Data analysis is essential for human resources professionals. It allows them to extract valuable information, both on the environment and on the performance of the company and its employees.
But what exactly are KPIs? KPIs (Key Performance Indicators) are data, most often numerical, that can be used to evaluate the results of an action or a situation over a given period.
Used in many fields, KPIs can make a significant contribution to the company’s human resources policy. As an HR manager, you may be wondering which indicators to track when carrying out your role. Here are 15 essential KPIs for the HR function.
HR indicators: KPIs for recruitment
When it comes to recruitment, KPI analysis can help you improve your strategy and considerably reduce the time spent on this frequently time-consuming task.
1. Average time to hire
Definition: This is the average number of days between publishing a job advertisement and actually hiring the new recruit. Depending on the position and the number of candidates, the average time to hire can vary. In general, and even more so if your company often recruits new employees, the average time to hire can be a useful indicator to track.
Calculation: Average time to hire = total number of recruitment days in a 12-month period / 12
Use: The longer the time to hire, the greater the risk of candidates dropping out during the process.
2. Offer acceptance rate
Definition: The offer acceptance rate corresponds to the number of offers accepted by candidates compared to the number of offers made.
Use: If the offer acceptance rate is low, it may be because the salaries offered are below the market rate, because the company is not perceived as attractive, the working conditions do not correspond to candidates’ expectations, or because the recruiters are poorly prepared for their interviews.
3. Distribution of hires by gender and age
Definition: This is the number of people hired classified by gender or age group in relation to the total number of hires.
Use: This indicator provides demographic data on your employees and a better understanding of your company’s social climate, for example. This data allows you to identify profile imbalances among your employees and to adjust your recruitment policy if necessary.
Career management performance indicators
These KPIs can be used to anticipate changes in skills and internal or external movements of employees.
4. Internal mobility
Definition: This KPI provides information on the number of positions filled in the company through internal recruitment. It can include the number of employees who have been offered a move.
Use: Internal recruitment considerably reduces costs and hiring time. It also reduces risk while building employee loyalty. The higher this KPI, the more it shows that the company values its internal talent and allows them to evolve.
5. Training
Definition: There are actually several indicators related to training – percentage of employees trained, number of hours of training granted for each employee, success rate, etc. It’s up to you to identify the indicators that seem most relevant to your HR policy.
Use: If the percentage of employees trained is low, for example, it may be worthwhile investigating the causes (budgets, turnover, etc.)
6. Internal promotion
Definition: This is the percentage of employees who have been promoted.
Use: This KPI can be used to evaluate the effectiveness or otherwise of employee skill development within the company. It can explain the level of employee retention, for example. If the indicator is high, it may help convince potential candidates and attract talent.
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Social management HR indicators
These KPIs are particularly relevant to the socio-economic management of the company. They help guide HR managers in establishing specific policies.
7. Age pyramid
Definition: This is the distribution of the number of employees by age group.
Use: This indicator provides an overall view of the sociology of employees and, in particular, helps companies to anticipate retirements and the need to train younger employees.
8. Gender ratio
Definition: The gender ratio shows the percentage of male and female employees out of the total number of employees.
Use: This KPI can explain, for example, the number of part-time employees, the amount of leave taken, the mood in the company, etc. It can be used to adapt HR policies to employee needs and to ensure that parity is respected at all hierarchical levels.
9. Percentage of workers with disabilities
Definition: In the UK, any employer with 15 employees or more may not treat a disabled person less favourably than someone else because of their disability.
Use: Companies can use this indicator to ensure that they are complying with the legislation on the employment of workers with disabilities.
KPIs to measure the company’s financial health
10. Sales per employee
Definition: Sales per employee shows the profits generated within the company by each employee.
Use: Sales per employee allows the company to evaluate the profitability of an average employee. Among other things, this helps it to determine whether or not the company can increase employee remuneration.
11. Employee productivity rate
Definition: The employee productivity rate is calculated by dividing production by the number of employees.
Use: This KPI must be correlated with other indicators such as absenteeism and turnover in order to detect potential production problems and to initiate actions to strengthen the company’s profitability.
12. Turnover
Definition: This KPI indicates the turnover rate or the average length of employees’ careers within the company.
Calculation: Turnover = (number of departures over 12 months / average number of employees in the company) x100
Use: Of great interest to HR managers, the turnover rate is a very good indicator of employee retention and helps explain, for example, the time spent recruiting external employees and the acceptance rate of offers. In general, it is important for this indicator to be as low as possible to limit the costs of recruiting and training new employees.
Engagement and fulfillment indicators
13. Employee Net Promoter Score (eNPS)
Definition: This KPI refers to the degree of employee satisfaction within the company. In general, it is measured by the answer to the following question, “How likely are you to recommend our company to friends or colleagues as a place to work?”
The employee must give an answer on a scale of 0 to 10. The score given is then used to distinguish three categories of employees: detractors, passives, or promoters.
Calculation: eNPS = (number of promoters – number of detractors) / total respondents. This gives the Employee Net Promoter Score (eNPS), which indicates the overall degree of employee satisfaction within your company.
Use: This indicator reveals the company’s image among its employees, and the extent to which its employees can help or hinder it in its recruitment policy.
14. Employee satisfaction
Definition: Unlike eNPS, the employee satisfaction indicator is based on a large number of questions.
Use: This indicator allows us to measure the general level of employee satisfaction with the company and to make the link with customer experience.
Definition: Highly scrutinized by employers, absenteeism can take a heavy toll on a company’s productivity as well as on the mood at work.
Calculation: Absenteeism rate = (Number of days absent / Number of working days) x 100
Use: Identifying the reasons for high absenteeism and implementing actions to limit it.
HR digitalization to facilitate data analysis
Many software applications exist to monitor HR performance indicators. They facilitate data analysis, optimize processes, and improve employee experience.
Within this digitalization, leave management is often overlooked and is rarely considered a priority. However, there are many advantages to digitalizing this time-consuming and complex process. Using a dedicated tool makes it possible to monitor certain KPIs such as absenteeism.
Keeple is a tool dedicated to managing employees’ paid leave. Both simple and ergonomic, it allows employees to monitor their paid leave balance in real time and managers to efficiently manage requests according to team needs. Keeple also offers various strategic KPIs that can be monitored via a dashboard.
