Overview of some major HR KPIs
Perhaps one of the most important stages in implementation of any BSC in any industry is creation of an effective KPI set. There are lots of commercial and free libraries online that offer their hand picked collections of KPIs designed for various industries, including HR. It should be noted that there are hardly any universal sets of HR KPIs since approaches to evaluation of personnel are different in various industries. In other words, one should not evaluate HR performance of a wholesale company in the same way as efficiency of HR department in manufacturer of consumer electronics. However, there are a few universal KPIs that will suit needs of any HR BSC, namely:
- Cost per hire. No matter in what industries and markets a company operates, its HR department requires a certain amount of money to hire one employee. Even if the person can to the company for employment without any advertising (for example one of the company employees recommended him/her a particular position) the HR department still spends money (salaries for HR managers who register the employees, educate him/her, clarify wages and compensations plans etc). Logically, the less a company spends, the better HR department performs. However, this rule does not always work. Cost savings should be reasonable. Sometimes, to be able to hire experienced stuff the HR department should spend money on recruiting and advertising, agents’ fees etc. Cost per hire depends on company goals and efficiency of HR personnel. Reasonable decreases are vivid signs of a good HR performance. This indicator is one of the most important on HR BSC and thus often given much weight.
Pros of using BSC in HR
- Average time a position is vacant. If a company lacks even one employee it cannot perform normally. Even if this position is covered by another employee it cannot last forever. Thus, HR managers should do everything possible to fill the vacant position as soon as possible. For example, if the department lacks an experienced sales manager for a month, this will inevitably lead to decrease of sales volumes. At the same time, if the HR department overpays when hiring such an employee it will lead to monetary losses. So, this KPI is related to the above mentioned measure.
- Employee satisfaction. Generally, employees should be satisfied with compensations plans, working conditions and managerial approaches. In other words, if they feel satisfied they will work better. It is not a secret that satisfied employees as a rule have satisfied clients.
Obvious benefits of HR BSC
