Hiring glossary
What is a KPI?
A KPI, or key performance indicator, is a specific, measurable value that an organisation, team or person tracks to show whether they are on course to meet an important objective.
The word that matters is “key”. A business can measure hundreds of things; its KPIs are the handful that tell leaders whether the strategy is working. A good KPI has a clear definition (what is counted and how), an owner, a target, a time period and a data source everyone trusts. Revenue growth, customer retention, on-time delivery and cost per unit are typical company-level KPIs.
KPIs come in two kinds. Lagging indicators report results after the fact, such as quarterly revenue or annual staff turnover. Leading indicators move earlier and predict those results, such as qualified pipeline or the share of new hires who complete onboarding on time. A useful KPI set has both, so the team can act before the lagging number arrives.
HR and recruiting teams use KPIs to show whether hiring and people processes are working. Common HR KPIs include time to fill, time to hire, cost per hire, quality of hire, offer acceptance rate, first-year attrition, absence rate and employee net promoter score (eNPS). For individual employees, KPIs often appear in job descriptions and performance reviews as the measurable side of the role.
Keep KPIs few and stable, review them on a fixed rhythm, and pair each number with the context behind it. A KPI that people are paid on will be gamed if it can be, so watch for side effects: a time-to-fill target pushed too hard can lower quality of hire. KPIs are different from OKRs: KPIs monitor ongoing health, while OKRs set a limited number of ambitious changes for a period.
Also called: key performance indicator, HR KPIs, performance metric.
Example
A recruiting team’s quarterly KPIs are median time to fill (target: under 35 days), offer acceptance rate (target: above 85%) and 90-day retention of new hires (target: above 90%). The targets here are illustrative; each team sets its own from its baseline.
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