What are HR KPIs, and how to measure them?

February 8, 2023

Key performance indicators (KPIs) are metrics we use in organizations to gauge the effectiveness of particular tasks or procedures. For example, we use HR KPIs in human resources to assess the efficacy and efficiency of HR projects and activities. Today, every company's goal is to automate time-consuming administrative duties using excellent HR software.

As your HR is responsible for hiring and retaining your best employees, the best way to do so is to track their success in your company. This way, you know when an employee you hired accomplishes their goals. 

This article will explore what KPIs mean in hr, how we can measure them, and some common examples you can use for your business.

What do KPIs mean in HR? 

There are a variety of HR KPIs you can use in your business. The KPIs you will use depend mainly on the HR projects and activities you track. Employee turnover rates, time to hire, employee engagement levels, and cost per hire are some of the more typical HR KPIs you will use. 

You can even track scheduling practices to improve work performance. These KPIs can give HR departments a thorough assessment of your employee's performance and assist them in pinpointing areas where they can improve.

How to measure HR KPIs?

How to measure hr kpis youbelee

Data collection, analysis, and decision-making are steps you will take to measure your company's KPIs. Here are some actions you can take to begin measuring HR KPIs:

  • Be sure to choose the KPIs that apply to your company and its culture: The exact HR initiatives and activities you aim to measure will determine how to proceed. Employee turnover rates, time to hire, employee engagement levels, and cost per hire are some typical HR KPIs you can have for your business.
  • Collect data: This means you will compile data on the KPIs you've chosen. Numerous sources, including employee surveys, HR software, and all payroll records, can provide the information you need.
  • Analyze the data you have gathered: This step involves reviewing your collected information to find any patterns, trends, and new information you can identify. To assist with this stage, you can utilize common-place tools like spreadsheets. You can go with specialized HR analytics software if you want a more in-depth analysis.
  • After you have reviewed the data, you can use the insights to make your decisions better. This, in turn, will have a favorable effect on your HR initiatives and operations. Increasing performance can entail adjusting HR procedures, plans, or projects you are currently working on while still gathering new data.

The critical thing to remember here is to make the data relevant to your company/organization. Only use the KPI data to provide insight into areas where your company or its employees need help.

HR KPIs examples

HR KPIs examples youbelee

Here is a comprehensive list of some commonly used HR KPIs:

  1. Employee turnover rate measuring. This type of KPI measures how quickly an employee will spend within your company. Attrition rates provide a good insight into how satisfied your workforce is and where you can improve.
  2. Time-to-hire is the average amount of time it takes for you to fill in any open job you have. This directly ties to your company's reputation and has a significant impact on both the productivity and efficiency of your company.
  3. Employee engagement levels provide valuable insight into how motivated your employees feel. You can do this through various surveys, focus groups, and other feedback your employees will provide.
  4. Cost per hire measures how much filling an open position will cost. This also includes recruiting expenses, hiring bonuses, and the cost of onboarding. Cost per hire is a good metric for calculating your HR's efficiency in the whole hiring process.
  5. Diversity and inclusion measure the level of diversity in your company, as diverse companies enjoy 2.5 times higher cash flow per employee. Diverse people in management will increase your company's revenue by 19 percent. Check out our article on diversity management for more details on this subject.
  6. Training and development is a measure that will provide insight into how effective are our training programs.
  7. Employee satisfaction will measure how motivated and satisfied your employees feel. By measuring your employee's happiness, you can see where there is room for improvement.

These KPIs will give your HR department a comprehensive overview of your employee's performance. It will also help them find the areas where they can improve. 

In conclusion

Hr departments should use KPIs to measure the impact of all of their initiatives. When you track all these KPIs, you will demonstrate the value you bring to the organization and the flaws you helped remove. This way, you will benefit both the company and the employee. In addition, you will help each be the best version of themselves by working on areas where they are weakest. 

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