Resource Management

HR KPIs: Top 26 Key Indicators for Human Resources

October 20, 2023

In today’s ever-changing corporate environment, human resources (HR) departments play a critical role in determining an organization’s ultimate level of success. Human resources key performance indicators (KPIs) have evolved as important tools for upper management, chief people officers, managing directors, and country managers to optimize their staff and achieve strategic goals. These KPIs help HR leaders improve recruiting, talent development, employee engagement, and productivity with data-driven insights.

Importance of measuring HR performance

Key performance indicator metrics are essential for businesses to measure HR performance and ensure that HR is in line with the company’s broader business plan. Measuring the HR department’s performance ensures that the company’s most valuable asset—its employees—is managed most efficiently.

Insight into the HR department’s strengths and limitations, as well as improvement opportunities, can be gained through the use of HR KPI measurements. This could help optimize the HR process, employee engagement and retention, and the company’s overall success.

Tracking HR performance over time is also crucial for making informed decisions. Regularly tracking KPI indicators helps HR managers spot patterns and trends that reveal strategy efficacy. For instance, if a company has a high turnover rate, HR managers can examine the information to determine the root cause and implement solutions.

KPIs for HR: Metrics to Measure Success

Human resources key performance indicators are more than numbers; they are a barometer of an organization’s most valuable asset. They give you a bird’s-eye view of HR operations and give you insights you may use to make strategic decisions. Human resources key performance indicators (KPIs) are essential to business intelligence (BI) for coordinating employee efforts with strategic goals.

Recruitment and Talent Acquisition KPIs

Time to Fill

Time to Fill is a metric used to assess how long it typically takes to fill a position. This timeline covers everything from advertising a position to the day a new employee begins work. According to Glassdoor, the average time to fill a job vacancy in the United States is 23.8 days. This key performance indicator is critical for sustaining an effective recruitment procedure. Critical positions are filled quickly, allowing teams to work at full capacity and preventing top talent from leaving for competition.

Formula: (Total time taken to fill all job vacancies) / (Total number of job vacancies filled)

Cost Per Hire

The Cost Per Hire method estimates how much it will set a company back in terms of time and money to find and hire a new employee. The Society for Human Resource Management (SHRM) reports that the average cost per hire is approximately $4,000. It’s useful for businesses in determining how much to spend on recruitment and what techniques to employ. A company’s recruitment efforts will become more efficient if the cost per hire decreases.

Formula: (Total recruitment costs, including advertising, agency fees, and staff time) / (Total number of hires)

Quality of Hire

The quality of hire metric is used to assess how valuable new hires will prove to be over time. New hires’ worth to the company is measured. Productivity and efficiency can rise due to hiring the best possible candidates. Hiring people of high caliber increases retention rates, saves money, and improves workplace morale.

Formula: (Performance ratings of new hires) / (Total number of new hires)

Source of Hire

Source of hire refers to the best places to find new employees. It sheds light on the most productive recruitment channels. Human resources can improve resource allocation and recruitment outcomes by gaining a deeper insight into the best candidate pipeline.

Formula: (Number of hires from a specific source) / (Total number of hires)

Employee Development KPIs

Training and Development Investment

A company’s investment in its workers’ education, training, and professional growth can be quantified by the percentage of its budget earmarked for these purposes. A competent and educated staff is essential to a company’s development and success. Spending money on training and education can increase productivity, creativity, and success in the work.

Formula: (Total investment in training and development programs, including costs) / (Total number of employees)

Employee Learning and Growth

Employee learning and growth KPI evaluates professional growth, such as acquiring new abilities and completing significant career milestones. Employees are more invested and content when their development is valued and monitored. Employees invested in their work are less likely to leave the company.

Employee Performance Rating

The employee performance rating system quantitatively measures performance against established benchmarks. Evaluations and assessments are a common part of this process. Accurate performance evaluations allow businesses to reward excellent work and pinpoint problem areas. The information is priceless for HR planning and employee growth.

Formula: (Sum of performance ratings for all employees) / (Total number of employees)

Employee Engagement KPIs

Employee Engagement Score

The employee engagement score assesses workers’ investments in their employment and the company. Gallup’s “State of the Global Workplace” report states that only 15% of employees worldwide are engaged in their jobs. An engaged workforce increases output, innovation, and loyalty. Employees are more likely to stick around and use fewer sick days when their engagement level is high.

Formula: (Engaged employees) / (Total number of employees) x 100

Employee Net Promoter Score (eNPS)

In the same way that the net promoter score evaluates customers’ loyalty, eNPS assesses workers’ propensity to promote their workplace to others. A high eNPS score represents an encouraging and productive workplace environment. Workers enthusiastic about recommending their company to others are more likely to attract and retain talented newcomers.

Formula: (Promoters – Detractors) / (Total number of respondents) x 100

Voluntary Turnover Rate

The percentage of workers that leave the company voluntarily, as opposed to being laid off or let go, is known as the voluntary turnover rate. The voluntary turnover rate is lower when employees are happy in their jobs. Less money is spent on hiring new people, more knowledge is retained, and morale is maintained.

Formula: (Number of employees who left voluntarily) / (Average number of employees) x 100

Workforce Productivity KPIs

Revenue per Employee

Revenue per employee is a metric used to analyze a company’s profitability on a per-worker basis. According to Statista, the revenue per employee for technology giant Apple Inc. was approximately $2.4 million in 2022. This metric can gauge the effectiveness and efficiency of the workforce. A higher revenue per employee indicates efficient use of human capital, which leads to more profits.

Formula: (Total revenue) / (Total number of employees)

Absenteeism Rate

Absenteeism employees’ unplanned absences from work are measured as a proportion of total workdays. Absenteeism must be reduced to ensure that business may continue normally and efficiently. Reduced absenteeism helps keep productivity high and the office running smoothly.

Formula: (Total days of employee absence) / (Total available workdays) x 100

Overtime Percentage

The percentage of overtime employees work is calculated as the number of overtime hours divided by the total number of normal work hours. Overtime must be managed to keep expenses down, keep workers happy, and avoid burnout. This key performance indicator keeps workers from taking on too much to avoid burnout and maximize productivity.

Formula: (Total overtime hours worked) / (Total regular work hours) x 100

Diversity and Inclusion KPIs

Diversity Index

The diversity index calculates the number of women and people of different races and ethnicities in an organization. Teams with a diverse mix of backgrounds and experiences are more likely to come up with novel solutions. An inclusive and stimulating workplace can only be created by actively encouraging diversity.

Formula: (Number of diverse employees) / (Total number of employees) x 100

Inclusion Rating

The inclusion rating measures how people feel treated fairly, accepted, and valued at work. A sense of community and acceptance in the workplace has been linked to greater commitment, innovation, and loyalty among staff members. When workers have a strong sense of belonging, they are more motivated to impact the company’s bottom line positively.

Compliance and Legal KPIs

HR Compliance Index

The HR compliance index evaluates how well a company follows human resources and employment legislation. It is crucial to ensure compliance to reduce legal risks and avoid expensive legal complications. It helps keep the faith of both employees and outsiders in the company at a high level.

Formula: (Number of HR policy compliance incidents) / (Total number of HR policy assessments) x 100

Employee Relations Cases

The amount of complaints, disagreements, and investigations in the workplace are recorded in employee relations cases. Harmony in the workplace is impossible to achieve without effective management and prevention of employee relations situations. It helps keep things running smoothly and gets disagreements resolved quickly.

Formula: (Number of employee relations cases) / (Total number of employees) x 100

Compensation and Benefits KPIs

Total Compensation Ratio

The total compensation ratio evaluates employee pay in relation to the business’s success as a whole. Fairness and openness are improved when pay is tied to performance and the business’s health. It makes sure that workers get paid properly for the work they put in.

Formula: (Total employee compensation) / (Total organizational financial performance)

Benefits Satisfaction

Benefits satisfaction gauges how contented workers are with their compensation and benefits packages. If workers like what they get from their perks, they’ll be more inclined to stay with the company. It plays a significant role in both employee happiness and retention.

HR Technology KPIs

HR Technology Adoption Rate

The HR technology acceptance rate monitors how frequently employees use and adopt HR software. Using technology in human resources allows for more streamlined operations and increased productivity. As a result, HR departments are freed up to concentrate on more important, strategic endeavors.

Formula: (Number of HR tech users) / (Total number of employees) x 100

Time Spent on Administrative Tasks

The time that human resources staff spend on routine, non-strategic tasks can be estimated using the time spent on administrative tasks metric. Human resources professionals can devote more time to strategic HR initiatives and key activities, such as talent management and development, if they spend less time on administrative work.

Formula: (Total hours spent on administrative tasks) / (Total HR department hours)

Workplace Safety KPIs

Lost-Time Injury Rate

Researchers developed the lost-time injury rate metric to determine how safe an organization’s workplace is. Maintaining a risk-free workplace protects workers and cuts down on injury-related expenses.

Formula: (Number of lost-time injuries) / (Total hours worked) x 1000

Workplace Satisfaction

Employees’ level of contentment in their work setting is measured in terms of their overall satisfaction with their workplace, including its culture and facilities. Employees who are happy in their jobs are more invested in their work, produce better results, and create a more pleasant environment for everyone.

Succession Planning KPIs

Leadership Pipeline

Potential future leaders in the organization are assessed using the leadership pipeline. Having a solid leadership pipeline helps a company save money on costly external recruitment efforts while fostering continuity.

Formula: (Number of internal candidates for leadership positions) / (Total number of leadership positions)

Succession Fill Rate

The succession fill rate measures how many top positions were filled from inside an organization. Investment in talent development is crucial to a company’s long-term success, evidenced by effective succession planning and a high succession fill rate.

Formula: (Number of leadership positions filled internally) / (Total number of leadership positions) x 100

HR Budget Management KPIs

HR Budget Variance

The HR budget variance analyzes spending in relation to forecasts. Controlling spending over and under projections helps HR make the most of its limited resources.

Formula: (Planned HR budget – Actual HR spending)

There are a total of 26 HR KPIs that are essential to the management and improvement of the HR department. When used properly, they help HR managers make more informed, data-driven decisions that benefit the company. 

HR professionals and upper management may make educated decisions to align their staff with strategic goals and enhance HR procedures by regularly monitoring and understanding these KPIs. HR departments can gain a strategic advantage through better decision-making when they have access to and can evaluate the vast amounts of HR data available through Business Intelligence tools like Power BI and Tableau.

Role of HRMS in measuring HR KPIs

An HRMS is an indispensable tool for tracking key HR metrics. These programs were developed to simplify and speed up HR operations, including data collecting and analysis. To further optimize HR procedures, HR managers can use an HRMS to access and evaluate data linked to HR KPIs quickly.

An HRMS’s ability to collect and analyze data in real-time is a major perk for HR managers measuring HR KPIs. Data collected in real-time allows for prompt resolution of problems. This can potentially boost the effectiveness of HR operations within a firm.

Management of key performance indicators (KPIs) can also be simplified with the help of an HRMS. An HRMS can automate the process of gathering and evaluating data from many sources, saving HR managers time and lowering the likelihood of human mistakes. 

Human resource managers can use an HRMS to compile and distribute performance reports to upper management and other interested parties.

How can Brickclay Help You Meet Strategic Goals?

Brickclay’s Business Intelligence solutions offer organizations the means to transform their HR departments into data-driven powerhouses. To better connect workforce plans with business goals and improve HR efficiency, HR professionals and upper management can use our data integration and visualization solutions to receive actionable insights from the top 26 HR KPIs. 

The ability to track data in real-time and make educated decisions gives businesses an edge in their markets. Each organization may have unique KPIs, and our adaptable solutions ensure that these KPIs are tailored to align with specific strategic objectives. 

With Brickclay’s assistance, organizations can make smarter HR decisions, cultivate an engaged and productive workforce, and drive success in today’s data-centric business landscape. Contact us if you want to learn more about how our Business Intelligence solutions may improve your HR tactics and boost your company’s success.

About Brickclay

Brickclay is a digital solutions provider that empowers businesses with data-driven strategies and innovative solutions. Our team of experts specializes in digital marketing, web design and development, big data and BI. We work with businesses of all sizes and industries to deliver customized, comprehensive solutions that help them achieve their goals.

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