A KPI is a measurable value used by organization’s as a way to keep track of and determine their progress on a specific business objective. KPIs allow organization’s to evaluate how well they’re performing in different areas, and if current behaviors should be continued or a change of strategies is needed. In this post we’ve collated the best 84 KPI examples that are commonly used by organizations in various departments and teams. This post also explains how to choose the right KPIs and looks at the process for writing great KPIs. We’ve organized the KPI examples by department to help you find the KPIs you need. KPI examples for the following departments are included:
How to Choose the Right KPIs
Before we get into our extensive list of KPI examples, let’s have a look at how to choose the right KPIs for your organization. Not all KPIs will be applicable to every business, you need to carefully evaluate what KPIs are appropriate for you. The KPIs you track will depend on the industry you’re in, your organization, and the department you need KPIs for. By first having a good understanding of these areas you’ll find it much easier to select the right KPIs. The second thing you’ll need to work out is the key business objectives of the department or area you are creating KPIs for. When you understand the goals of the organization, finding a measurement that determines success or failure is quite simple. Now, let’s look at how to actually write your own KPIs.
The Process for Writing Great KPIs
The KPI examples below will help give you ideas of the type of metrics you should be tracking in different departments and why. However, as mentioned earlier, the best KPIs are tailored to your industry, company, department, and specific business objectives. Understanding the process of writing KPIs will help you create the best KPIs for your organization.
Determine the key business objectives of the department. What are the main goals the department or organization want to achieve? If you need help writing business objectives, check out our post ‘How to Write Strategic Objectives’. Keep in mind, no matter what your objective is, it must have a quantifiable aspect to it. If there is no metric attached to the objective or goal, there will be no way to measure progress. Once you have your objectives and goals well defined, move on to step 2.
With your well defined goals/objectives at hand, you now need to start thinking about how you will actually measure progress toward the metric. Measuring progress of your metric will allow you to determine whether you’re KPI is on track or behind. It’ll also show you when you achieve your KPIs (if you do) or whether you have failed to achieve your KPI.
Once you’ve decided how you will be tracking your KPIs you may want to create a KPI Dashboard. This can be created in strategy platforms such as our very own Cascade. Cascade is your one-stop solution for strategic planning, management and tracking. Create your KPI Dashboard with our FREE 14 Day TRIAL!
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KPI Examples For Understanding Your Profitability
These examples of KPIs are for helping you to understand how well your business is performing in terms of profitability. This can help you benchmark both internally and externally as well as help you to set growth targets over time.
Gross Profit Margin
Expresses your profits as a percentage of total sales revenues generated. This gives you a high level view of how much profit you’re making. Although, it doesn’t factor in all expenses so shouldn’t be used for detailed decision making. It is however useful for bench-marking your performance over time, or comparing your profitability to another similar company.
Net Profit Margin
The percentage of revenue remaining after operating expenses, interest and taxes have been deducted from a company’s total revenue. This gives a more accurate internal figure for understanding profit, but is less useful for comparisons outside of your company.
Monthly Recurring Revenue (MRR)
Monthly Recurring Revenue is a popular metric for SaaS companies such as ourselves. This metric looks only at the revenue you generate each month which will re-occur with little to no additional investment. For example any customer who signs up to a recurring monthly subscription to Cascade increases our MRR.
Return on Equity (ROE)
ROE measures your net income against each unit of shareholder equity. Return on equity ratio not only provides a measure of your organization’s profitability, but also its efficiency. Less useful for startups, but an important KPI for established organizations.
KPI Examples for Understanding your Liquidity
Being profitable is key, but if you’re not able to pay your debts or stay liquid, you won’t be around for long. These examples of finance KPIs will help do that.
The Current Ratio KPI weights your assets. Assets such as accounts receivables, are weighted against your current liabilities, including accounts payable. This will help you understand the solvency of your business.
Accounts Receivable Turnover
Shows you the rate at which you are collecting what is owed to you by customers. Calculate this by taking total earnings in one time period against your average accounts receivable in the same period. It’s best to monitor this over time so that you can use it as an early warning system. If your customers start taking longer and longer to pay you, this KPI will give you an indication of this. If this happens, it will impact your own liquidity soon enough.
Runway & Burn Rate
These two KPIs work conjointly to help you understand how much time you have for survival in the worst case example of sales stopping completely. Simply calculate how much money you’re are spending each month, this will give you your burn rate. Then, divide the total amount of cash you have available by this figure, to give you your runway in months.
KPI Examples for Understanding your Efficiency
If you’re profitable and liquid, you’ve already passed some of the hardest tests in business. Now it’s time to start measuring your efficiency as a business. This will help you identify opportunities to improve, which in turn will improve your profitability and overall stability.
Revenue per FTE
Employee costs usually make up the bulk of a company’s expenses. So, it’s often useful to measure how much revenue you are actually generating for each employee in your company. This gives you an idea of whether you’re making an appropriate amount of revenue for the size of your business.
Revenue per Customer
This gives you an idea of how much gross revenue you make per customer. How you calculate this will vary depending on the type of business. For us as a SaaS business, we look at the Life Time Value of a customer (LTV) based on what they pay in their subscription and how long a subscription typically lasts. If you were coffee shop you might instead look at the average spend in a visit.
Revenue Growth Rate
This KPI helps to ensure your business continues to grow at a target rate, measured by a percentage. Ideally you would measure this monthly or on a 12 month rolling average basis.
Cash Conversion Cycle
Measures the time it takes to convert an investment in inventory or some other resource input into cash. This gives you an understanding of how long cash is tied up in inventory before the inventory is sold and cash is collected from customers.
Asset Turnover Ratio
The asset turnover ration measures a company’s ability to generate sales from its assets by comparing net sales with average total assets. For example, a ratio of .5 would mean that each dollar of assets generates 50 cents of sales.
KPI Examples For Understanding your leads
These examples of KPIs are for helping you to understand the first part of any marketing cycle – your leads. No matter what type of marketing you’re doing (inbound, outbound, brand awareness, etc) – ultimately it’s about creating leads for your sales process to convert. This applies whether you’re a retailer selling shoes or a SaaS company selling B2B.
The most obvious example of traffic would be website hits – but the same applies if you have a physical store-front too. How many people are walking past your store (or browsing your site) and therefore how many people have a chance to see your products and perhaps become leads. This is usually measured by combining a volume measurement with a time period – so your KPI might be ‘Website visitors per day’.
Traffic to Lead Ratio
A logical extension of measuring traffic is to measure how much of that traffic actually converts into leads. You’ll need to define what a ‘lead’ means to you – is it a free trial, or a conversation with a sales clerk? Typically you’d express this as a percentage such as ‘% of traffic which starts a free trial’.
Cost per Lead
Once you have traffic converting into leads, it’s time to measure how much each of these leads is costing you (you’ll then compare this number with one of your sales KPIs around value per sale). Depending on how you source your traffic, this might be easy or hard – online platforms such as Google AdWords give you a clear cost per lead – whereas inbound marketing efforts are much harder to quantify.
This is a bit of a cheat, as it’s actually several KPIs merged into one. As you start to get an understanding of your cost per lead and value per sale, you’ll almost certainly notice that the numbers differ depending on which channel the customer first found you in. Inbound marketing sourced customers might be inexpensive but low value, whilst outbound customer might be expensive but make you great revenue. It’s important to define a target channel mix and strive toward it, to avoid taking the easy or least expensive route, just because it’s there. For example you might decide that you need to grow inbound sales by 10% or increase outbound by 30%.
KPI Examples For Understanding your brand effectiveness
People often overlook the power of an effective brand – but this can make a huge difference not only to the success of your marketing but even in your costs. A more powerful brand will likely drive a lower cost per lead with exactly the same marketing. Measuring brand effectiveness is tough and an imprecise science, but these KPIs are a great starting point:
This becomes more important as your organization grows, and is a great way to track any ‘halo’ effect from your marketing efforts. Brand recall measures how many people remember and correctly identify your brand after having seen it somewhere. In other words, how effective was/is your marketing at placing your brand at the forefront of your customers’ minds. This is typically measured through a survey to people who have been exposed to your marketing efforts (such as attendees at a conference) – they’re asked to identify your brand from a list of competing brands (who were not present) – the percentage that succeeds represents your brand recall (or awareness).
Social Media Mentions
Social media is a huge part of most organization’s marketing campaigns, and one of the best things that can happen is for people to start organically mentioning your brand or products on the likes of FaceBook, Twitter, etc. The more they mention you, the more traffic you’ll attract and the more likely you are to be part of an ever-elusive viral marketing episode. This is typically measured as ‘Mentions per week’ or something similar. Just be careful – not all social mentions are positive!
Whilst we’re on the subject of viral, we should mention this awesome marketing KPI – which measures how good your customers are at helping you to reach more customers in turn. The phrase viral is actually a little misleading, as you don’t need to achieve a truly viral marketing campaign to be able to effectively measure this number. In essence, your viral coefficient is a ratio that describes how many total customers each new customer actually represents, when you factor in their potential to refer, share your content, etc. To calculate it, you need a few numbers: ( ‘no. of current users’ x ‘invitations sent by current users’ x ‘% conversion rate’ ) / no. of current users = Viral Coefficient.
Net Promoter Score (NPS)
You could certainly argue that your NPS isn’t really a marketing KPI. Your NPS measures how likely your customers would be to refer a friend or colleague to your product. However given existing customers are a crucial marketing channel for gaining new customers, we would be remiss to ignore it. NPS is calculated by asking customers on a scale of 1 to 10 how likely they would be to recommend your product. This is then converted to a scale between -100 and +100 to give your NPS. NPS is usually time-bound, so typically you would look at your NPS for the past 30 days, rather than the total from the beginning of time to ensure that the KPI remains relevant. We measure our NPS score at Cascade using a system called Delighted and then synchronize the data back to one of our marketing dashboards built in the Cascade Strategy solution.
KPI Examples For Understanding website performance
OK, so not everyone has a website, but I’m willing to bet that you do since you’re here reading this, so let’s dive into the best marketing KPIs for tracking website performance. We’ve covered some of this ground already in the ‘Leads’ section above, so this expands on that with new website specific marketing KPIs:
Page Conversion Rate
When it comes to websites, everything is ultimately about conversions. Getting people to start a free trial, buy a product or whatever it is that you want them to do. You need to measure as a percentage, which of your pages is the most effective at getting people to complete that action. Once you understand this, you can start to figure out why it’s so effective, and how to repeat that success on other parts of your website. Page conversion would be measured using a percentage of the total visitors to the page that ultimately goes on to convert.
Time On Site
If people are spending just a few seconds on your site before clicking the back button, it’s likely that you’re doing something wrong. They’re certainly not converting if they end up heading back to the Google search results page within a few seconds of clicking on a link to your site. A good time on site will vary depending on the complexity of your product and the depth of your content. Making sure your content is filled with useful internal links is a great way to keep people engaged.
Google Page Speed
Most of the other posts that I dug up in my research for this article skipped over this one, but it’s becoming increasingly important in the world of the modern web. Speed. If your site is slow, or even if Google ‘thinks’ your site is slow – that’s going to hurt not only your user experience (and likely screw up all the KPIs listed above) – but it’s also going to down-weight you in Google’s ranking algorithm. Google hates 3 things in particular when it looks at websites and how to rank them – 1) Sites that lack mobile responsiveness 2) Sites which don’t use ‘HTTPS’ (i.e. potentially insecure sites) and 3) Slow sites. You can use Google’s free PageSpeed tool to get a score for your site. Work on speeding up your site and regularly monitoring that score over time.
New User to Returning User Ratio
Every visit to your site is not equal. When you start diving into your conversion rates, you’ll likely notice that returning users (people who’ve been to your site before) have a much higher conversion rate than new users. That’s because they’ve made a conscious effort to return to your site and are clearly interested in what you’re doing. Measuring and increasing this ratio is key to driving healthy site conversion rates.
KPI Examples For Understanding Your Opportunities
These examples of KPIs for sales are for helping you to understand the first part of any sales cycle. This is the number and quality of the opportunities (leads) that are coming through the door. This applies whether you’re a retailer selling shoes or a SaaS company selling B2B.
A simple count of the number of leads that your sales people are working on each month. Start by setting a target for the month (say 100 leads). Then break this down into the areas you want the leads to come from (outbound, inbound, free-trials, etc).
If you have a problem driving leads, you could wait for your marketing activities to kick-in… or you could take control of the situation in your sales team. Decide on the 1 key activity that drives the best quality leads (calling, e-mailing, LinkedIn prospecting) and set a target.
Qualified Opportunity Rate
So you’ve got leads coming in, but are they quality leads that can actually result in sales? Measure what percentage of your leads moved through your sales pipeline into a qualified stage. CRM systems like Pipedrive have this percentage built in to their reporting.
Opportunity to Win Ratio
The ultimate test of whether your opportunity pipeline is working – what percentage of all new opportunities ultimately turn into sales. You should measure this at an overall level for your sales team, but also by individual sales person as this is the acid-test of their performance.
KPI Examples For Understanding Your Sales Effectiveness
Now that we have a good handle on the opportunities coming through our pipeline, it’s time to dive deeper into how effective your sales team is at actually converting opportunities into sales. These examples of sales KPIs are often classed as ‘lagging’ indicators as they measure outputs rather than inputs (leading indicators). The key thing about these examples of KPIs for sales is that they must be measured in unison. Succeeding on one KPI might not be a good thing, if it’s hurting your ability to meet your other KPIs. For example you might be succeeding in shortening your sales cycle, but be achieving that by settling for lower margins.
Total Sales Volume
We’ll keep things super simple to start – you need to be measuring the total volume in $ sold by your sales team on a minimum of a monthly basis. Ideally you’ll set a constantly growing target, but don’t forget to factor in seasonal changes such as around Christmas or the holidays.
Discounts Applied / Margin Retained
Selling is one thing, but it’s easy if all your sales team is doing is applying heavy price discounts to get sales over the line. At the end of each month, take the total sales volume, and calculate it as a percentage of the total sales volume if all sales had been made at full price. Measure this regularly and ensure you’re not on a trend that is driving higher and higher discounts just to hit the volume targets.
Average Contract Length
This won’t be applicable to all businesses, but for businesses selling subscription services, you need to be measuring the average length of the contracts being signed. Even if you only offer monthly and annual options rather than multi-year, take a simple average of the lengths of all the contracts signed in a month, and ensure the trend is going up rather than down.
Sales Cycle Length
One of the things that hurts sales teams isn’t so much the lack of sales, but rather that the sales cycles are simply too long. That makes targets hard to reach quickly, and gives you less room to course-correct if sales start to take a downturn. Use your CRM system to measure the average time between a lead becoming an opportunity, and when they close to become a sale – the shorter the better.
KPI Examples For Understanding Sales Holistically
So far we’ve looked at examples of KPIs for sales that are both lead and lag KPIs. But truly effective sales teams need to be part of a more broadly effective business ecosystem. It’s therefore critical to implement sales KPIs which look deeper than simple lead and lag indicators of sales success.
Average Retention Rate
This might look a little different depending on your business. Essentially we’re looking to measure churn / retention after the sales cycle is completed. A low retention rate is often an indicator of problems in the sales process (in the worst case, it could even be due to misselling). Measure what percentage of your customers cancel each year / month (or whatever is most appropriate for your business).
Sales Cost to Sales Volume Ratio
The cost of making a sale is often higher than you think when you factor in lead costs, salaries, commissions, fixed building costs and more. Understanding your sales cost to sales volume ratio helps you make informed decisions about whether (and how) to grow your sales team efficiently. Measure the total cost of your sales efforts in a month vs the total sales volume generated in that month (or factor your sales cycle time into the formula for a more accurate view). Then convert that to a ratio and express it as a percentage.
Collateral Usage Rate
Your marketing team is busy pumping out brochures, videos and website enhancements – but are your sales teams actually using these resources? This is a great way to identify any possible disconnects between your sales and marketing teams. Measure what percentage of successful sales made use of a piece of marketing collateral and report on this as part of your monthly sales reporting.
This may sound strange, but sales teams often rely on morale even more than other teams in the business. That’s because sales culture is (rightly or wrongly) a ‘thing’ that’s proven to work to drive sales. Measure morale in the team with a mixture of surveys and qualitative discussions with team members. You can record the employee happiness in the team in a quantitative manner and see how it correlates to sales performance.
KPI Examples For Understanding Customer Satisfaction
These examples of KPIs for customer service will help you understand how happy your customer is overall. Customer satisfaction can, of course, have a huge influence on the entire organization, including the bottom line. An unhappy customer is less likely to come back…
Number of Support Tickets & Complaints
It’s important for customer service teams to measure the number of new issues/support tickets/complaints being generated every day, week, and month. This allows you to understand if these new issues correlate to any new business developments such as new product launch. If the number of new issues spikes up, you might need to investigate and resolve the root cause.
Customer Satisfaction Score
A customer service department needs to keep track of your customer satisfaction (CSAT) score. This customer service KPI measures the performance of your customer service department. You can achieve this by issuing a mini-survey to your customers after they have completed an experience with your service. You need to take it seriously and don’t rely on email feedback alone as your survey mechanism
First Contact Resolution (FCR)
FCR measures the percentage of support issues resolved by the customer service department upon first contact with a customer. For web chats or live calls, this means your agent resolved the issue before the customer ended the chat session or hung up the phone. FCR is calculated by dividing the number of issues resolved on first contact by the total number of customer contacts with the department. Issues are deemed “resolved” if the customer says they are resolved. As a result with this information, you can narrow down to issues that aren’t being resolved on the first contact and address the root cause.
Net Promoter Score
Customers who are very satisfied or delighted with your customer service often go a step further and recommend your business. Their likelihood to do this can be measured using Net Promoter Score. This can be a great way to measure the performance of your customer service. We wrote extensively about NPS in one of our previous KPI guides, so check that out for more information.
Abandon Rate of Calls & Chats
Analyzing the abandon rate can help customer service departments decide what measures need to be taken to address the issue. Consequently, the CS department may agree ring-backs should be implemented where a customer has an option to request a call back after holding on to a queue. Additionally, abandon rates can help you optimize resources such as utilizing staff from other departments during peak hours.
KPIs For Understanding Operational Efficiency
How efficient your team operates will have a direct effect on the customer satisfaction. Likewise it will also impact on the overall business value the customer service team bring to the table. These examples of KPIs for Customer Service are all about helping you to understand how the team’s speed influences the performance overall.
Average Resolution Time
Great customer service is synonymous with timely resolution of issues. Therefore, if your department responds to customer queries faster, they will be happier with your services and will be more likely to stick around for long. If the department is unable to keep the resolution time low, it might be an indication that your team is understaffed.
Companies that make their customers wait on hold for long periods of time, will struggle to please their customers. This is actually a major cause of client resentment and dissatisfaction across the globe.
Cost per Call (Contact)
The cost per call is essentially the cost associated with a customer call (or live chat) arriving and being picked by a contact center agent. The basic cost per call can be calculated by dividing the number of calls per hour by an agent’s hourly wage. This helps you determine the additional costs associated with handling extra calls. If the number of support calls reach a certain level, companies can hire additional agents to alleviate the pressure.
Average After Call Work Time
In most customer service departments, the work doesn’t end when a customer disengages the call. In many cases, agents will spend some more time informing colleagues about the call, sending emails and updating the database. Therefore, “after call work time” is the time a customer agent spends wrapping up a transaction at the end of customer call. Most managers will want to reduce this time so as to minimize the cost of interaction with a customer.
Training Investment per Employee
Whilst this is very much a lead indicator, you should closely monitor how much you’re investing in training and development. If you invest too little, it’s likely that you’ll either (a) struggle to develop top talent internally or (b) have top talent leave to pursue training and development opportunities elsewhere. Again, it’s hard to say what a good number is here, but at Cascade we’re aiming for a spend of around $2,000 per employee per year on direct training and development.
Wait Time for Callers
Having to wait in queues for endless minutes can be quite frustrating. Therefore, organization’s should ensure the average call wait time for support is within an acceptable range. Calculate this customer service KPI by dividing the total time customers wait in call queues by the total number of customer calls answered.
This is the measure of the number of repeated calls or support tickets from a customer within seven days from their first contact. The customer callback KPI encourages agents to resolve current as well as future (anticipated) issues. Therefore, any potential future issue anticipated by the agent, will be addressed comprehensively and proactively. In essence, don’t just react to the complaints and issues that clients are raising now.
KPI Examples For Understanding The Business Value
Ultimately the goal of the organization is that every team brings significant business value and there are many KPIs that can help you measure that within Customer Service, but the below examples of KPIs for customer service provide a solid benchmark to work from.
Conversion is one of the most important aspects of any business, both online and offline. This helps you to find out how likely a customer is to take a specific ‘favourable’ action after interacting with your customer service agents. The action could be to make a purchase, subscribe to a service, fill a form, make a donation, etc. This number will likely be higher if your customer service department is performing well.
Many times customer retention depends on the quality of service and products offered. Even more, what can ultimately count the most is the experience the customer gets while dealing with your business on a human level. Customer service agents are your front line ambassadors. For that reason, their interactions with customers while offering requested information or resolving arising issues will determine whether customers will stick around or look elsewhere.
KPI Examples For Measuring Process and Solutions
IT departments are often measured by the solutions they provide and how effectively they tackle challenges for an organization, so it makes sense to outline some process and solution driven KPIs.
Project Delivery Time
This is one of the KPIs that IT teams often get measured on by the wider business: Did they deliver what they promised on time? It is relatively easy to measure if you are managing projects with timelines and clear targets (weekly, monthly, quarterly, yearly). Slight delays in any process in the organization are likely to cost you time in the end.
One thing is to deliver a project on time, but if it is riddled with issues and bugs, this means very little. Therefore, measuring the number of issues per project and as a whole, can help determine where there may be challenges when launching projects, and with time, this will improve the process and reduce friction.
Service Level Agreements (SLAs)
This is quite a specific way to measure and present both performance (time) and quality. The numbers are agreed and measured monthly or quarterly to identify if the agreed level of service is being delivered. Consequently SLAs often get a bad rap because they often show an IT team is not as good as hoped, but on the flipside, they can present transparency and set realistic expectations if used positively.
This looks at how quickly and effectively your IT team can react to change in the needs of an organization. This includes the ability to scale processes and being able to pivot on projects without impacting time or budgets significantly. Your IT team can run, as usual, grow, or transform, and measure how adaptable you are will help you to understand how well positioned you are to achieve your potential.
KPI Examples for Measuring Financial Metrics in IT
Measuring monetary metrics in IT can steer technology expenditures and investments in a way that can encourage financial health. This can be done through levers of cost reductions, resource allocation, and increased accountability.
Measuring IT Budgets
This one is a pretty obvious one, but accurately measuring the budget and tracking it as a project progresses. This will put teams in a position to stay on target or address anomalies well ahead of over-spending.
A common approach from IT departments is to provide ‘chargebacks’ to other departments for rendered services. This demonstrates the value IT brings, but it is often met with resentment. By switching to ‘showback’ IT teams can measure and report the resources allocated to each department, maintaining the awareness. Measuring where resources are allocated can really help IT identify areas of weakness or stress.
Application And Service Of Total Cost
This metric helps to understand what it costs to deliver each IT offering. For example, how much do you spend on storage, networks, security, and which departments use these offerings the most. This can help uncover the ‘long-tail’ application run cost, while also aligning the expenses with business objectives.
Supplemental Financial KPIs
This sounds a little vague, but measuring other less obvious metrics can also become extremely helpful. E.g. moving to cheaper technologies or tracking costs by activity (development vs maintenance vs running systems), highlights areas of improvement.
Measuring People in IT
This area not only focuses on measuring people within IT teams, but also measuring the people the IT team services. Inclusive of other members of the organization or customers. As such, it is a critical area to measure, as we become increasingly reliant on tech to deliver products and services.
IT Happiness (NPS)
We’ve covered NPS in the Customer Service KPIs, yet this also applies to IT teams. This helps IT teams measure customer satisfaction from a technological perspective. Certainly, it can help highlight frustrations in user experience or tech issues that may not be obvious internally (speed, lagging, etc.).
KPIs On Service Desk
KPIs for in the service desk include the ticket resolving process, new processing system procedures, point of sale, and queuing procedures among other computerized systems. The effectiveness and accuracy of the service desk department will determine how much the end users will rely on the company to solve their related concerns.
Employee engagement and satisfaction
Although new and exciting projects are great, IT teams spend most of their day helping other employees and customers in the less sexy tasks (“I forgot my password again”). For that reason, it’s important to measure the level of engagement from employees and maintain focus on the overall strategy. You can measure this through surveys (eNPS – see HR KPIs).
This is almost a direct result of the level of engagement from the IT team. Highly engaged teams are more likely to come up with new initiatives and/or new ways of solving current challenges. Measuring internal initiatives will not only give you an indication of the level of engagement, but also readiness. As in the readiness to tackle unexpected turns in an agile environment.
KPI Examples for understanding your culture
These KPI examples are for helping you understand whether or not your culture is where you want it to be. Culture plays a huge part in the organizations overall success and is closely linked to other areas such as talent retention.
You’ve almost certainly heard of NPS, or Net Promoter Score. It’s how we measure how likely a customer is to recommend our product or service to someone else. Well, eNPS is a simple but effective take on the same principle. Simply modify the question to suit employees, and measure it in the same way as described here.
High rates of absenteeism can be indicative of major problems with your culture. Whilst individual employees may have legitimate reasons for absence, you need to closely monitor the blended overall trend of absenteeism. This is especially so as your organization grows. The formula is (Total lost workdays due to absence) / (Number of available workdays) = (Absenteeism rate).
Job Referral Percentage
Nothing is more indicative of strong culture than when you have a high rate of job vacancies filled by employee referrals. Employees will only refer their friends and family if they genuinely believe that they’re working in a great place. A high rate of roles filled by referrals is not only indicative of a good culture but is also a very cost-effective way to hire low-risk talent.
Turnover Rate of High Performers
Culture is important for everyone in the organization. High-performers are arguably the most sensitive to whether or not your culture is effective. That’s because they tend to have a plethora of employment options, and can look beyond hygiene factors such as money alone. If your top performers are leaving, either you’re not paying enough, OR you have a major problem with your organizational culture.
KPI Examples For Understanding Your Talent
Your people are your strongest asset. Or at least, they should be. These HR KPIs are about helping you to understand how effective you are at managing and retaining your top talent. There’s cross-over with the section above, so check out those KPIs first then move onto these more specific talent related HR KPIs:
Internal to External Hiring Ratio
Hiring internally is almost always preferable to hiring externally. It’s more cost-effective, a great way to retain talent and inspires others to build their careers at your organization. It’s also reflective of the effectiveness of your training programs and talent management capabilities. Simply measure, of the hires in the last 12 months (rolling), what was the ratio of (internal hires: external hires).
% of ‘Cherish & Retain’ Employees
If you’re using a performance management platform like Cascade, you’ll be measuring employee performance but also their future potential for the organization. One of the most useful tools here is the 9-Box Talent Grid. This grid helps you measure those two dimensions of employee success in a fair and consistent way. Implement the 9-Box Talent Grid, and measure how many employees fall into the ‘Cherish & Retain’ group each year.
Average Duration in Position
This is an interesting KPI, because you neither want it to be too high, nor too low. A low average duration indicates a poor job fit, either something wasn’t right for the employee or the employer. But a high one can be indicative of a lack of career opportunities or stagnation in the workforce. It’s tricky to say what a good average is, but I personally have found myself most engaged in organizations where I’ve moved (internally) every 18 to 24 months on average.
Training Investment per Employee
Whilst this is very much a lead indicator, you should closely monitor how much you’re investing in training and development. If you invest too little, it’s likely you’ll either (a) struggle to develop top talent internally or (b) have top talent leave to pursue training and development opportunities elsewhere. Again, it’s hard to say what a good number is here. Personally though, at Cascade we’re aiming to spend of around $2,000 per employee per year on direct training and development.
KPI Examples For Understanding Employee Efficiency
When all is said and done, a large part of the HR function is around driving employee efficiency. This is done through a series of short and long term strategies and investments. These KPIs will give you an idea of how well you’re doing overall as an organization in terms of the effectiveness of your HR team.
Revenue per Employee
This is a stat that almost all of the investors I’ve spoken to have said is important when they look at which companies to invest in. Whilst not a precise science, the revenue per employee (total revenue / total employees) is a good indicator of how efficient your overall organization is. Payroll is usually the biggest cost on the P&L. Organizations with a low revenue per employee rate don’t tend to survive long. The key is to benchmark within your industry, as there is no ‘right’ answer for what this should look like overall.
3-Month Failure Rate
Most organizations have probation periods in their contracts with employees. But this doesn’t protect you from the damage that a bad hire can cause. The amount of wasted money, time and energy that goes into bad hires (who don’t make it through their probation) is a huge driver of overall efficiency. Measure how many employees failed before the 3-month mark, and try to manage this to be as low as possible.
Average Time to Hire
Unfilled vacancies can be a killer to your overall productivity. The longer it takes to fill a role, the more cost you’re likely to incur (both directly through recruitment and indirectly through opportunity cost of not having someone in the role). This could also be a sign that your culture or even reputation isn’t where you need it to be. Don’t try to manage this KPI directly, but rather monitor it and try to understand the underlying drivers.
Average Time to Achieve Goals
A bit of a wildcard, but if you’re already using Cascade, you’ll know that we’re all about achieving goals. By using a goal management system, you can quantify exactly how effective your employees are at meeting the goals that you set for them, and how quickly they do so.
KPI Examples For Measuring Safety In The Workplace
Number of Reported Accidents & Incidents
This ‘lagging indicator’ is a pretty obvious one, but it really gives a high-level benchmark to the organization in terms of knowing if safety is improving or worsening. In addition to monitoring the number of accidents/incidents, you’ll probably also want to convert this number to a ratio per employee – i.e. 0.001 accidents per employee. Keep an extra close eye on this Health & Safety KPI during times of change – new processes, new machines, etc.
Lost Time Injury Frequency Rate
This refers to the number of lost time injuries that happen per million hours worked. So a ‘LTIFR’ of 8, would mean that 8 lost time injuries take place every million hours worked. To work out the LTIFR you multiply the number of lost time injuries by 1,000,000 then divide that number by the total number of hours worked in an organization. So if you have 8 lost time injuries and 3 million hours worked, your LTIFR is 2.6.
Lost Time Injury Incidence Rate
This measures the events that occur over a standard period of time by a standard number of people. So if we want to calculate the ‘LTIIR’ (Lost Time Injury Incidence Rate) for 1,000 people, we multiply the number of incidents by 100, then divide it by the number of people. So let’s say we have 3 incidents. 3 x 100 = 300. Divide that by the number of people and we get a LTIIR of 0.3. So for every 100 people, an organization would have a 0.3 LTIs.
Measuring the number of equipment breakdowns and creating a goal to improve this number, you affect both safety and production. Since often when critical equipment breaks down, there is a loss of activity. Most importantly, this is a strong lead indicator that will play a huge role in the reduction of incidents. This is because a large percentage of incidents happen due to the state of the equipment used.
KPI Examples For Measuring Health In The Workplace
Employee Perception of Management Commitment
This KPIs for Health and Safety is usually measured through regular surveys. These allow an organization to understand if employees feel that what they do on a daily basis and the management objectives are on the same path. People tend to follow procedures and instructions better if they see a connection in what they do and ‘the big picture’. It’s a little like running an NPS for employees.
Average Overtime Hours Per Person
This average is a great KPI to help measure the average time worked by someone beyond their normal working hours. The idea is that if you keep this number low, it can mean that an organization is successfully managing workload and reducing the chance of fatigue in the workplace. You do want to be careful with this KPI, as it is not applicable to all types of organizations and the definition of ‘overtime’ will vary per organization.
Satisfaction With Environment Score
This is something that would be measured as part of an eNPS survey. It involves obtaining employee feedback on several levels, including how satisfied they are with their physical surroundings (desk, office, noise levels, building, toilets, greenery, etc…), right through to their emotional environment. Low scores might indicate issues with that are adversely affecting the health (physical but more likely mental) of your employees.
Offering free health checks and monitoring the results can have a positive effect on both the individual and the workplace. If an independent assessor is used, staff will benefit from the reviews. However, an organization can have an overall understanding of the health level as a team, and proactively work to change this. This can be achieved through introducing programs and improving the physical environment. Measure the success of such programs via KPIs that look at take-up and satisfaction levels.
KPI Examples For Measuring Efficiency Of Your Health & Safety Processes
Monthly Health and Safety Prevention Costs
This is the expenditure that will be aimed at minimizing health and safety hazards within an organization. It will include training, inspections and audits that will be aimed at offering conducive and safe working conditions.
Productive Days %
This is a nice twist on the more negative approach of measuring sick days and time off due to accidents. It flips those KPIs into a more positive approach of celebrating the number of days of productive work that were successfully delivered. You can do this by using productive days as a percentage of the total available working time. For example, if your organization had 10 employees and there were only 5 days lost due to health and safety issues, your Productive Days % would be 99.86% ((3645 days / 3650 available days) x 100 = 99.86%).
% of Management Trained in Health & Safety
This simple leading indicator will help you avoid many of the accidents and incidents that might otherwise occur. It also helps you to understand the effectiveness of your training programs. It’s up to you to define what that health and safety looks like. But, once you have, it’s as simple as measuring how many managers have undergone it and expressing as a percentage. You can do the same thing for all employees if you want to.
Average Time To Resolution of Risks & Issues
If you’re using a platform to help you manage risks and issues (which in many cases will be directly linked to health and safety incidents), you’ll be able to measure how long it takes you on average to resolve these issues from the time that they’re first reported. For example, if someone reports loose cabling in a certain part of the office. How long did it take for this to be investigated and resolved? [Hint – Cascade can help you capture risk and issues, give it a try!]
Health & Safety is a serious topic and the single most important thing to get right in your workplace. We’re not health and safety experts, and this article is intended for information only. When it comes to implementing health and safety KPIs at your workplace, you need to get serious and speak to some experts in that space! 🙂
Hopefully you’ve found our collection of KPI examples useful. If you’re looking for a platform to help you create and track KPIs for your business, then look no further than our strategy execution platform Cascade!
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