Most HR business intelligence issues stem from a lack of documentation and planning on the front-end. What HR metrics, or\u00a0Key Performance Indicators (KPIs)<\/a>, are you going to measure? What are the target levels, or benchmarks, for each HR metric? Who is accountable for high\/low performance in each HR function? These questions are further complicated when analyzing the operations of a non-revenue generating function, or cost center, such as Human Resources (HR). The Human Resources Department plays a vital role in setting the company up for success, but does not contribute to the bottom line directly. So how can you measure success in Human Resources?<\/p>\n Let\u2019s take a look at these five \u2018layers\u2019 of performance, and the corresponding Key Performance Indicator examples for Human Resources, to provide you with a holistic, top-down view of Human Resources Department operations.<\/p>\n <\/p>\n How many people are working in Human Resources relative to the number of business unit customers (in this case, the \u2018customers\u2019 are the company\u2019s employees) that they serve? How many customers is each Human Resources employee responsible for?<\/p>\n Key Performance Indicator Example for Human Resources Departments # 1: <\/em>Human Resources (HR) Staffing Ratio<\/a><\/p>\n HR Key Performance Indicator Definition<\/strong>: The number of company-wide employees divided by the total number of Human Resources (HR) employees working for the company at the same point in time. HR Department employees are typically responsible for recruiting, hiring, employee relations, compensation and benefits management\/administration, payroll processing, training and development, and strategic human capital management operations.<\/p>\n HR KPI Calculation:<\/strong>\u00a0Total Number of Employees \/ Number of Human Resources Department Employees<\/p>\n Typically, you want your HR Staffing Ratio to be as high as possible, which would indicate that staffing levels within the Human Resources function are under control, and that each staff member is serving a large number of customers. Of course, you need to assess the quality of service being provided as well, but we will get to that later. A low, or lagging, value for this Human Resources Key Performance Indicator demonstrates the opposite: overstaffing, poor staff productivity, and non-standard, inefficient processes. Look to examine individual employee productivity and streamline (or automate) repetitive processes such as employee on-boarding and record management to improve lagging values.<\/p>\n Other Human Resources Headcount and Organizational Capacity KPIs for HR Managers:<\/strong>\u00a0 Recruiting & Hiring Staffing Ratio<\/a>,\u00a0HR Training & Development Staffing Ratio<\/a>, Recruiting & Hiring Staffing Ratio<\/a><\/p>\n <\/p>\n How much work is each individual HR employee producing? Who are the high and low performers? What are high performers doing differently?<\/p>\n Key Performance Indicator Example for Human Resources Departments # 2: <\/em>Requisitions Filled per HR Recruiting Employee<\/strong><\/p>\n HR Key Performance Indicator Definition:<\/strong> The total number of open positions (i.e., requisitions) within the company that were filled over a certain period of time divided by the total number of employees working within the Recruiting and Hiring function.<\/p>\n HR KPI Calculation:<\/strong> Total Number of Positions Filled \/ Number of Recruiting Employees<\/p>\n A high, or leading, value for this Human Resources Department Key Performance Indicator demonstrates that individual recruiting employees are on-boarding a sufficient number of new hires. Set a target to see which employees fall below a certain level and look to coach those staff members on how to improve their productivity. Look to high performers to establish best practices that can be rolled out to the entire staff. Of course, you also need to take into account the number of positions that are open and the quality of new hires being brought in before making a final judgment on employee productivity.<\/p>\n Other Human Resources Productivity KPIs for HR Managers:<\/strong>\u00a0Open Requisitions per Recruiter<\/a>,\u00a0Time to Fill,<\/a> Performance Reviews Conducted per Training & Development Employee<\/p>\n How frequently are employees leaving the company? Why are they leaving? How can we improve the hiring process to reduce turnover?<\/p>\n Key Performance Indicator Example for Human Resources Departments # 3: <\/em>Turnover Rate<\/a><\/p>\n HR Key Performance Indicator Definition:<\/strong> The number of employees who left the company (voluntarily or involuntarily) divided by the average number of employees working for the company over the same period of time, as a percentage.<\/p>\n HR KPI Calculation:<\/strong>\u00a0(Total Number of Employee Separations \/ Average Number of Total Employees) * 100<\/p>\n A high Turnover Rate can be indicative of several things: below average compensation levels (compared to other companies), a lack of thoroughness within the screening process, sub-par employee benefits and\/or less than ideal working conditions. In order to move towards industry leaders for this Human Resources Department Key Performance Indicator, benchmark compensation levels against peer companies and work on creating an interview process that will weed out candidates who are not a good fit for the company and the position being filled.<\/p>\n Other Human Resources Quality KPIs for HR Managers:<\/strong>\u00a0Job Acceptance Rate<\/a>, Employee Retention Rate, Voluntary Turnover Rate<\/a>, Involuntary Turnover Rate<\/a><\/p>\n Is the Human Resources Department providing quality service to its customers, the employees of the company? How satisfied are the customers? How can service be improved?<\/p>\n Key Performance Indicator Example for Human Resources Departments # 4:<\/em>\u00a0Interview-to-Offer Cycle Time<\/a><\/p>\n HR Key Performance Indicator Definition:<\/strong> The number of business days required to extend a job offer to a candidate after interviews are completed, from the time the candidate selected for the position was first interviewed until when the job offer is extended to that candidate.<\/p>\n HR KPI Calculation:<\/strong>\u00a0(Sum of Time to Extend a Job Offer After Interview) \/ Total Number of Offers Extended<\/p>\n A relatively high value for Interview-to-Offer Cycle Time is typically related to a few common factors, including inefficient interview processes (i.e., letting the candidate know what is expected during and after an interview, not providing the candidate with relevant information during the interview process, etc.), long cycle times dedicated to hiring decisions, and sub-par Recruiting & Hiring employee training and performance. Each of these factors can lead to longer interview and offer submission cycle times and increased candidate frustration which can vastly increase the chance that the candidate rejects the offer put forth by the company and instead accept a position in another company. To move towards industry leaders for this Human Resources Department Key Performance Indicator, make sure to provide the interviewed candidates with all relevant information concerning the interview process during the interview itself, and ensure that recruiters and relevant managers use standardized checklists to improve communication between involved staff members while also reducing the overall amount of time needed to accept or reject the candidate.<\/p>\n Other Human Resources Service KPIs for HR Managers:<\/strong>\u00a0Healthcare Expense per Covered Employee, Requisition-to-First Interview Cycle Time<\/a>, Cycle Time: New Hire Training<\/p>\n What is the cost of doing business within the Human Resources Department? Where are my costs the highest? Are there costs that can be lowered or eliminated?<\/p>\n Key Performance Indicator Example for Human Resources Departments # 5: <\/em>Cost per Hire<\/a><\/p>\n HR Key Performance Indicator Definition:<\/strong> The total cost of recruiting and hiring (labor, job postings, travel costs, etc.) for all open positions (front-line or entry-level staff, managers, directors and executives) divided by the total number of positions filled over the same period of time.<\/p>\n HR KPI Calculation:<\/strong>\u00a0Total Recruiting Costs \/ Number of Open\u00a0Positions Filled<\/p>\n Costs related to filling an open position (i.e., bringing in a new employee) include posting the job description on relevant sites (Monster, LinkedIn, or similar), travel expenses (e.g., flying a recruit in to interview), and time taken to interview and orient the potential new hire. For this Human Resources Key Performance Indicator, examine the performance of individual recruiting channels to see what the success rates are, and look to eliminate costs related to low-performing channels. Also, look to promote from within to mitigate recruiting and hiring costs.<\/p>\n Other Human Resources Cost KPIs for HR Managers:<\/strong>\u00a0 Training Expense per Employee<\/a>,\u00a0HR Expense per Employee<\/a><\/p>\n![\"A](\"https:\/\/opsdog.com\/resources\/wp-content\/uploads\/2017\/03\/best-hr-metrics-formulas-pdf-1-e1591642848492.png\")
<\/a><\/p>\n5 HR Metrics Examples and Human Resources Department Key Performance Indicators<\/h1>\n
How to Measure Headcount and Organizational Capacity with HR Metrics<\/h4>\n
How to Measure HR Employee Productivity with HR Metrics<\/h4>\n
![\"Guide](\"https:\/\/opsdog.com\/resources\/wp-content\/uploads\/2019\/05\/180-list-hr-metrics-calculations-e1557764374939.png\")
<\/a><\/p>\nHow to measure HR Employee Work Quality with HR Metrics Examples<\/h4>\n
How to Measure Employee Service Levels with HR Metrics Examples<\/h4>\n
![\"A](\"https:\/\/opsdog.com\/resources\/wp-content\/uploads\/2019\/05\/hr-measurement-and-metrics-e1557764393147.png\")
<\/a><\/h4>\nHow to Measure Operational Cost with HR Metrics Examples<\/h4>\n