Training Costs: Analyze the investments in your employees

Do you invest in your employees?

Here is a Human Resources KPI example used when you want to measure how much
you have invested in onboarding new hires and upgrading one’s education. It is a
helpful metric to track employees’ development costs, and make smarter decisions
when it comes to developing their skills set after they have been hired. However,
training costs should not be limited to new hires – more and more workers today
wish they had a better job development and wish for a continuous learning in their
position. Investing in an employee for him/her to develop his/her already acquired
skills, or new ones, is an option often too little considered by HR management. Often
enough, the return on training costs is greater than the initial investment.

Performance Indicators
Implementing a little knowledge test and evaluating the scores of workers can help
you see if the training provided was effective.

Salary Cost By Department: Breakdown your total salary costs

How much does each department cost you?

Our following HR KPI is from the financial side and it tracks the percentage of salary
costs by department. According to the U.S. Bureau of Labor Statistics, salaries
account for around 70% of a business’s employee-related expenses, making it a
fundamental KPI to track to ensure these costs are justified and managed correctly.
Monitoring salary costs enables HR managers and decision-makers to plan for future
financial strategies, budgeting, and expansion to other markets, not only from a
departmental perspective but also for the organization as a whole. The costs
included in the calculation of this metric might vary from business to business but
they most commonly consider base salary, taxes, office space, equipment used,
average sick days or vacation, and other health benefits, among others.

Performance Indicators
Get an overview where most of your salary costs are coming from and take a deeper
look into the development of them as well as their impact on the revenue.
Salary Cost Development By Department: See department salary-revenue ratios

How are the salaries developing by department?

Moving on to another example from the financial side of human resources, we have
the salary cost development by department. It essentially takes the salary costs for
each department and compares them to a ratio of the business’s revenue. Through
this, decision-makers can understand what percentage of gross revenue salary-
related costs account for, but also assess if they are being efficient at using their
workforce to generate returns for the company. It is recommended to track this
indicator over time and compare various periods to identify different trends and
implement strategies to boost employee efficiency. For instance, by implementing
training instances or performing a survey to find pain points in employee
productivity, you can provide your workforce with the necessary tools to boost their
efficiency and make the business more profitable in the process.

Performance Indicators
The average salary costs to revenue ratio changes from industry to industry. Identify
your industry ratio and use it as a progress benchmark.