Your HR team’s goal is to improve human capital Return On investment (ROI). Human Capital ROI is the financial value contributed by your employees. It helps to measure the productivity of human resources. HR can use the following metrics to measure their success:
1. Employee turnover rate
A high employee turnover rate will ultimately be a high cost to the company. Replacing high performing employees costs a lot of money. If the turnover rate of high performers in your organization is 12%, reducing it to 5% will represent an improvement in human capital ROI.
2. Training investment per employee
If your training investment per employee is currently $2,000, you can increase it to $7,000 to provide your employees with all of the training and skills they need. Ultimately, investing in your employees will increase the retention rate of high performers and, in turn, improve the human capital ROI.
3. Internal promotion
Identifying the right leadership and managerial support is highly essential for an organization. Proper training and the right resource can help management promote employees internally, which will have a huge impact on ROI.
Objective: Improve Human Capital ROI
- KR 1: Decrease Turnover Rate of High Performers from 12% to 5%
- KR 2: Increase Training Investment per Employee from $2000 to $7000
- KR 3: Increase Internal promotion from 10 % to 30%
To improve human capital ROI it’s important to frame a well-defined OKR, so go through some of the best hand-picked HR OKR examples.