The role of human resources (HR) extends far beyond traditional functions like recruitment and employee relations. Today’s HR professionals can influence organizational success through their evolving role in strategy and performance management.

HR has shifted from merely handling administrative tasks to leading workplace culture and engagement. A Forbes article highlights that the future of HR is defined by two main focus areas: enhancing the employee experience and driving innovation. Moreover, HR leaders are now integral to strategic business decisions, especially in addressing workplace trends, including artificial intelligence (AI) integration and addressing diversity, equity, and inclusion (DEI), and sustainability. 

HR can rely on key performance indicators (KPIs)  to ensure the effectiveness of their initiatives and processes. According to The KPI Institute’s State of Strategy Management Practice Global Report – 2023, organizations primarily use KPIs in two main areas: assessing employee performance and evaluating overall corporate performance. 

Integrating KPIs into employee evaluations helps set clear expectations, track progress, and provide feedback. Furthermore, using KPIs for corporate performance helps monitor progress toward strategic goals and drive organizational success. To guide HR leaders in selecting the most effective KPIs, The KPI Institute (TKI) has released the Top 25 Human Resources KPIs – 2024 Edition. This report series is designed to share TKI’s expertise in utilizing KPIs for performance measurement. Inside the report is a practical, step-by-step guide for improving performance, which highlights how KPIs can bring greater clarity, focus, and enhancement to any performance measurement process.

The 2024 edition of the Top 25 KPIs reports features a two-page KPI Documentation Form Template. The first page includes updated fields based on the latest research and analysis from TKI, and the second page provides essential guidance on KPI reporting. The 2024 edition features practical examples of KPI results and illustrative designs for scorecards and dashboards for each KPI featured in the report.

The Top 25 Human Resources KPIs consist of 17 functional areas with 61 main functions, including accounting, information technology, and supply chain, procurement, and distribution. It also compiles from 25 industries with 100 divisions such as transportation, government – state / federal, and healthcare. 

The KPIs in this report are distributed in six categories: Retention, Talent Development, Recruitment, Workforce, Absenteeism, and Compensation and Benefits. In this year’s report, % Employee turnover is highlighted as the leading KPI, which falls under Retention. It “measures the rate at which employees leave the organization in a given time period (e.g., month, quarter, year).” 

To gain deeper insights into the significance and function of % Employee turnover and to uncover the other top KPIs shaping the HR industry, explore the Top 25 Human Resources KPIs – 2024 Edition. The full report is now available for purchase in print on Amazon and for digital download from the TKI Marketplace.

The Great Resignation made front-page news globally in 2021 and continues to be a contentious workforce issue this year. In a survey conducted by Gartner, results show that annual employee voluntary turnover in the United States is expected to increase by nearly 20%, of which 37.4 million employees are quitting their jobs until the end of 2022. 

Evaluating turnover is one of the key matters in Human Resources (HR) management because it has a significant impact on determining employee availability in the future. According to Forbes, having replaced an employee is more expensive than maintaining them as the entire recruitment procedure must be restarted, which takes more “time and resources.” Moreover, a high turnover rate leads to extra costs for finding a replacement, decreased productivity, a scarcity of experienced and efficient workers, and a lack of faith in the team’s abilities.

Employee turnover is unavoidable, regardless of industry or sector. But how can it be reduced? There are a lot of ways to reduce turnover but it should start within the organization. Promoting healthy company values and culture increases the motivation of employees to stay. Based on surveys, 46% of job seekers believe that company culture is essential and 15% reject job offers relatively because of the culture. In addition, 35% of American workers would not accept a job offer if the culture is not right even if the job offer is perfect for them. 

Once the company culture is established, choosing the right employee to join the organization is essential. Business Development Bank of Canada (BDC) Consultant Irene Lis believes that the first step in the employment relationship is recruitment. Also, Irene mentioned that organizations should hire employees not only for their skills and experience but also for their compatibility with the team and desire to be a part of the company.

If an organization aims to retain its employees, it should investigate and evaluate the reasons for employee retention and work to strengthen these. Forbes shared, “turnover rate is an excellent indicator of what is wrong or right with your human resources policies and the organization in general.”

The KPI Institute has released its key performance indicator (KPI) of the Month, which is % Employee Turnover. This indicator “measures the rate at which employees leave the organization in a given period.” Its goal is to demonstrate the effectiveness of employee management strategies and an organization’s recruiting process. 

To know more about this indicator and clarifications and its application in terms of profile, calculation, Balance Scorecard focus, data profile, targets, and in-practice recommendations, download your copy HERE. 

KPI of the Month is a collection of infographics focused on spreading The KPI Institute’s valuable knowledge about the application of KPIs in performance measurement.