If you want to know how well your business is doing, you need to be able to measure the results of your work. And to measure success, you need to understand performance indicators. However, Human Resources' Key Performance Indicators (KPI) are not as straightforward to gauge as company-wide KPIs, such as overall business growth or revenue.
A KPI measures specific areas of your business using quantifiable metrics. When you continually measure these metrics, you can determine whether your practices are making a positive impact on your company's profitability. Simply put, your KPI provides you with an awareness of your progress towards your company's goals.
The KPIs that you choose need to be directly related to your company's overall goals, objectives, and strategies. Some example KPIs include:
Human Resource's controlling KPIs is the metric used to figure out how Human Resources is contributing to the rest of the organization. However, deciding on the best controlling HR KPI for an organization depends on a few different factors, including how the company's goals are structured.
Before you can figure out your Human Resource's controlling KPI, you need first to figure out your company's most important KPI. Once you know company's overall goals, you can set a controlling KPI which reflects them. To see how this plays out in real business examples, consider the following:
If it is your company's priority to cut costs, then a controlling KPI could be "cost per hire."
One of the company's main objectives is to hire the best talent in the market. However, recruiting does not come cheap. Companies have real concerns regarding hiring costs, which include expenses such as agency fees, relocation costs, in-house recruiter compensation, and sourcing costs. Therefore, if your company wants to cut its overall costs, setting your controlling KPI as "cost per hire" aligns you with the company’s overall goals.
If it is your company's priority to focus on growth, then "benefits satisfaction" and "employee engagement" are more relevant as controlling KPIs.
All companies want their business to grow. However, to achieve this objective, you need to increase your customer base but their loyalty as well. And the best way to accomplish this goal is to focus your controlling KPI on employee engagement. Why? Because most research shows, there is a direct correlation between the satisfaction of customers and engaged employees. Those employees that go that extra mile to help solve clients' issues or concerns ultimately end up achieving the business outcomes that organizations want.
It is essential to understand that every company is different. That is why even though Human Resources may have a controlling KPI, it does not mean you cannot have additional KPIs. Rather, it just means that these other KPIs must align with this controlling KPI so that a good performance in one leads to good performance in the other. Most importantly, your HR’s controlling KPI must align with the business’ overall priorities.
Acting as the Chief Operations Officer, Brandon actively promotes an environment of creativity, collaboration, and individual ownership to empower Questco team members to deliver exceptional client experiences.