The plan outlines important HR KPIs that are essential in evaluating the performance and effectiveness of the HR department. Metrics like Employee Turnover Rate and Time to Hire help determine whether HR practices retain talent and whether hiring processes are efficient. For example, a high turnover rate could indicate issues with employee engagement or company culture.
Employee Engagement Rate and Absenteeism Rate provide insights into employee satisfaction and wellbeing. These metrics highlight areas where HR can implement improvements, such as wellness programs or better communication strategies. For instance, regular surveys can help gauge engagement levels and introduce necessary changes.
Training Cost Per Employee measures the financial investment in employee development, ensuring that the training aligns with company goals. By evaluating the effectiveness of these programs, companies can optimize their training budget and enhance workforce skills more efficiently.
Top 5 metrics for HR KPIs
1. Employee Turnover Rate
The percentage of employees who leave the company during a certain period of time, calculated by dividing the number of employees who leave by the average number of employees and multiplying by 100
What good looks like for this metric: 10-15%
How to improve this metric:- Enhance employee engagement programmes
- Improve internal communication
- Offer competitive salaries and benefits
- Create a clear career progression path
- Regularly review and improve company culture
2. Time to Hire
The average number of days it takes from when a job opens until an offer is accepted, indicating the efficiency of the hiring process
What good looks like for this metric: 40-50 days
How to improve this metric:- Streamline the interview process
- Utilise applicant tracking systems
- Enhance job descriptions
- Build a talent pipeline
- Increase employer branding
3. Employee Engagement Rate
The level of employee commitment and involvement towards their organisation, typically measured through surveys and engagement scores
What good looks like for this metric: 70-80%
How to improve this metric:- Regularly conduct employee surveys
- Offer professional development opportunities
- Recognise and reward employees
- Foster a positive work environment
- Encourage regular feedback sessions
4. Absenteeism Rate
The percentage of workdays employees are absent, calculated by dividing the number of days missed by the total number of workdays available
What good looks like for this metric: 1.5-3%
How to improve this metric:- Implement wellness programmes
- Improve workplace conditions
- Address potential causes of stress
- Provide flexible work options
- Promote a healthy work-life balance
5. Training Cost Per Employee
The amount of money spent on training each employee, including materials, time, and any external training sessions
What good looks like for this metric: $1,000-$1,500
How to improve this metric:- Evaluate the effectiveness of existing training programmes
- Utilise more in-house training resources
- Leverage online learning platforms
- Negotiate better rates with external trainers
- Ensure training aligns with company goals
How to track HR KPIs metrics
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your metrics.
