HR key performance indicators (KPIs) help us to understand how our HR practices are contributing to our organizations as a whole and to gauge their impact on profitability. The main questions at hand are:
- How does an HR team go about measuring the success of their HR strategy at year-end?
- How are HR KPIs best reviewed?
- What are some core HR KPI examples?
What to focus on
Whether you’ve closely monitored your HR scorecard all year or just want to pull some helpful statistics retroactively, conducting a thorough annual review of your HR KPIs is just as important as choosing the right metrics to measure.
As you review the past year – or, really, at the close of any business milestone or quarter – take a pause, and use this checklist to make sense of what your HR numbers might be showing you. Doing so will help you draw meaningful conclusions that you can use to improve your people strategy and bottom line in the years ahead.
1. Run year-end HR KPI reports
To conduct your annual review, you must first pull together all the relevant numbers by running final HR KPI reports. How this looks will depend on how specific you were at the beginning of the year about your goals as an organization and the relevant HR KPIs.
Remember, the KPIs that you include in your year-end review should be directly linked to your company’s overall objectives, goals and strategies, such as:
- Strengthening diversity, equity and inclusion (DEI)
- Improving hiring practices
- Increasing employee satisfaction
Ideally, your annual HR scorecard will show the value that your people management efforts have delivered to your organization throughout the year.
Top 10 HR KPI examples
If your HR KPIs weren’t clearly defined at the outset of the year, here’s a useful list. You might be able to retroactively pull some data from your software systems that gives you a picture of the strategic and financial value your HR team provided this year.
For many organizations, the following HR KPI examples can help provide a meaningful picture of HR’s impact:
- Turnover rate
- Average length of tenure
- Internal promotions among protected groups
- Time to fill open positions
- Cost per job applicant
- Number of qualified candidates
- Cost per hire
- Quality of hire
- Employee productivity
- Employee engagement score
Not sure which HR KPIs you should prioritize? For a deeper dive into getting your employees ready to execute on your business strategy and goals, read our article on strategic HR planning.
2. Layer in employee feedback
When reviewing your HR KPIs, it’s also smart to consider other sources of information that show how your people practices are influencing your company’s progress.
Did you conduct a corporate culture, employee satisfaction or employee engagement survey this year? Or did you hold any stay interviews to gather employee opinions?
If so, pull the results back out so you can compare the employee feedback you gathered against your HR KPIs. Do both tell the same story? Or does your employee feedback contradict what the numbers are showing you?
If you’ve been conducting surveys for a number of years, you can even begin benchmarking the results against past results each year.
3. Interview your department heads
Pulling KPIs and employee survey results may be the beginning of your year-end review in HR, but looking at the statistical data should by no means be the end of it.
Once you have the reports and results, you can get more out of the information you’ve collected by wrapping it in live conversations with department heads or other key stakeholders around your organization.
Share the data with them and what you think it yields, and then get their input and experience on a more visceral level. For example, when sharing turnover rate, a department head might tell you about concerns they received leading up to somebody leaving, such as an employee who was struggling with the pay they were receiving.
Here are some questions you can use to guide your conversations with other leaders:
- What have you observed this year as a manager?
- What are the challenges in your department?
- Have you had employees raise any issues or concerns?
Leaders outside of your HR department may easily explain pieces of data that are surprising or confusing from your perspective. Their insights can be invaluable to you as you review HR KPIs and make plans for the following year and beyond.
4. Consider HR’s impact on organizational outcomes
Taking into account not only your HR KPIs, but also employee survey results and insights from your company’s department heads, gives you a more holistic view of the many factors that are driving your HR-related business performance.
Your goal should be to synthesize all of this information to get the best picture of how your HR results are impacting organizational goals. Taking time to understand this comprehensive view of your HR effectiveness allows you to evaluate your people strategies more honestly at year-end.
5. Leverage your HR KPIs to plan for the future
The final piece of your review involves asking important questions and evaluating what trends you see emerging from your HR KPIs, combined with the additional information in your review.
Pull your HR team together and explore:
- What seems to be working?
- What is falling short of our expectations?
- Are any of our HR KPIs moving in the wrong direction?
- What was missing this year that should be added to next year’s strategy?
- What actions should we implement in our strategy based on results from this year?
Remember that some HR KPIs run longer than a year, so you might be looking both backward and forward at the end of a single year.
Measuring HR success
Measuring the success of your HR practices at the end of the year helps you plan for what’s next more strategically. You can bring greater relevance to your raw HR KPIs when you analyze the numbers alongside employee and manager feedback.
Organizations of all sizes can grow faster using measurable, strategic HR practices that get employees aligned with business goals. Find out how HR outsourcing can help – download your copy of our free resource: A step-by-step guide to HR outsourcing.