CU Employee Community Chair

Top KPIs for Human Resource Management

“Human resources are like natural resources, they are often buried deep, you have to go looking for them, they are not just lying on the surface, you have to create circumstances where they show themselves”

Ken Robinson

Your employees are the most valuable resource for your institution. Talented and experienced employees are hard to come by and even harder to keep. It is very important to ensure that they have sufficient opportunities to grow and develop in their jobs and are continuously evolving as individuals. It is also extremely crucial to keep them engaged and connected to the organization. Hence, the human resource department has the responsibility of ensuring that the institution is composed of motivated, satisfied and employees who are fulfilled in their jobs.

A lot of factors influence why an employee chooses to stay - some of the major factors include working hours, salary, health benefits, and company culture. A business is successful only if the employees are driving the business in an efficient manner. Some challenges that employers face in human resources are as follows-

  • 83% of employers feel that attracting and retaining talent is a growing challenge ( Allegis group)
  • In Kronos, 46% of employers say that employee burnout is a major reason for workforce turnover.
  • According to the millennial branding survey, the top reason why millennials leave their jobs is because they received a better job offer from another company ( 30%) , their career objectives are not aligned with that of the company ( 27%) and they feel there are lack of career opportunities in front of them ( 13%) .

Human resource managers or employers, in general, need to have measurable indicators which will help them to determine and track the progress in specific objectives. Here are the top KPIs for human resource management, briefly explained.

1. % Hire from Referral Programme

An indicator used to track the number of employees hired in the institution through existing employees referring the job to the qualified friends and relatives. The existing employees know the best about the talent that is needed for the job, and word of mouth helps to spread the message of recruitment directly to the right people, without spending any extra resources like time and money on recruitments. This technique is beneficial not only for the management but also the existing employees who feel more engaged and accountable when they are involved in processes like these. The more the percentage of hires from referral programmes the more efficiently can the resources be spent on other departments and it is also an indicator of a good culture.

2. Leadership Index

It is a method of measuring leadership within an organization. It is an evaluation of leaders in an institution through the skills, attitudes, and behaviors that are needed within an organization. The employees are required to take a survey anonymously and answer questions with respect to the leader. Based on the result, the leader can take feedback and continue to develop his skills. The attitudes, skills, behaviors are not the same for every institution, hence the institution first needs to consider which characteristics need to be assessed under the leadership index.

3. Training investment per Employee

The amount of cost being invested in training and development of employees should always be closely monitored. If the amount being spent is too less it might indicate that the there is difficulty in developing talent internally within the institution and hence the employees often fulfill these needs externally, which is often considered as a threat. Training investment is also the amount that is spent on onboarding of the new recruits. A well-planned training can boost retention. It increases employee value and operational efficiency since they become more efficient in doing their job. It should be ensured frequently that the training investment is not more than the revenue being generated from operations.

4. Employee Satisfaction Index

The indicator is used to measure how satisfied the employees are with their current jobs. It is used to analyze as much information as possible that can be gathered about employees through the survey. The surveys usually revolve around the following three questions:

  1. The score of satisfaction with the current workplace.
  2. Score at which the expectation meets the reality of the workplace.
  3. Score at which the current workplace is close to the ideal one.

These scores are usually given ranging from between 1-10, where 1 is the lowest value and 10 indicates the highest. Institutions usually prefer more extended surveys so that they can have more information. The survey can be done every quarter and the results of an employee can be compared to observe if there has been any improvement.

5. Time/Money Saved from Using HR/IT Technologies

The amount of time and money being saved from using IT technologies indicates whether or not an institution is investing in the right technology. Technology offers a transformational platform when it comes to doing operations efficiently and quickly, but it also involves a lot of extra costs going into maintenance. The more the time and money saved from using technology indicates a better efficiency and investment from the institution. Technology should be more focused on improving operations and reducing the workload of employees and offering them a platform where resources can be managed easily. If IT is not fulfilling this description, then the investment needs to be looked into and better solutions need to be implemented.

6. Net Promoter Score (NPS)

Employee net promoter score is a comprehensive way to measure the loyalty of employees. It allows employers to know whether the employees are willing to become brand ambassadors of their institution. The survey divides the employees into three categories- detractors, passives, and promoters. The score can be given between 1-10, where 1-6 indicate s a detractor(will not promote), 7-8 indicates a passive(neutral), 9-10 indicates a promoter. The survey should be taken as frequently as possible, in order to make the most out of the process.

7. Turnover Rate

          The employee turnover rate indicates the number of employees leaving an institution in a particular duration, also includes dismissals and retirements. The institution's turnover rate can be compared with the average turnover rate within the industry and analysis can be made. If the rate is higher than the average it will indicate that the management is not as efficient in their human resource management, and some good case practices can be taken from institutions having a lower turnover rate. If turnover rate is low, the analysis can be more specific and answer questions like who are the people leaving and if they can be retained.


8. Diversity Rate

It is an index used to ensure that there is the diversity of employees in the organization and also establishes the diversity profile. The diversity objectives should be specific, achievable and realistic. It should be possible to measure them within a specific duration of time. Diversity rate can include objectives like gender diversity, ethnic diversity, disability diversity etc and the organization should establish standards for the same. The gender ratio, for example, measures the male to female ratio of employees, and an institution which is more focused on providing equal opportunities for work will try to keep the ratio in a good standing. Having individual experiences from diverse backgrounds use a diverse form of communication styles, and an organization which is able to understand the different communication styles within is able to build better connections between employees. Some other measures can include- education, past working environments, professional experience, motivation, and empathetic ability.

9. Average Cost to Recruit

Most financial institutions find themselves in a continuous effort to reduce the average cost to recruit as much as possible. A low cost to recruit indicates the efficiency of recruiting processes, help make a cost-effective budget and identify areas which can be improved. To know if your cost to recruit is high, low or average, you can compare it to the benchmarks present within your industry. A high average cost will indicate that some new supplements need to come in place and the current practices need to be modified.


10. Employee Qualification Index           

  Qualification standards are the minimum standards and qualifications that are required to perform a job successfully. These qualifications can be in the form of education, health, skills etc. They help employers to know what can be expected from potential employees. The index is used to identify the best-qualified candidates for a particular position or as substitutes for existing employees. The candidates are given a questionnaire and they are supposed to answer in the form of yes or no. A final rating is assigned according to the set benchmark for each criterion and according to the ability of the candidate to perform the same. This process saves a lot of time and energy during recruitment processes.


As quoted once earlier in this article, human resources are the most important resources for any organization and they need to be managed wisely. The human resource management key indicators help to analyze the health of the organization and divert energy into processes that are needed for successful operations of the business. It is important to choose the indicators according to the capacity of the institution so that the functions can be carried on efficiently.

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