Regardless of the business you operate or the size of your company, Human Resource (HR) and Employee Engagement KPIs are essential for sustainable success and growth. Moreover, monitoring the right set of HR and Employee Engagement KPIs helps to reach business and strategic goals massively.

Employee Engagement KPI

Why Are HR & Employee Engagement KPIs So Essential?

The usage of KPIs provides a variety of benefits, particularly in HR & Employee Engagement:

  • Fact-based and rationalized overview of performance metrics
  • Identification of problems and optimization potential
  • Possibility to benchmark with other companies and industry

Choose The Right Set Of HR & Employee Engagement KPIs

There are probably more KPIs available than stars in the universe — okay, that’s a bit too bold. But honestly, once you dig into the topic of HR and Employee Engagement KPIs, you will quickly recognize a large amount of KPIs that are available. Therefore, it is vital first to define the goals you want to achieve with KPIs. Subsequently, you can select those KPIs that support you in reaching the goals. And always remember: Don’t start with a whole bunch of KPIs. Take a step-by-step approach!

10 Essential KPIs For HR & Employee Engagement

With this blog post, we try to provide the most essential KPIs for HR & Employee Engagement. It’s definitely not a complete list, and we’re always happy to get your feedback. Put a comment on this site about the KPIs you are using!

1 — Employee Net Promoter Score

Let’s start with one of my favorite Employee Engagement KPIs. The Net Promoter Score (NPS) describes how likely an employee is to recommend the company as a place to work. The KPIs originated in marketing. However, I consider it as immensely powerful. 

However, there’s a small negative aspect. Collecting the data for this KPI requires some effort (e. g. employee survey). Therefore, you can update the KPIs only once or twice a year.

2 — Turnover Rate

One of the most essential HR and Employee Engagement KPIs. And definitely one, you should —always— have a close eye on!

The turnover rates put the number of employees that quit in relation to the number of employees at the beginning of a period. Lets’s make an example. Assuming the number of employees at the beginning of a year is 100. Now, in the year, ten employees quit. That leads to a turnover rate of 10%.

Try to aim for a turnover rate that’s below 10%. Of course, this depends on your business industry. However, market researches consider a turnover rate below 10% as okay.

3 — Absenteeism

Wow, what a word! When I first heard this word, I thought it is about some kind of disease. Well, actually, this isn’t that wrong. Absenteeism or the absence rate calculates the relation of absent days to the total number of working days.

A high absence rate usually is a clear indicator of low motivation or dissatisfaction.

Want To Improve Employee Engagement? Here’s how: How To Improve Employee Engagement — A 5 Steps Approach

4 — Time To Hire

A KPI that is often misunderstood (poor KPI ;). The KPI does NOT measure the time from the publication of a job vacancy to the day a candidate accepted an offer. On the contrary, this a KPI you can use to measure your internal processes. Accordingly, the KPI measures the time required from the day a candidate enters the hiring pipeline to the day he/she signs the contract. 

Accordingly, the KPI measures the efficiency of your internal HR and employee processes.

5 — 90-Day Failure Rate

This one is straight-forward! How many of your new employees quit or get fired within the first 90 days? In this context, it is crucial to carefully distinguish if the employee leaves or you have to fire him. Why? Because each aspect leads to a different problem. 

6 — Diversity Rate

A KPI that gains increasing attraction and importance. Basically, the KPI reflects an open work culture. However, the diversity rate in the context of HR and Employee Engagement KPIs has to reflect several dimensions. Age, gender, nationality, etc. 

7 — Cost Per Hire

Super-important KPI when it comes to measuring HR and corporate efficiency. What’s the cost to find a suitable employee for a vacant position. Therefore, it is essential to incorporate both internal and external expenses!

10 Most Essential HR And Employee Engagement KPIs

8 — Average Time Required to Find A New Employee

This KPI, more or less, is an extended version of “Time to Hire.” In Hollywood would call it “Directors Cut.” It calculates the entire duration from internal requests for the additional employee until the first working day. This HR KPI is extremely valuable in terms of strategic planning!

Check out this 12 Secret Tips For Effective Employee Communication

9 — HR to Full-Time Equivalent (FTE) Ratio

A purely HR internal KPI that helps to assess the efficiency of your HR department. The KPI divides the number of overall full-time equivalents by the full-time equivalents in HR.

10 — Contract Acceptance Rate

The rate of acceptance puts the number of offered contracts to relation with accepted contracts. It’s another HR KPI that helps to identify particular weak spots.

HR & Employee Engagement KPIs — Don’t Forget External Ratings!

Yes, there are many KPIs you can assess and calculate based on internal data. However, please do not forget to utilize external sources. Glassdoor or kununu are amazing places to get feedback from (ex-) employees for free. Especially in terms of Employee Engagement, you should use this source!

Which HR & Employee Engagement KPIs Are You Using?

Always happy to receive your feedback and thoughts. Just hit me up on Twitter or get in touch on LinkedIn.

Want To Know More About Employee Engagement & KPIs? Here’s Where To Start!


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47 Key Performance Indicator Examples — KPIs You Definitely Must Track!

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