HR Metrics and KPIs

Definition of Metrics

Quantifiable measures to track and assess the status of a process.
HR Metrics: Indicators that allow HR to track and measure various performance areas.
Examples: Time to hire, cost per hire, revenue per employee, absenteeism, employee satisfaction, voluntary turnover rate, overtime hours.

A subset of metrics that assess how successfully a company is accomplishing a strategic objective.
Must have a metric, a current value, and a target value (minimum or maximum value).
Connected with strategic objectives and change when a company's focus shifts.
Different companies have different KPIs depending on their strategic goals.

Strategic metrics used to evaluate how effectively a company achieves key business objectives.
Directly link with organizational strategy.
HR KPIs mirror organizational performance for HR based on relevant HR outcomes.
Can use a combination of KPIs to achieve a specific business objective.

Employee Headcount: Total number of employees, important for calculating other HR metrics like turnover rate.
Demographics: Includes age, gender, race, education level, location, and years with the company.
Absence Rate: Calculated by dividing the number of days absent by total working days.
Benefit Satisfaction: Measured through employee engagement surveys.
Employee Productivity Rate: Difficult to calculate; relates to speed or accuracy.
Employee Satisfaction Index: Measured via surveys; dissatisfaction can lead to turnover.
Involuntary Turnover Rate: Employer-led resignations as a percentage of total resignations.
Voluntary Turnover Rate: Employee-led resignations as a percentage of total resignations.
Unwanted Turnover Rate: Good performers leaving as a percentage of all performers.
Training Effectiveness: Measured by achieving training goals.
90-Day or 360-Day Quit Rate: Number of hires that leave within three months or a year.
Internal Promotion Rate: Reflects employees' ability to improve skills and progress within the company.

Leading Indicators: Measure future events and causes, dynamic but difficult to measure.
- Example: Productivity for labor cost.
Lagging Indicators: Measure current production and performance, simple but difficult to change.
- Example: Profit, Expenses, Customer participation, Renewal rates, Revenue.

Both sets should be used together for the most accurate and meaningful KPIs.
Example Questions for Leading Indicators: Strategies to boost exceeding goals, skill development, accelerating product development.
Example Questions for Lagging Indicators: Number of people at an event, total product produced, response received.