What are HR KPIs?
HR KPIs are measurable values that help you track HR process performance. Unlike basic HR metrics, they focus on strategic success. An HR metric provides specific information about a process, while an HR KPI helps you assess the effectiveness of the process.
For example, total training hours is a general HR metric that tells you how much time, in total, your staff has spent in training. Training return on investment (ROI) is an HR KPI, as it can demonstrate whether your training is effective.
Compare the lists below to see more examples of HR KPIs vs. basic HR metrics.
- Employee headcount vs. employee turnover rate: Employee headcount provides a current workforce figure. Employee turnover rate helps you understand the stability of your staffing.
- Number of sick days taken vs. absence rate: Sick days taken indicate how many paid time off (PTO) days were used. Absence rate helps you understand absenteeism trends, which can relate to morale and overall team health.
- Total employees promoted vs. internal promotion rate: If you have 100 employees and promote 10, your total employees promoted figure is 10. If you have 1,000 employees and promote 10, the same is true. However, the internal promotion rate is much higher in the first instance, which may highlight the career growth opportunities in your business.
Why HR KPIs matter for business success
HR KPIs demonstrate the impact of HR strategies and processes on business performance. When you combine the right HR KPIs, you can identify trends and insights that help you understand how processes like hiring and training contribute to long-term organizational success.
The right KPIs provide the information you need to:
- Optimize hiring
- Improve employee retention
- Increase performance
- Enhance employee satisfaction
Consider the best KPIs for your business to avoid misalignment. For example, if you focus heavily on reducing your cost per hire without a big-picture understanding of your hiring KPIs, you could sacrifice candidate quality for savings. You might also celebrate a high training completion rate without evaluating performance indicators like training ROI or learner retention, which may not provide an accurate sense of success.
20 HR KPI examples
For each of the HR KPIs below, we provide a definition, how to calculate it and a real-world example of the calculation.
Recruitment KPIs
Recruitment KPIs help you understand the success of hiring processes and your ability to attract talent to meet business needs.
1. Time to fill
Time to fill measures the time it takes to fill an open position. Understanding time to fill can help HR leaders and teams improve hiring processes and workforce planning. When you know the average time to fill for certain roles, recruiters can work on quickly filling an upcoming vacancy.
- Calculating time to fill: Determine the number of days between the job requisition approval date and when a candidate accepts your offer.
- Real-world example: A job requisition is approved on May 1. A candidate accepts an offer for the role on June 12. The time to fill is 42 days.
2. Cost per hire
Cost per hire is how much you spend to hire a new employee. This KPI can help business leaders identify opportunities for cost savings in recruiting and better manage HR budgets.
- Calculating cost per hire: Divide your total recruiting costs for a period by the number of hires in the same period.
- Real-world example: If you spend $78,000 in a year on recruiting and hire 15 employees during that year, your cost per hire is $78,000/15, or $5,200.
3. Offer acceptance rate
Offer acceptance rate is the percentage of job offers accepted by candidates. Your rate can indicate whether your recruitment processes are effective. For example, a high rate may mean recruiters are targeting the right types of candidates. It also helps you understand how attractive your business and job offers are to applicants.
- Calculating offer acceptance rate: Divide the number of offers accepted during a period by the total number of offers made in that period. Then, multiply by 100.
- Real-world example: If you made 20 employment offers in a quarter and 12 candidates accepted, your offer acceptance rate is (12/20) x 100, or 60%.
4. Quality of hire
Quality of hire measures how new employees contribute to your company’s goals. This KPI helps ensure that hiring efforts bring in quality talent.
- Calculating quality of hire: Identify metrics that can evaluate quality of hire. Common options include job performance, employee engagement, team feedback, manager satisfaction and training time. Create a matrix of these to compare quality of hire measurements.
- Real-world example: You might combine employee performance scores, manager satisfaction scores and employee satisfaction scores to calculate your quality of hire score.
Retention and Turnover KPIs
KPIs related to retention and turnover demonstrate the success of your hiring processes and help identify potential turnover trends as early as possible.
5. Employee turnover rate
Employee turnover rate is the percentage of employees who leave over a certain period. Monitoring this rate can help you understand the stability of your workforce and identify potential retention issues.
- Calculating employee turnover rate: Divide the number of employees who left the company for any reason by the average number of employees during the same period. Multiply by 100.
- Real-world example: If 10 employees leave within a year and your average employee headcount during that period was 100, your employee turnover rate is (10/100) x 100, or 10%.
6. Involuntary turnover rate
Involuntary turnover rate is the percentage of workers whose employment was terminated during a specific period. It can help verify the effectiveness of your hiring processes and performance management.
- Calculating involuntary turnover rate: Divide the number of employees terminated during a period by the average number of employees in that period. Multiply by 100.
- Real-world example: If you terminate five employees in a year and your average headcount is 200, your involuntary turnover rate is (5/200) x 100, or 2.5%.
7. 90-day quit rate
Your 90-day quit rate is the percentage of hires who leave within the first 90 days. This metric can help you assess the effectiveness of your hiring and onboarding processes.
- Calculating 90-day quit rate: Divide the number of employees who left within a 90-day period by the number of employees hired in the same period, then multiply by 100.
- Real-world example: If you hire 10 people and two leave within the same 90 days, your 90-day quit rate is (2/10) x 100, or 20%.
8. Internal promotion rate
The internal promotion rate measures the percentage of job openings you fill with internal candidates. This HR KPI provides insight into the effectiveness of your hiring, training and coaching processes and helps you understand trends in internal career growth.
- Calculating internal promotion rate: Divide the number of internal promotions by the total hires for the same period, then multiply by 100.
- Real-world example: If you fill 40 positions in a year and 10 of them are internal promotions, your internal promotion rate is (10/40) x 100, or 25%.
Engagement and satisfaction KPIs
Engagement and satisfaction KPIs help you track employee morale and identify opportunities for improvement in employee engagement and success.
9. Employee engagement index
Your employee engagement index measures employee motivation and how connected workers feel to their jobs and your business mission.
- Calculating employee engagement index: Conduct an employee engagement survey, and calculate the average score. Divide the average score by the total possible score and multiply by 100.
- Real-world example: You conduct an annual employee engagement survey. If the average score is 4 out of 5, your employee engagement index is 80%.
10. Employee Net Promoter Score (eNPS)
In an HR context, Employee Net Promoter Score (eNPS) measures the likelihood that existing employees would encourage someone to apply for a job with your company. Your eNPS can indicate employee satisfaction and the strength of your employer brand.
- Calculating eNPS: Ask employees to rate their likelihood of recommending your business as a place to work. Using a scale from zero to 10, where zero is least likely and 10 is most likely, categorize employees by their responses: 0-6 are detractors, 7-8 are neutral and 9-10 are promoters. Subtract the percentage of detractors from the percentage of promoters to get your NPS.
- Real-world example: If 60% of employees are promoters, 15% are neutral and 25% are detractors, your NPS is 60% – 25%, or 35.
11. Benefits satisfaction
Benefits satisfaction helps measure whether employees are content with your benefits packages. Tracking this KPI allows you to determine if your company offers effective benefits and competitive compensation packages.
- Calculating benefits satisfaction: Conduct an employee survey about benefits. Ask employees to rate various benefits or provide an overall rating of their satisfaction with the benefits.
- Real-world example: You might ask employees to rate each type of benefit on a scale from one to five. The average ratings are 3 for health insurance, 4.5 for retirement plans and 2 for paid time off. Your overall average benefits satisfaction would be 3.2, or 64%.
12. Employee satisfaction index
The employee satisfaction index is a rating of overall worker well-being. This KPI measures the effectiveness of team culture and the general morale of your staff.
- Calculating employee satisfaction index: After receiving employees’ completed satisfaction surveys, average the scores, divide the average by the total possible score and multiply by 100 to convert it to a percentage for your index.
- Real-world example: You might ask employees to rate, on a five-point scale, how much they enjoy their job, whether they’re happy with leadership or how likely they are to stay with the company for five years or more. Average the answers across all responses and questions. If the average is 4.2 out of 5, your employee satisfaction index is 84%.
Productivity and performance KPIs
Productivity and performance HR KPIs provide a broad look at how successful human resource processes are in supporting business activities.
13. Employee productivity rate
The employee productivity rate measures worker output over a specific period. By looking at productivity trends, you can identify potential staffing challenges and understand how HR and other business activities support successful teams.
However, the raw output of a calculated productivity rate may not reflect quality or impact. Instead of focusing on a single productivity rate, consider approaching this metric with a more holistic view of employee performance, such as a balance between qualitative feedback and outcomes-based evaluation.
- Calculating employee productivity rate: Divide total output by total hours worked to determine the productivity rate per hour. You can adjust this metric to account for productivity per day, week, month or quarter, as well as team or individual productivity.
- Real-world example: If an accounting clerk processes 10 invoices in two hours, the productivity rate is five units per hour. If the entire accounting department processes 100 invoices in a five-day workweek, the productivity rate would be 20 invoices per day.
14. Manager effectiveness index
A manager effectiveness index helps you analyze supervisors’ success in coaching, leading and motivating their teams.
- Calculating manager effectiveness index: You can combine related scores, such as employee engagement metrics, team performance indicators and employee feedback to determine the manager effectiveness index. You can also conduct employee surveys and average the responses to management-related questions.
- Real-world example: If you ask employees to respond to questions about leadership on a scale from one to five and the average answer is 2.5, your manager effectiveness index is 2.5/5, or 50%.
15. Absence rate
The absence rate measures the percentage of time employees are absent compared to the workdays available to them. Understanding per-worker absence rates may encourage you to offer support to employees if needed, such as flexible work arrangements or workload support to avoid task buildup.
Looking at absence rates for an entire team, department or business can help you identify trends related to organizational culture or scheduling issues. While it’s best to address absences, some may be needed to reflect a healthy work-life balance, such as those taken for sick leave, caregiving or mental health days.
- Calculating absence rate: Divide the total absences by the total workdays available. Multiply by 100. Total work days available refer to how many days the employee was scheduled, which may differ from how many days your business was open.
- Real-world example: If a worker is scheduled for 22 days in the month and misses four, the absence rate is 4/22, or 18%.
16. Absence cost
Absence cost tracks the financial impact of absenteeism. Understanding this figure may help you budget for necessary absences and determine whether absenteeism affects profits.
- Calculating absence cost: Determine the cost per hour of each absence. This includes a worker’s hourly rate, including their wages and benefits, even when they aren’t working. You should also consider the cost of lost productivity and coverage for the absent employee. Multiply that total cost per hour by the number of hours someone was absent.
- Real-world example: If compensation, including benefits and wages, is $25 per hour and it costs $37.50 in overtime per hour for someone else to cover the absent worker, the absence cost is $62.50 per hour. If the worker is absent for three eight-hour shifts, the total absence cost is $62.50 x 24, or $1,500.
Training and development KPIs
Training and development KPIs measure the success of your company’s training programs, coaching and other upskilling efforts.
17. Training ROI
Training ROI measures the impact of training on revenue generation. It helps you determine whether your investment in worker training is resulting in financial gain.
- Calculating training ROI: Subtract training costs from the revenue gained from training. Divide that number by the training costs and multiply by 100.
- Real-world example: If you invest $5,000 in sales training that leads to an increase of $15,000 in sales, the training ROI would be ($15,000 – $5,000)/$5,000, or 2. Multiply by 100 to convert it to a percentage, and you get an ROI of 200%.
18. Time to proficiency
Time to proficiency measures how long it takes from a new hire’s start date to when they become proficient in their position. This KPI helps you analyze whether you’re recruiting and hiring the right fit and how effective your onboarding and training processes are.
- Calculating time to proficiency: First, define what proficiency means for each position. Then, measure how much time it takes for employees to reach that milestone.
- Real-world example: For a sales rep role, you might define proficiency as consistently meeting daily minimum sales quotas. If a sales rep is hired on September 1 and starts reaching the goal on January 1, the time to proficiency is four months.
19. Learning engagement rate
The learning engagement rate tells you what percentage of employees actively engage with the training you provide. This KPI helps you evaluate the interest employees have in training and whether communication about mandatory training is effective.
- Calculating learning engagement rate: Divide the number of workers actively engaged in training by the total number of employees assigned training. Multiply by 100.
- Real-world example: You send a notice that annual compliance training is available online and request that employees complete the training within the week. If 68 of 200 employees are taking the training, your learning engagement rate is (68/200) x 100, or 34%.
20. Training completion rate
The training completion rate is the percentage of workers who have completed assigned training. This KPI helps you understand whether employees are interested in training and identify potential issues with the training processes.
- Calculating training completion rate: Divide the number of employees who have completed training by the number of employees who enrolled in or started training. Multiply by 100.
- Real-world example: If 30 people start training on a new software program and 10 people complete it, your training completion rate is (10/30) x 100, or around 33%.
How to track and optimize HR KPIs
To effectively monitor HR KPIs, you need the right data tools and consistent processes for capturing and reviewing information.
Common data sources for HR KPIs include applicant tracking software (ATS), recruitment and training records, payroll data, workforce scheduling software and HR analytics systems. You might use HR dashboards designed to provide data in a visual format, making it easy for leadership to understand critical metrics in real time.
Other best practices in tracking and using HR KPIs may include:
- Segment data: As you analyze HR KPIs, review data at different levels to uncover trends and areas for improvement. You might segment data by department, team, location, time period or employee groups.
- Link KPIs with performance reviews: Consider employee performance within the context of overall KPIs for data-driven goal setting. For instance, if learner engagement and training completion are low, you might make training a part of employee goals for the upcoming year.
- Seek continuous improvement: Schedule KPI check-ins monthly or quarterly. Assess current KPIs and progress made in the past month or quarter. Consider where improvements can be made and set goals for future KPIs.
- Set realistic goals: If you don’t meet your target with an HR KPI, consider whether your goal is realistic. Talk to your team about why that goal seems elusive, and decide whether you should set a new goal or make changes and continue working toward the old one. Your KPIs should also align with specific, measurable, achievable, relevant and time-bound (SMART) goals.
- Replace outdated or inefficient KPIs: As your business grows and your priorities shift, KPIs that were once meaningful may not be as useful. For example, the KPIs that help you grow from a small business to a mid-size corporation are likely different from those that help you contain costs and support a consistent brand to protect your mid-size company.
Use HR KPIs to align your HR strategy and business goals
HR KPIs are critical measurements that can help you understand the impact of HR processes on your business. By consistently reviewing relevant HR KPIs and acting on them, you can increase your business’s chances of long-term success.
These metrics may also demonstrate aspects of your work environment and company culture. By making adjustments based on these KPIs, you may also enhance employee well-being and retention rates.