To ensure continual growth and achievement, many companies create goals, or Key Performance Indicators (KPIs), and facilitate a formal KPI program. Often, these goals are tailored to individual departments, including Human Resources (HR), and are used to measure topline success throughout the year. Learn what a KPI in HR looks like, dive into HR KPI examples, and discover how best to implement and measure overall performance below.
What Is an HR KPI?
A KPI in HR should align with the department’s annual targets and focus areas. In human resources, company objectives may center around employee retention, employee satisfaction, effective training, or diversity and inclusion. To develop a useful KPI program, HR leaders should narrow down and select one to three core focal points of the department for the upcoming year. This is essential to guiding the next step: selecting KPIs.
Defining the KPI Program
After aligning with the department’s overarching goals, it’s time to choose the individual KPIs. Each HR KPI should be specific and measurable to ensure actionable changes can be made. Select anywhere from one to five total KPIs. While the final number may vary by department size and breadth of annual goals, it is wise to avoid creating too many goals. An overwhelming amount of KPIs can create decision paralysis.
See the list of possible HR Department KPI examples below. While these HR KPI examples below can apply to most workplaces, we encourage professionals to brainstorm more options specific to their company.
HR Department KPI Examples
Recruitment:
- Cost-Per-Hire: The amount of money spent toward recruiting new employees
- Offer Acceptance Rate: The percentage of which new offers are accepted by candidates
- Time-To-Fill: The amount of time between an employee leaving and a backfill replaced
Employee Satisfaction:
- Turnover Rate: The amount of employees voluntarily leaving throughout the year
- Employee Duration: The average amount of time an employee stays with the company
- Employee Satisfaction: The general sentiment of employees, often captured through surveys
Training & Performance:
- Dismissal Rate: The number of employees terminated from existing positions
- Company Achievement Rate: The percentage of business objectives that companies can achieve
- Employee Advancement: The rate at which existing employees can advance in title or pay within the company
Implementing the Plan
After reviewing the HR KPI examples and choosing which goals to start with, it is now time to put the KPI program into action. Outline a strategy for how the department plans to achieve these KPIs. Each step should be clear and attainable and include a timeline to keep everyone on track. Once you’ve selected the actionable steps and timelines, communicate them to the larger group.
Present the plan to everyone in the department. Allow for questions and feedback, and adjust as needed until everyone is aligned and bought in.
Now the work begins.
Reviewing and Refining the KPI in HR
As the year progresses, be sure to regularly check in with the larger team and review the goals, action steps, and timelines. If an area is falling behind, be sure to address and course correct early. Additionally, embrace change as needed. Sometimes situations arise and goals need to shift. A KPI in HR should be firm but not rigid. If a change is needed to better align with new information, make the change and communicate the update to the department to ensure fresh alignment.
At the end of the year, review all progress, celebrate wins, and decide on new KPIs for the upcoming year.
Let HREN Be Your Guide
Designing and implementing a successful KPI program is no simple feat. While selecting a few goals from a list of HR KPI examples may seem straightforward, meaningful implementation can be time-consuming. HR Education Network (HREN) can help. Professionals can take our KPI micro-credential course and learn the best ways to action a plan at their company, whether large or small. Additionally, our micro-credential courses also help users earn credits toward larger certifications.
