Talented and engaged people are the engine room of your company.
It’s important to know if you’re doing a good job at looking after your people and developing them in your company.
Human Resources (HR), and Human Capital, have in recent years become a strategic asset to companies of various sizes.
HR teams recognise that to achieve a successful business you need the right people behind you.
Hiring, retaining and measuring the right talent is important – and this can be done through
measuring HR Key Performance Indicators (HR KPIs).
HR KPIs will correlate with the performance of Human Resources as a department and the business as a whole.
This correlation is what makes KPIs different to the more generically labelled ‘metric’.
If you’re an HR Manager or HR Executive here are some great HR KPI examples you should definitely track if you’re
serious about people fuelled revenue growth.
Some of these HR KPI examples would be great if escalated to HR OKRs. Good Key Results can often be as simple as using a
Verb like ‘Reduce’, a KPI like ‘Cost Per Hire’, and a Target Value like $1,000.
Your KPIs really are the metrics that matter most because they are often mostly connected to performance, either in a leading or lagging way.
Focusing your efforts on improving them and measuring them can only have one outcome – performance improvement.
Here are some KPIs for HR that are designed to measure what matters.
In Human Resources “Yield Ratio” shows the percentage of candidates from your organizations recruitment source(s) that were selected to progress to the next stage of the hiring process. The result of this will focus recruitment strategy on reaching the right candidates for the role at a lower cost to the company.
Simply put – Yield Ratio shows the efficiency of your recruitment method.
An example of a company utilizing the Yield Ratio would be if a job was advertised on a job board or platform such as LinkedIn. Imagine if the advert was visited by 300 visitors and the contact form was submitted 20 times. From these submissions 5 candidates were shortlisted for an interview. The Yield Ratio would read like this:
Time to Hire
This would be a good indicator of the HR hiring process. However, it’s stronger if “Time To Hire” looks into the way talent managers spend their time than about the time itself. For example – time to hire is supposed to show how fast the Human Resources department is able to process leads and convert them to interviews, and later to hires. But it might also show how carefully an organization examines leads and new talent – this would be considered as Quality of Hire.
Cost to Hire
This metric summarizes all costs around recruitment. These costs are divided into internal and external.
Employee referral bonuses
Tools costs (software license, office space)
(Recruiter/agency compensation/background check)
(career fairs, on-campus presence, etc.)
HR teams should know how to track learning and professional development efforts in their company. Professional development is a key factor of preparing your company for the current and future challenges you may face. Here is how you might consider measuring training initiatives.
Employee engagement is a strong leading factor of employee performance.
High employee engagement leads to the overall success of the company.
Employee engagement is not employee satisfaction, motivation or happiness at work.The most reconized approaches for HR teams to quantify employee engagement is from The Gallup Q12 index who regularly published the “State of the Global Workplace”. To really understand employee engagement KPIs you will need to ask a series of questions, like the ones listed below, then quantify the answers.
Are you fully aware of what is expected of you at work?
Metric: % of the tasks had clear, ambiguous requirement.
Do you have the resources, materials and equipment to do your work?
Metric: Tools and materials availability.
Do you have the opportunity to do what you do best professionally every day?
Metric: Expertise/routine task ratio
Have you received recognition or praise for doing good work? (Preferably for the past 7 days)
Metric: Recognition frequency
Does your supervisor/manager/boss or someone at work care about you as a person?
Metric: Personal approach index
Do your opinions count at work?
Metric: Idea to systematic discussion rate, %
Does your job feel important next to the organization’s mission/purpose?
Metric: Idea to systematic discussion rate, %
Are your fellow employees committed to doing work of great quality?
Metric: % of the goals with leading/lagging metric
Have you had opportunities to learn and grow in the past year?
Metric: the number of learning and growth opportunities in last year
When thinking about and planning KPIs for HR departments it’s important to remember the usual and traditional measures such as employee satisfaction to absenteeism and sick leave. Measuring employee performance and company culture KPIs is a great, but not worth much if the fundamentals are ignored. Consider splitting up your HR KPIs into 4 categories – Compensation, Culture, Employment and Performance.
Remember that if some of these metrics are vital to your business they can be escalated to form OKRs.
% of Cost of Workforce
The SCR (Salary Competitiveness Ratio)
Satisfaction of Company Benefits
Employee Productivity Rate
Return on Investment
% of Annual Leave Taken
Number of Employee Satisfaction Surveys
%Trained in Company Culture
NPS (Net Promotor Score)
Number of Full-Time Employees
Number of Contractors
Revenue Per Employee
Employee Happiness %
Employee Satisfaction Index
Length of Employment
Voluntary Termination Rate %
Involuntary Termination Rate %
Staff Attrition Rate %
Cost Per Hire
Referred New Hires
Average Time to Fill a Job Vacancy
Candidates Interviewed Per Hire
Internal Promotions Vs. External Hire Ratio
Job Offer Acceptance Rate %
New Hire 90-Day Failure Rate %
% of Candidates Who Meet Job Criteria
Rate of Internal Job Hires
Performance of New Hires
Internal Promotions Vs. External Hires
Internal Promotion Rate
Cycle Time To Process Payroll
Cycle Time To Resolve Payroll Errors
Within a given period sum all salaries and divide it by the total company costs.
Divide the average salary in your organization by the average salary offered by competitor companies,
or by the rest of the industry you’re in.
See how satisfied an employee is with specific benefits they are offered by your company. This can be determined through
employee surveys and can be used to break down each benefit that you offer individually.
Use this to measure workforce efficiency over time. Take the total company revenue and divide it by the total number of employees.
Ensure that the money you are putting into training employees is paying off. This can be defined as the
profit per $ invested in social compensations/wages.
This metric is about talent retention. Use a company-wide survey to gauge employee happiness.
This KPI will show the company attitude towards a healthy work-life balance. Observe the number of annual leave days
used as compared to those unused in th eorganization.
Understand how much effort is being put into maintaining and improving employee happiness in your company.
Measure the importance and understanding of company-wide culture.
Use this KPI to measure how likely an employee is to recommend the company as a place to work. Do this looking at the
difference in percentage of promotors and detractors.
Let’s start with the simplest of all. The number of Full Time employees in the business.
Not all the people in your company are going to be employees. So it’s a good idea to also track the number of
Contractors in the business. You could also track Part-time Employees.
When you know how many people you have, you can combine it with your revenue KPI
to calculate the Revenue Per Employee.
The best companies are able to maintain or even accelerate their Revenue Per Employee. It indicates that the company
is achieving economies of scale and understand the increasing or decreasing efficiency of the business.
Employee Happiness and company performance are linked. This is why employee surveys are
becoming commonplace as they allow you to track KPIs like Employee Happiness which is the
% of people self-selecting a level of happiness like Very Happy.
Similar to Employee Happiness is a KPI called Employee Satisfaction. Again this is captured
through a survey and can be expressed as an Index.
A KPI that should correlate with Happiness and Satisfaction is the Absenteeism Rate. Happy employees take less
sick days. If they don’t correlate or absenteeism is too high you should find out what is wrong.
How long your talent stays is another indication of how you’re going to perform. So tracking the
Average Length Of Time Employed is an essential KPI to track and create goals from.
People will leave the company. It’s really useful to track the number of employees that have voluntarily left.
It’s also useful to know the flipside of that coin. The number of employees that have involuntarily left the company.
A variation on the leaver theme is The Staff Attrition Rate, which is the % of employees that leave in
a given period divided by average number of employees in the same period.
People leave and need to be replaced. You also need to hire for growth. Hiring talent can be an expensive process and
tracking the Cost Per Hire means you can focus on ways to reduce it, and understand the cost of not retaining talent.
One of the ways you can bring down the Cost Per Hire is to get more candidates and hires referred by existing employees.
Again, tracking this as a KPI and then using it as a Key Result means you focus on ways to improve it.
Vacancies that remain unfilled can be costly. Which is why you’d want to track and focus on reducing the
average amount of time it takes to fill a job vacancy.
Measuring interviews per hire is a good indication of your ability to attract talent for interview.
You’d rather not be seeing only one person per hire. The KPI is simple and literally the average
number of interviews required to fill positions during a period.
Hiring from within is always a good sign of company health, assuming people have the ability to step-up.
It also shows other employees that the company is a place where people are able to progress and evolve.
So track the ratio of jobs filled through internal promotion vs an external hire.
If you’ve attracted talent to interviews, job offers should follow. But interviews are a two way process and the
best candidates need to say yes. So tracking the job acceptance to job offers made as a % makes sense as
it would indicate hiring challenges and also provides a focus for improvement.
If you hire well people settle quickly and stay. You will need to track KPIs like the % of
new hires that leave in the first 90 days to diagnose issues and set goals.
Glassdoor is going to be reviewed by people you’re looking to attract as well as used by current employees.
You need to track and target improvements. Here are KPIs you should keep track of and set goals against.
Recommend A Friend %
Culture & Values
Comp & Benefits
Evaluate the effectiveness of job postings/adverts in reaching top candidates.
Shows the effectiveness of talent development.
The performance of new employees can be compared to that of other employees.
This is done by evaluating performance reports.
This ratio is to measure how many people already working at a company are considered for an internal promotion versus the
number of externally attracted people. This is particularly effective when looking at organizational succession planning.
This KPI will indicate successful retention and growth of top performers in the company. This can be measured by
dividing the number of promoted individuals by the total number of employees.
It’s important to make sure that internal promotions are for the right reasons and
that the individual is ready for the role.
This will show the timeframe of process, giving projection if assistance/updated process is needed.
This is the number of business days from start to finish.
A similar KPI could be to measure the time it takes to resolve Payroll errors.
This is to measure and keeps tab on the amount of poorly performing employees in your company.
FREE OKR Download
If you want to improve KPIs, creating KPI Dashboards is the natural next step.
These KPIs can and should also be used inside Key Results as part of setting goals using OKRs.
Remember that when setting your targets to be ambitious. Goals are deliberately designed to be hard to achieve,
as this is what drives greater creativity, efficiency and effectiveness.
The data can be gathered from integrations with Salesforce and other Sales and
Marketing technologies you’re using, or update KPIs manually.
Inside ZOKRI you can create Dashboards and create OKRs from KPIs. You can also create and manage Initiatives
targeting these KPIs and OKRs in ZOKRI or by connecting task managers like Trello and Asana.
Measuring KPIs that matters, setting goals and aligning and optimizing your operations is
the key to performance growth and is what ZOKRI is designed to do.
Here is a list of great articles and content on the topic of KPIs for Human Resources.
Read an exploration of KPIs for HR teams and study the characteristics of Good HR KPIs from The Academy To Innovate HR.
Explore human resource metrics. Identify how to use metrics and then learn what metrics to use in your teams and company.
Every HR team has different goals and priorities – this article encourages you to focus on your company’s plans and goals.
Tom Haak of the HR Trend Institute talks about 11 trends he sees as important for HR teams in 2021.