KPI for HR: How, When and Where?

Key Performance Indicators (KPI) also known as KSIs which stand for Key Success Indicators are not specifically linked only to HRD, but has to do with the entire organization. Since HR is the heart of any organization usually HR is assists other department also to set and identified their KPIs, which are measurable and quantifiable in nature so as to measure the success of the organization in terms of the organization's mission and goals. Hence KPIs can be defined as measurements for an organization's success.

For example, HR Department could have Employee Turnover as one of its KPIs. The goal for setting this KPI would be to reduce employee turnover. It could be defined numerically for better definition such as to reduce employee turnover by 5% every year. This KPI could be defined as the total of the number of employees separated from the organization for reasons of resignation or termination divided by the number of employees at the beginning of the year. It could be measured on a fixed time schedule like every month or every quarter. For HR Department other KPIs can be following: Recruitment KPI, Training KPI, Health and Safety KPI, Performance KPI, HR Efficiency KPI, Working Time KPI, Compensation KPI, Labor Relation KPI, Employee Satisfaction KPI, Employee Loyalty KPI, HR Budget and Accounting KPI etc.

Sample Explanation:

Frequently used HR KPIs include:

FTE = Full Time Employees

Revenue per Employee (FTE) 

Assets per FTE 

Training Hours per FTE 

Training Costs per FTE 

HR Department Cost per FTE 

FTEs per HR Department FTE

Acceptance Rate 

Average Cost per Hire 

Absence Rate

Turnover Rate

Resignation Rate 

Human Investment Ratio 

Compensation & Benefits/Revenue 

Average Remuneration

Time taken per recruitment

Cost per recruitment

The choice of HR KPI will vary from year to year, subject to organization’s strategic planning, corporate strategies and objectives which in turn affect HR’s strategic planning, HRM strategies and objectives. Bellow, I am providing only one KPI’s in details here. If anyone needs the details of other metrics, please do email me.

Training KPIs include key performance indicators as follows:

1. Training courses

• Number of courses offered

• Number of courses implemented.

2. Training costing

• Organization training expenditure (% of salaries and wages)

3. Training certificates

• Number of employees completing sponsored education programs

4. Training hours

• Average number of training hours per employee

5. Training budget

• % of HR budget spent on training

• Average training costs per employee

6. Training satisfaction

• Employee satisfaction with training.

7. Training results

• % of employees gone through training

• Average time to competence. That is average time it takes until expected competence level is reached.

• % & employee reach competence after training.

8. Training penetration rate

It measures the percentage of employees completing a course compared to total number of employees employed.

9. E-learning training

• e-learning courses utilized

• % of e-learning pass rate

And indeed e-HRM is the key tool to measure all the metrics successfully with 0% error.

© Shaki, Ahmed R (2012), Candidate of PhD in HRM, UUM