8 Human Resources KPIs to Measure Employee Success

Is a Human Resources department just there to provide service-orientated benefits? Well, if you’re talking to a business that knows the true value of human resources, they’ll answer “no”. That’s because a human resources team with a strategic, organizational focus does a great deal to ensure the efficiency, profitability, and ultimate success of a company.

In order to do this, human resource management needs to know which key performance indicators (KPIs) to measure. These KPIs are strategic tools that can help a business to determine whether objectives are being achieved, and they come in many different forms: some are financial, some are cultural, and others focus on things like absenteeism, health, and happiness at work. Let’s take a look at some top KPIs for measuring employee success.

(Note that this article won’t look at KPIs with monetary value, but if you want to look at the financial indicators you should be measuring when it comes to weighing employee success, here’s what should be tracked).

Average Stay at the Company

This KPI tracks the average number of weeks, months, or years an employee stays with the company. It’s a useful way to measure retention and satisfaction: you should be able to infer a correlation between employee satisfaction and the length of tenure with your company.

Number of Freelancers as Human Resources

The number of freelancers or contractors your business uses is another useful KPI to measure. Keeping track of this figure will not only show you how much your business is spending on external capacity, but it should also help you to see which departments are under particular pressure from a resourcing or expertise perspective. Monitoring regularly should help you identify which parts of your business need new hires or what specific talent needs to be factored into a job advert.

Average Time to Fill a Job Vacancy

Tracking the average time to fill a job vacancy should show how effectively your business recruits new hires. You could use this figure to see if it’s taking too long to fill a job role, but it may also prove useful if you want to investigate what could be causing a time lag between creating a job role and filling it too. For instance, could you attribute a lengthy process to your business operating in a niche industry? Does it have something to do with the location your business is based in? Or is the advertised salary too low, for instance?

Percentage of Leavers in Their First Year

Keeping an eye on the percentage of leavers in their first year is a very important KPI to track. New hires are expensive, but if your business seems to be losing staff before they’ve hit the 12-month mark, it might imply that your onboarding process isn’t very good or that job descriptions and the reality of day-to-day tasks aren’t matching up well.

Diversity Rate

Measuring your business’s diversity rate is another useful KPI to track. It will help you to see whether or not your business is committed to hiring from many backgrounds. Also, this will enable you to see how effective your business is in fostering an accepting community.

Employee Satisfaction Index

It’s a good idea for businesses to track employee satisfaction from time to time. Many businesses do this on a quarterly basis, asking their staff to submit an anonymous survey so that business managers can get a feel for how happy their staff truly are. Keep an eye on this figure – can you identify any trends? For instance, satisfaction may dip seasonally if your business is particularly busy at certain times of the year, or satisfaction may have increased in correlation with the number of staff hired, implying that workers are not too over-stretched in their roles.

Percentage of Holiday Days Used

Measuring the percentage of holiday days used is another useful KPI for human resources departments to analyze. Rather than seeing 100% of holiday days used as a bad thing, consider it in a positive light. It may mean that your employees are good at managing their downtime. They are simply recognizing ‘burnout’ and seeing the importance of resting and recharging.

Percentage of Workforce Below Performance Standards

Finally, why not measure the percentage of your workforce that is performing below standard? Use the results from annual performance reviews to calculate an average figure across the company. Then you can look at how many employees scored below this. Use these results to take action. For example, if an entire department is performing badly, could it have something to do with their training? Do they have an effective manager? Do they have enough capacity to do their jobs properly?

Keep these KPIs in mind if you want to analyze your business’s effectiveness from an HR perspective. And remember – the true value of a human resources department lies in strategy as much as service provision.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan