Key Performance Indicators For Measuring Employee Success

Employees are the most important asset a business has. The human resource department aims to work on and improve this asset to ensure efficiency, profitability, and ultimate success of the business that employs it. The key measurements of efficiency in the business are the key performance indicators. They're strategic tools that help HR determine how to achieve the business's goals through effective hiring and employee retention. Here are some KPIs that are worth monitoring in a business.

First-year leavers percentage

In any business, new hires are expensive. They need to be interviewed and thoroughly prepared for the job that awaits them. The more complex the work, the more difficult it is to bring them up to speed. This is why the retention of employees in the first year is such an important metric.

If you're losing staff before their twelve months are up, this speaks to potential problems with the training and onboarding process. The job description might not fit exactly what the employee experiences on the job or the company culture doesn't allow for easy integration of new employees. Either way, if the percentage of first-year leavers is high, changes need to be made.

Length of time in the company

One of the more important performance indicators within a company is how long employees stay in their positions. The average number of weeks, months, or years that an employee is working within the company can tell you a lot about the business.

It’s one of the more effective ways to measure employee retention. The longer they stay in the company, the better your strategies and benefits are. Keep in mind, it also measures employee satisfaction to a degree. There will obviously be a correlation between the satisfaction of your employees and their length of tenure.

Overall holiday day usage

Holiday days are important perks for employees in every line of work. They need to be well-rested and mentally prepared for the year ahead of them. These vacation days help them recuperate to a degree, but they also serve as a good measure of their organizational skills.

While you might instinctively believe that low usage of holiday days would be a good thing, the opposite is actually true. If an employee doesn’t use all of their reserved days, this means that there’s something holding them back. In most cases, they simply can’t organize their work in such a way to make up for the downtime. This could be a result of the work or their own mistakes in planning and organization.

Workers that do take all of their allocated vacation days have either prepared for it well in advance, or they can simply take a break and still function well when returning to work. It's also a good sign when employees can recognize burnout and take a break either way. A well-rested employee is much more productive than a burned-out one.

The utilization rate of employees

How employees are utilized during work hours can give you a good glimpse into your business’s performance. The ratio between an employee’s billable hours and their total hours logged shows you a clear image of their profitable work. This can be weighed against the cost of employing them and how you can adjust their work.

If the utilization rate isn’t high enough for many employees, the business needs to make adjustments. The business’s HR department should first look into kpi training and how to improve general performance indicators such as the utilization rate. Then changes can be made to activities so that time management is improved for employees.

Many businesses introduce time-tracking software to get a better idea of how to achieve this. You can take note of which activities take up too much time and adjust them accordingly. It’s a great way to improve results and employee efficiency.

Freelancer numbers

Businesses will often employ freelancers and contractors for certain projects. While filling the external capacity needs of your company is important, it’s also crucial that the numbers remain balanced.

If the business is in need of a lot of external help, this could be indicative of a resource shortage. If key departments are under pressure and lack the expertise or resources to finish projects, you might have to adjust your hiring strategy. Introducing more employees with talents in specific areas would be a good investment to reduce freelance numbers.

Monitor these numbers regularly and factor shortages in your job advertising strategy. It’s going to help create a healthy balance of employees and external assistance that benefits the company.

Conclusion

The success of your business depends on your employees and how efficiently they are utilized. With KPIs, you can get a better understanding of how your employees are handling their work and how you can improve efficiency with precise changes. With this in mind, consider the above examples to help improve your own business and make necessary changes.

Emily Wilson is a psychology student from Sydney and a freelance writer with 4-year long experience, passionate about inspiring readers to make healthier life choices. She is also a marketing and design enthusiast who also enjoys travelling.