What Are KPIs in HR? Are These Manageable with HRM Software?

HRM Software

KPIs are the indicators that help in performance evaluations and goal achievements. KPI stands for Key Performance Indicators. The best part of using KPIs is that you can measure these indicators. In human resource management, making use of such KPIs helps in attaining the HR goals quickly and effectively. Onboarding software is a pivotal tool that can significantly contribute to monitoring and improving KPIs in the HR domain. When integrated into HR processes, onboarding software helps streamline the onboarding process for new employees, ensuring they become productive and aligned with organizational goals faster. By utilizing this technology, HR professionals can monitor KPIs related to onboarding efficiency, time-to-productivity, and employee satisfaction during the crucial onboarding period. This data-driven approach facilitated by onboarding software allows HR teams to make informed decisions, refine onboarding strategies, and ultimately enhance overall HR performance in line with key objectives and KPIs

These measurable KPIs help companies in identifying various problems. Some examples are given below for a few KPIs:

Check Time-to-Productivity

This KPI helps to track an employee’s production level after a certain time on the job. If the employee is still not fully productive, it shows an issue in onboarding or training. This is one of the problems in HRM that may need both manual and software assistance.

Evaluate their performances with a Performance Appraisal Completion rate

Here, if the rate is low, it implies that the performance management process needs modification

Employee Engagement Score

This KPI focuses on measuring the employee engagement level and employee satisfaction with respect to their work or even the company.

If the score is higher, it will mean that the employees consider the company to have a positive work culture. It also helps in increasing the retention rate which is valuable for the company.

Based on the insights collected after checking the KPIs and performances, the HR staff becomes able to decide appropriately and strategize accordingly. This is how you can improve your workforce management.

Making sure that the KPIs are reported and records are maintained appropriately is not an easy task. One way to make this process efficient and effective is to use HRM software that has the ability to track the KPIs and whether employees are meeting those on time or not.

No matter what the result, you can manage it by training the employees so they become able to meet these KPIs on their own. If they are already meeting those, track the progress by using the right software or tools at your disposal.

There are many KPIs that companies implement according to their industry and targets. Some KPIs are common, as these KPIs are found in the majority of companies. The reason? These KPIs are essential.

Following are some of the most common KPIs that the world is using and actually finding it useful for their mission and visions:

1. Employee Turnover Rate

This metric measures the percentage of employees who leave the organization within a specified time frame. It is a crucial indicator of workforce stability and retention efforts. By using the right software, the HR staff can analyze the data and see if their retention efforts are useful or not.

2. Time to Fill

This KPI measures the average time it takes to fill a vacant job position. If the Time-to-fill is longer, it shows a different side of the company’s HR decisions. This is because when it takes a longer time to fill any position, it can be understood as the inefficiency in recruitment processes.

So, the problem is identified, now it is time to find solutions.

3. Benefits Utilization

This metric measures how the employees in your company are using their benefits effectively. Some of the benefits may include:

  • healthcare
  • retirement plans
  • other perks offered by the organization.

The online payroll management system helps in fulfilling this KPI remarkably.

4. Cost-per-Hire

This is another of the KPI metrics in HR that is pretty useful. This metric calculates the average cost of hiring a new employee. It includes expenses that are relevant in hiring like:

  • reaching out to the applicants
  • sourcing
  • interviewing the final candidates, and
  • onboarding the final selections

The cost is never a bad thing to know. If you know how much it costs to hire one employee, it means the decision-makers will analyze how the costs can be reduced. By reducing costs, the company can become efficient in the best way possible.

5. Employee Engagement

This KPI has the ability to evaluate employee satisfaction, motivation, and commitment levels. Here, a couple of metrics include engagement survey scores and participation rates.

The higher the employee engagement, the better their satisfaction level and the lower the turnover rate.

This KPI helps in decreasing costs. According to a study on employee engagement, employees who are not engaged can cost companies an additional sum of $3400.

But, why will disengaged employees cost so much?

There can be various reasons, some of which include:

  • Low productivity
  • Low goal achievement
  • Higher absenteeism
  • Greater turnover rates

6. Training and Development Investments

This KPI measures the amount of resources invested in employee training and development programs. This KPI helps in indicating the organization’s commitment to enhancing employee skills.

The keyword here is Relevant.

  • Absenteeism Rate

This metric tracks the percentage of workdays that employees are absent from work. High absenteeism rates may indicate low employee morale or health issues. This can also be seen as a direct indicator of low employee satisfaction.

8. Time-to-Productivity

This KPI measures the time it takes for a new employee to become fully productive in their role. If the time to productivity KPI is smaller then it means effective onboarding and training programs are available in the company.

This is a positive result and shows that the employees are highly satisfied and more engaged.

9. Diversity and Inclusion Metrics

These KPIs assess the organization’s efforts in promoting diversity and inclusion. To understand, check the below example:

  • The representation of different demographics within the workforce and leadership positions
  • Females in leadership positions
  • Black ethnicity in leadership positions

Many companies are using this KPI in HR to make sure that there is no discrimination whatsoever. Companies that are maintaining such KPIs show more diversity among their employees.

This not only helps in promoting the company as a moral and ethical company, but it also helps in developing a culture that others can follow for a better employee engagement level.

10. Performance Appraisal Completion Rate

This metric tracks the percentage of employees who receive timely performance appraisals. These appraisals show the effectiveness of the work the employee was doing.

This may encourage the employees to work harder and, maybe if the company is lucky, smarter.

11. HR-to-Employee Ratio

This KPI measures the number of HR staff members relative to the total number of employees. It can indicate HR department efficiency and its ability to support the workforce.

If the number of employees is too large, then managing them can be a problem. Knowing how to read the outcome based on the stats is how growth is possible.

12. Health and Safety Metrics

These KPIs assess workplace safety, health incidents, and compliance with health and safety regulations.

Using any HR software helps in getting data on all of these KPIs. The software easily provides you with charts of turnover rates, employee attendance, and so on. Basically what it means is that the HR software helps in managing the KPIs and understanding which KPI needs more work and which is doing fine.

Overall Summary

HR software can indeed play a significant role in managing and tracking these HR-related KPIs. Modern HR software solutions offer various features that work wonders for your company for example:

  • data collection
  • analysis
  • visualization
  • reporting

They allow HR professionals to automate various processes like data collection, generating real-time reports, and identifying trends and patterns in HR data. This, in turn, enables companies to monitor their KPIs, measure progress, and make data-driven decisions so that HR strategies are improved.

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