HR KPIs - The Problem
When I ask people in HR to talk about achievements, the things that they are proud of and what might make it onto their CV for the future I get replies like:
- Reduced employee turnover
- Improved onboarding experience
- Saved £X amount in costs
But let’s take each of these in turn and look a little closer:
Reduced employee turnover:
It’s a very popular one and sounds great – but is it really my or HR’s achievement? Aren’t there hundreds of variables that contribute to why people leave? How is HR responsible for a change in someone’s domestic circumstances or the fact that an employee may want to take their career in a different direction? Just because it’s a ‘people thing’ doesn’t mean that HR can claim success when the overall turnover number goes down or indeed get the blame when it goes up!
Improved onboarding experience:
Again, something positive but a) it’s very broad and b) is it an activity or a result? Often, people will talk about the stuff they went away and did to improve induction but how do we know the ‘experience’ is now better than it was?
Saved £x in costs:
Very tangible and nothing wrong with this: but ‘£ note’ results are obviously the easiest ones to articulate (even though often difficult to achieve). Money is very tangible which is why so many roles try to define progress in terms of it. Think about the ROI of training, for example, and the exhausting attempts some go to in order to quantify success. Relating results to financials can often be difficult to do in many areas of HR.
So, we need to think smaller when thinking about results and achievements in HR and towards those things we can more directly and tangibly have influence over. The twelve results below are not guaranteed but with skill, knowledge, attitude, a bit of luck and a following wind we could achieve them. All the following examples can also exist as Key Performance Indicators (KPIs) that can be targeted, measured etc for greater focus and success.
- Ratio: CVs passed by HR to hiring managers versus number of them they want to interview
- Number of recruitment offers that haven’t come via use of agencies
- Number of job applications via social media
Induction/Onboarding: Reduction in queries to HR that could have been tackled within induction/onboarding process
Learning & Development/Coaching: Use of a post-learning ‘effectiveness’ rating, for example:
Reaction Quick Survey of participant (24 hours later)
- Was that worth the time spent? (1 point - Not really, 2 – Somewhat, 3-Definitely)
- Have I discovered some techniques and tools that I think will help me (1,2,3 as above)
- Do I think this will help me in my role? (1,2,3 as above)
Implementation Quick Survey of participant (30 days later)
- I have put some of the coaching tools and techniques into place?
(1-Not really, 2 – Somewhat, 3-Definitely)
- I think these have made a positive difference to how I work (1,2,3 as above)
Implementation Quick Survey of participant’s manager (30 days later)
- Have I noticed a positive change in my team member’s behaviour/approach to work/tools and techniques they are using etc? (1-Not really, 2 – Somewhat, 3-Definitely)
Succession: % of key roles where an internal person could be ready to step up to it in six months or less
Absence: Reduction in short and frequent absence rates (‘absenteeism)
Performance: % of workforce considered by management to be ‘not as good as they should be when considering their salary/experience’ (how good is HR at helping managers tackle underperformance in a timely way before it becomes a bigger issue?)
- Satisfaction/engagement/pulse survey answer scores (but only focusing perhaps on those that HR can influence)
- Reduction in ‘preventable’ employee turnover (Where an HR related intervention could have made the difference between them staying or going e.g. a pay policy that is too rigid?)
Efficiency: Reduction in frequently asked day-today questions to HR (can also split into ‘employees questions’ and ‘managers questions’ and the latter can also sit below in ‘quality of people-managers’)
Quality of People-Managers: Number of formal disciplinary warnings/grievances (‘nip it in the bud’ actions or good performance objectives can reduce the likelihood of formal action being necessary)
Traditional ‘macro’ HR metrics will always be used in many organisations: The headline engagement survey score, the employee turnover rate, the average employee appraisal rating; but how much influence over those can HR really have? Sales people won’t last long if they rarely hit the sales target; if headline employee engagement results scores kept falling would my job actually be at risk?
We often measure things in HR because they feel people-related and should be ‘owned’ by us – which is fine. There is, however, a difference between using our expertise to help move the needle on metrics that have hundreds of variables and having a handful of key measures that we can influence and impact in a more significant way.
Your next step? Create a dashboard of ‘micro’ KPIs like the examples above that you can effect change with, that the organisation cares about and that the team can really get motivated to get stuck into!