPI’s” have been created for. Success events where the progress of a certain division or team show what they have achieved in terms of strategic planning and the goals that those teams are achieving are what make Key Performance Indicator so valuable for organizations. In short, KPI’s are probably the best way a company can measure and prove what goes well and what goes wrong in every single part of its existence.

Some KPI’s are more specific, detailed and deep than others, but what they all have in common is that they aim for the best, in people and in organizations, and thanks to the use of KPI’s many companies have been able to show their internal and external development.

Key Performance Indicators are part of the process of identifying potential improvements, therefore they will always be connected to bringing the best out of people because the truth is that if one of them is created it is because there is a possibility of getting things done the right way or because there is a better way of doing it.

In the world of human resources there are as many KPI’s as you can imagine but there is definitely a certain number of them that can be considered as true key indicators to measure its performance, that allow a constant follow up and adjustment that are necessary for optimizing processes, reducing costs and increasing productivity.

For more information on how to improve Employer branding, read our previous post.

Here are the top 4 KPI’s for Human Resources: some of them are focused on recruitment and some of them on employee development. The truth is, they are all necessary and according to Jason Hanold, they should all be part of any Human Resources plan.

1 . The average cost and time to recruit and hire

This indicator involves all the costs that are directly connected to the recruiting and hiring process of a new employee or member. In this indicator it is very important to measure the number of days it takes to fill the job opening.

2. The average cost of staff rotation

This indicator is calculated by comparing the number of employees a company has, with the number of employees that have left the company and their job. The ideal frequency to measure this is every three months so it becomes less complicated to identify the reasons why people leave their job.

3. The time employees remain in same job

This indicator shows how long an employee stays doing the same job and how long he stays in the company. It allows the Human Resources department to anticipate regarding people that are possibly leaving the company soon.

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4. The Percentage of employees’ retention

This is one of the ways to measure the stability within an organization. The way to calculate it is by comparing the amount of employees that have stayed in the company for a certain period of time, with the ones that started to work for the company in that same period of time. This is an indicator that also allows you to make plans in order to prevent people from leaving and avoid the costs related to when that happens.

5. The Percentage of employees gone through training in a specific period of time

This indicator shows how much and how often people receive training within the company. In fact, training is one of the responsibilities Human Resources has, that employees value the most. It will help in terms of deciding the direction a person’s professional and intellectual path should follow.

6. The Average training hours per employee

This indicator is similar to the previous one, only this one measures the amount of time an employee has spent in training, while the previous one measures the amount of employees that have received a specific training in a specific amount of time.

We could go on, and mention as many Key Performance Indicators for human resources. The important thing here is to take at least this list of indicators into account, if the goal is to measure some of the most critical details of what this part of the company is in charge of doing and additionally start making decisions based on real numbers that will eventually turn into better actions for generating better conditions that will help retain the employees, especially the ones that a company has never thought of letting go.