What are HR performance indicators: The importance of KPIs

Also called HR KPIs, HR performance indicators are tools for analyzing and measuring the performance of a company’s employees. As a result, it is up to the human resources department to set up clear and easy-to-understand HR KPIs.

Indeed, these indicators are very important in the work of HR managers and have many advantages for both the company and employees. However, it is necessary to adapt these KPIs to the needs of the company in order to properly measure performance.

Here’s what you need to know about HR performance indicators and their importance.

HR performance indicators: What you need to know

In recent years, given their many advantages, KPIs have taken an important place in human resources management. They reveal, among other things, the HR issues that significantly impact the functioning of a company.

It is therefore necessary to understand them in order to be able to adapt them to the needs of the company.

Definition of HR KPIs

Called HR KPIs (Key Performance Indicators) in English, HR KPIs are tools for measuring and analyzing performance. They make it possible to measure various data relating to the HR policies in place in order to verify their effectiveness and to have a synthetic vision.

There is more than one list of HR performance indicators, but they are not exhaustive. In all cases, these indicators all converge towards the same objectives.

They aim to measure the effectiveness of the actions put in place to achieve specific objectives and to provide important data to support decision-making. HR KPIs are therefore strategic tools for analysis and management.

Like the eNPS (employee Net Promoter Score), which is a measure of employees’ commitment to work, there are several other examples of HR performance indicators that provide information on the organization’s performance.

However, it is advisable to limit yourself to a maximum of 5 or 10 HR KPIs to ensure a coherent and optimal strategy.

Characteristics of a Human Resources KPI

What are the HR performance indicators? The answer to this problem includes the clarification of the characteristics relating to it.

HR performance indicators provide important data to companies. However, to fully perform its function, a performance indicator must meet certain characteristics. It must be:

• Specific: refer to a clearly defined task or action;
• Achievable: realistic and adapted to working conditions;
• Time-bound: must cover a defined period;
• Relevant: must have a specific function and be oriented towards improving an area.

Also, a performance indicator that cannot be measured is not one, because it is essential to be able to interpret the data collected.

Some examples of HR KPIs

As previously announced, the list of HR KPIs is not exhaustive. There are various types of them and they can be classified by group.

In any case, HR KPIs should be adapted according to the size of the company, the sector of activity and also according to the objectives of the organization.

Recruitment indicators

Recruitment is an essential function of a company’s human resources department. If they are misconducted, they can have harmful consequences on the life of the company. The following indicators can help to keep it under control. These are:

• Monitoring the employer brand;
• The duration of recruitment;
• Recruitment success rates;
• On-boarding satisfaction rates;
• Recruitment costs, etc.

Apart from these indicators, the proportion of new employees, the time before interview, the retention rates and the average number of CVs processed by recruiters are all indicators that make it possible to maintain good control of recruitment.

HR performance indicators related to employee performance and engagement

It is essential in a company to regularly measure the performance of the teams working on the various projects. In order to do this, the following indicators should be taken into account. These are:

• The evaluation and evolution of the wage bill;
• Costs per hire and vacancy costs;
• The average rating of the quality and quantity of work provided;
• The percentage and evolution of annual interviews;
• The percentage and amount of goal bonuses.

The turnover rate in the company, the evaluation of the workload and the average rate of achievement of individual objectives are also other HR performance indicators to be taken into account to assess the achievement of global and individual objectives.

In addition, responding appropriately to employer brand challenges can help increase employee engagement.

HR performance indicators related to employee well-being and social climate

Well-being and social climate are HR issues at the heart of the HR strategy of human resources departments. For this, it is essential for HR teams to ensure that employees feel good in their professional environment.

Different HR KPIs make it possible to monitor well-being and social climate. They are:

• Employee satisfaction rate;
• The evolution of commitment to work and satisfaction;
• The turnover rate of new employees;
• The overall absenteeism rate;
• The rate of absenteeism by department or manager.

In addition, employees’ opinions can provide important data on their well-being and the social climate in the company. It is therefore necessary to integrate employees’ opinions into HR performance indicators relating to the well-being and social climate of employees.

You can find out more about the importance of employee reviews for this purpose.

Key HR performance indicators related to training and career management

Training is of paramount importance, in that it allows the company’s human resources to evolve with the world of work. It also represents a response to the challenges of employee employability. The KPIs to be taken into account with regard to training are:

• The average cost of training per employee;
• The percentage of employees trained;
• The satisfaction rate of the trainings;
• The success rate of the trainings;
• Total training costs.

With regard to career management, the indicators to be taken into account are:

• The level of qualification;
• Revenue per employee;
• The productivity rate of employees;
• The evolution of the number of positions to be filled internally.

There are many other HR performance indicators, both quantitative and qualitative, to take into account to increase productivity and achieve the objectives set by the company.

The challenge here is to successfully adapt the specific key indicators to the company’s strategy and needs.

The importance of HR KPIs

HR key performance indicators are the key to a company’s strategic and operational management. They are part of a process of progress and make it possible to analyze overall and individual performance.

HR performance indicators offer many advantages. Inter alia:

• They promote accountability and transparency by providing up-to-date and accessible information on the progress of a project;
• They make it possible to fight against demotivation at work by stimulating continuous improvement through the challenges of team achievements;
• They provide evidence-based data by reflecting the facts and the effectiveness of the actions carried out;
• They facilitate change and promote the identification of areas for improvement;
• They help improve coordination.

HR performance indicators have the capacity to transform companies. These are specific means of measuring the company’s performance through that of its employees.

HR dashboards

The HR dashboard is an effective tool for HR management. More specifically, it is a measurement tool composed of various HR performance KPIs. It centralizes a set of information and indicators and makes it possible to manage this set in a synthetic way.

Dashboards are now emerging as essential tools for HR departments. They make it possible to diagnose the state of a company at a given moment and to know the social climate that prevails there.

Also, they make it possible to predict the different strategies and can serve as an internal communication tool in companies. However, the dashboards remain partially relevant, as they only include known data.

Measuring performance in business has several advantages. The Human Resources department must therefore know how to use HR performance indicators to make the right strategic and operational decisions.