Top HR KPIs to Track in 2024
The workforce of a company keeps on changing and evolving with time. As the needs of employees change, so does the role of HR departments in companies. To keep up with the changing trends and address their employees’ needs, organizations need to track certain key performance indicators.
You can use a variety of metrics to evaluate the effectiveness of an organization’s workforce, but it’s essential to focus on the KPIs that have the most significant impact on organizational success. By tracking such key metrics, companies can ensure that their employees are productive and meet the needs of their customers.
In this blog post, we will take a look at HR KPIs and the top human resources KPIs that every organization must track in 2024 to ensure their success. To learn more via video, watch below. Otherwise, skip ahead to continue reading.
What are Human Resource KPIs?
Human resource KPIs are the metrics that are used to measure the performance of an organization’s workforce. The KPIs include a wide range of criteria, such as retention rate, employee morale, and customer satisfaction. The human resources department uses these metrics to determine the effectiveness of its workforce management strategy.
Top 16 Best HR KPIs 2024
Following is a list of some of the most important HR KPIs your business must track in 2024:
1. Employee Retention
Employee retention is one of the most crucial HR KPIs. A high employee retention rate means that employees are happy with their job and are not planning to leave the company. On the other hand, a low employee retention rate indicates that employees are not satisfied with their roles and might leave the company after some time.
Skilled staff is hard to find and even harder to keep. Losing skilled employees is costly for the organization. By tracking employee retention rates, organizations can identify problem areas and take corrective action before employees leave.
You can measure this key performance indicator by tracking various HR metrics. You can use talent management programs to identify the best HR metrics to measure employee retention.
2. Employee Satisfaction
Employee satisfaction is another key metric that HR departments should track. Employee satisfaction indicates how much employees enjoy their job and how motivated to perform well. Most of the time, employees don’t leave their jobs because they are unhappy with their salary or the work they are doing, but because they are not satisfied with the company culture.
It is calculated by conducting employee satisfaction surveys. For carrying out such surveys, you need to formulate questions that are relevant to your employees. The questions should focus on the company’s work culture, their happiness with their role in the organization, and whether they feel valued and respected at their workplace. You can also conduct employee satisfaction surveys by utilizing software such as Qualtrics or SurveyMonkey to measure employee satisfaction. They make it easy to create surveys, collect data, and analyze the results.
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3. Time to Hire
The time to hire is the time it takes for a company to fill an open position. You can track this metric by recording the number of days it took to fill an open position. By monitoring this metric, organizations can determine how efficient their recruitment process is and identify areas that need improvement.
If the hiring manager takes too long to find candidates, there is a problem with your job description, or you are looking for the wrong skill set. You can measure this HR KPI by analyzing the previous data you have collected during the past recruitment process. You can also use software such as Greenhouse or Workday to track the time to hire metric. Such software can also help you reduce the time it takes for your company to hire new employees.
4. Recruitment Costs
Recruitment costs are another vital HR KPI that you need to track to reduce the cost of hiring new employees. It tells you how much money your company spends on finding and recruiting new employees.
Recruitment is a costly process, and you need to keep track of the expenses to optimize them over time. You can track this metric by dividing the total money spent on recruitment by the total number of employees hired.
You can measure the hiring costs by taking into account the money spent on advertisement, agency fees, interviewing costs and other related expenses. Hiring costs also include the amount spent on onboarding the new employee. It will give you an idea about how much your company is spending on recruiting new employees. If the recruitment costs are too high, you need to make some changes in your recruiting process and bring down these expenses.
5. Absenteeism Rate
The absenteeism rate is the number of days employees are absent from work. By tracking this metric, you can identify whether your HR managers are allowing their team members to take too much time off or if there is an issue with workers morale. If your employees are absent from work more than they should be, it is a sign that something is wrong. There must be some valid reason of their absence from work, but it affects your organization. Your company might miss out on important deadlines or projects if many employees are absent from work.
HR managers need to create a policy to track this HR KPI and communicate it to the employees. They need to manage the attendance and absence of their employees. They can create categories of various reasons for absence, such as vacation, sick leave, maternity leave, etc. They can also create certain rules regarding the number of days employees are allowed to take off from work each year.
You can also use attendance management software such as Comply Advantage to track this key performance indicator. Such software is easy to set up, and it can help you reduce the absenteeism rate of your employees.
6. Employee Turnover Rate
Employee turnover is another important HR KPI that you should track. It indicates how many employees are leaving your company voluntarily or involuntarily. It also focuses on the reasons for their departure. If the rate of turnover is high, then there is a problem with your HR team or your company’s working environment. You need to focus on improving those areas if employee retention is an issue for your company.
The HR department has to create strategies to keep the employee turnover rate as low as possible. A high turnover rate can become expensive for the company and lead to a decline in the quality of work. Your HR team also has to spend time to find a new hire for the position vacated by the departing employees.
You can track the employee turnover rate by recording the number of employees who left the company in a given period. Then, divide the number of employees left by the average number of employees who remained within your company to calculate the rate.
7. Employee Productivity
Employee productivity is another key performance indicator that HR managers need to track. It measures how much work an employee can produce in a given period. If your employees are not productive, it will affect the company’s bottom line. You need to find out why they are not productive and try to address the issue.
It is one of the crucial key performance indicators that your HR managers must monitor. They should create a policy for their team members and help them improve productivity without sacrificing the quality of output.
HR managers can track employee productivity rate by looking at the number of hours an employee has worked and how much work they have produced. They can also use software such as Asana or Teramind to monitor the employee’s computer activity. By tracking various activities of employees, you can identify which employees are productive and which ones need more guidance.
8. Training Effectiveness
Training programs are an essential component of an organization. They help employees to learn new skills and improve their productivity. However, not all training programs are effective. You need to track the effectiveness of your training programs to see if they are yielding the desired results. Training costs are also high. You need to make sure that it is worth the investment.
The HR department should also track the training effectiveness of their employees. If the training programs are not effective, then your HR team needs to find out why it’s not working. They can also try different training methods to see which one is more effective for their employees. They can negotiate better deals with service providers or find new vendors who can offer more cost-effective solutions.
The HR professionals can track the training effectiveness by assessing the number of employees who have completed the training program and how much they learned from it. They can also use surveys to get feedback from their employees and see if they are satisfied with the training programs that your company is providing.
9. Benefits Administration
Offering benefits and perks to employees is a common practice in today’s workplace. However, not all companies provide the same benefits packages to their employees. You need to track the benefits that your company is providing to see if they are meeting the needs of your employees. If your employees are not satisfied with their benefits, then it can have a negative impact on employee retention and recruitment.
Managing benefits can become a time-consuming process for the human resource department. You need to understand your employees’ needs and find the right benefits package that meets their requirements. You can utilize the information you have gathered from your employees by formulating better business deals.
You can track benefits administration by employing self-service portals. They allow the employees to check their benefits anytime they want. You can also use software like Zenefits to manage your employee’s health insurance, retirement plans and other benefits.
10. Overtime Hours
Overtime hours show the time employees spend beyond their contracted working hours or when they are working on weekends. Though employees might like to work overtime, it can affect their health and wellbeing. It can also reduce their productivity and affect their performance. Overtime hours also affect the company’s bottom line. You need to find ways to reduce or eliminate overtime hours.
Overtime hours are a crucial HR KPI to track if your staff is working on night shifts or weekends or if you have a large number of employees working overtime. You can track overtime hours by looking at the number of hours employees have worked beyond their contracted hours. You can also use time tracking software to monitor the number of time employees spend on their computers.
11. Employee Engagement
Engaging employees with their jobs is an important part of managing a company. A manager should recognize when employees are feeling unmotivated or dissatisfied with their jobs, and take the proper steps to rectify the situation.
Employee engagement is one of the most important HR KPIs to track. A high level of employee engagement can lead to better performance, lower turnover rates and reduced absenteeism. Sometimes, measuring employee satisfaction is not enough to assess engagement levels. You need to determine how engaged employees are with their work and what percentage of them should stay in your company for more time.
You can track employee engagement by surveying your employees on a regular basis. Moreover, you can also use software like Poll Everywhere to conduct anonymous polls and surveys for your employees.
12. Employee Net Promoter Score (NPS)
A company’s employees are the ambassadors of the organization. They meet with customers daily and also represent your company to other stakeholders like business partners, vendors, etc. They can play a significant role in promoting your company. You can measure the loyalty of your employees towards your company by tracking their net promoter score (NPS).
The employee NPS is a metric that measures the likelihood of employees to recommend their company to others. It also indicates how employees feel about their company. A high employee NPS score is an indicator of strong company culture. It also enables the HR professionals to see whether employees enjoy working in your company or not.
You can track the employee NPS by surveying your employees and asking various questions about their company. You can measure this KPI by subtracting the percentage of employees who will recommend your company to others from the percentage of those who will not do so. This metric can help you improve your company culture and make it more attractive to potential employees.
13. 90-Day Failure Rate
A high failure rate is an indicator of how many employees are leaving the company in their first three months. It indicates that there is something wrong with the recruiting process or that your company culture is not working for new employees. You can also look at why they are quitting their job. It will help you find out what you need to improve.
You can track the 90-day failure rate by looking at the number of people who have quit in their first three months and dividing it with total recruitment numbers. This key performance indicator can help organizations reduce the number of people quitting in their first three months by improving their onboarding process and making changes to their company culture.
14. Training Costs Per Employee
Training costs per employee is a vital HR KPI to track if you are planning to improve the performance of your employees. This HR strategy can tell you how much you are spending on employee training and whether the investment is paying off. It also tells you how much your company is spending on onboarding new employees, upgrading their skills, making them more productive and increasing their performance.
You can track this metric by dividing the total amount of money spent on employee training by the total number of employees. This HR KPI can help you decide whether to invest more money in employee training or not. It can also help you assess the effectiveness of your employee training program and determine whether it is achieving its desired outcome or not. If the training cost per employee is too high, but the performance of your employees is not improving, then you need to make some changes.
15. Diversity Metrics
Diversity metrics help HR professionals assess your organization’s diversity towards various practices. They analyze workforce demographics and use this information to identify the diversity gaps and take necessary actions to improve the situation.
The diversity rate tacks a company’s progress towards creating a more diverse and inclusive workplace. Measuring the diversity rate is a complicated pursuit, but it’s essential to do so. You can track this by looking at the number of women in management, percentage of employees from different ethnic backgrounds and other related metrics. You can also use software like Workable to track diversity metrics in your company and make it easier to monitor the progress over time. It also helps identify areas where the company can improve.
16. Workplace Accidents
Workplace accidents are one of the biggest HR nightmares that can happen in your company. Workplace accidents are one of the major reasons for employee absenteeism, leading to high costs, low productivity, and other problems.
You can track this metric by looking at the number of workplace accidents over a given time. It tells you how safe or unsafe is your workplace for employees. It also helps determine whether there’s room for improvement. If yes, then what kind of safety measures you must take? How can you prevent workplace accidents? You need to track this metric on a regular basis to identify areas where improvements are required.
Conclusion
Above we have provided a list of the best HR KPIs (2024) that you look upon to see what areas your organization needs to focus on to improve the work environment quality and build business brand.
HR KPIs play a huge role in allowing you to measure business performance. Thus, analysis of these KPIs can help you track the overall performance, and employee productivity over years.
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