Human resource (HR) teams are responsible for their companies’ most valuable asset – people. But in fulfilling their roles, they often take on too many projects or try to do multiple things simultaneously. This could have severe implications, such as spreading the available resources too thin or causing employee burnout.
Developing objectives and key results (OKRs) is a reliable way to ensure an HR team prioritizes the right initiatives and moves in the right direction. If you still need to figure out the importance of HR teams setting OKRs, this article will clear any doubts you might have.
Why should HR teams use OKRs?
Some well-known brands, including Google, Intel, Twitter, LinkedIn, and Facebook, use OKRs in their businesses to boost and streamline their workforce. However, businesses of all sizes, including startups, can benefit from using OKRs in their HR teams.
Here are some top benefits of using OKRs for HR.
Better team alignment
OKRs connect the goals and activities of individual teams toward their company’s strategic mission. The managers collaborate with their team members to formulate and finalize OKRs. Each individual may have their objectives. The entire team will be moving in that direction.
In most companies, OKRs are visible to every team member, although individual OKRs can be private in certain circumstances when every employee has access to the company's objectives and corresponding key results, transparency increases.
Regular two-way discussion between managers and team members helps the latter understand how their efforts make a difference. Any issues of concern can be noted, and corrective measures are taken early.
When employees understand what they need to do, their productivity improves. Google is a perfect example of a brand that has achieved hyper-growth. According to Google co-founder Larry Page, OKRs have helped them multiply their growth.
Improved focus and clarity are guaranteed when HR OKRs are properly implemented. That's because there is a better understanding of the tasks and time needed to complete the project. For best results, each team or individual should have two to four objectives with three to five key outcomes for each objective.
Enhanced employee engagement
According to a 2022 report published in Gallup, only 21% of employees around the globe are engaged at work. When employees are allowed to set their individual and team objectives and tracking systems, they become more connected with the organization and develop a sense of responsibility.
Increased employee engagement is great for business, too. Research shows that firms with highly engaged employees are 23% more profitable than those with less engaged employees.
Help to reassess and stretch
At the end of an HR OKR cycle, you and your team members should look at the key results to determine if you have accomplished them. If the key results still need to be met, there is an opportunity for you to assess what might have gone wrong and if the key results need to be adjusted. For example, if the key results were overly ambitious, you can change them to more realistic ones.
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Examples of OKRs that teams can set
Some of the focus areas for HR OKRs include:
- Educational training
- Hiring and recruiting
HR teams may also cover other areas that overlap with Administrative, Finance, and Operations teams to improve overall business performance.
The following are some of the OKRs that your team can set:
HR OKRs for performance
Objective 1: Skyrocket team performance.
- Increase participation in the weekly check-ins from 65% to 90%.
- Boost OKR completion rate for employees from 50% to 70%.
- Increase product team velocity from 96 to 130.
Objective 2: Create an effective Paid Time Off (PTO) Policy.
- Hire an assistant to handle employee administrative needs.
- Assess four different solutions for leave tracking and choose the most suitable one.
- Attain a 95% approval rate for the new system.
HR OKRs for compensation
Objective 1: Strengthen compensation and benefits without going over budget.
- Increase the salary competitiveness ratio to 10% over the closest competitors.
- Increase the percentage rate of employees taking the company's paid health insurance from 30% to 60%.
- Collect feedback on the compensation plan from the top-three performers in every department.
Objective 2: Help team members utilize the available benefits.
- Increase the sign-up rate for 401K contributions by 20%.
- Send monthly reminders to employees about how they can use the benefits.
- Ensure 75% of employees have signed up for at least one of the available benefits programs.
HR OKRs for Educational Training
Objective 1: Develop a continuous education program for everyone.
- Use 15% of the information technology (IT) budget on books, training, or online courses.
- Roll out a coaching/mentorship program to at least 80% of the employees.
- Ensure all new incoming interns complete a new internship development course.
- Get an 80% attendance rate for all training and development programs.
Objective 2: Improve manager effectiveness.
- Send biweekly employee surveys to receive feedback from managers.
- Hire managerial training consultancy and ensure an 80% participation rate.
- Improve managerial performance by 30%.
HR OKRs for recruitment/hiring
Objective 1: Improve the recruitment cycle for a faster hiring process.
- Reduce the initial interview time to send an offer from 14 days to five days.
- Increase the average number of job applications from 15 to 25 per position.
- Increase offer acceptance rate from 70% to 90%.
Objective 2: Reduce cost-per-hire.
- Receive 50% of applications through free posts in community groups.
- Increase employee referral program bonus from $1000 to $1500.
- Get 10% of new hires from remote college career fairs.
HR OKRs for onboarding
Objective 1: Develop an exceptional employee onboarding program.
- Ensure 90% of new hires complete their onboarding tasks within the first seven days.
- Ensure all new hires meet their managers and direct team members on their first day.
- Decrease the average time for onboarding courses from 36 hours to 12 hours.
- Provide welcome gifts to new team members on their first day.
Objective 2: Hire and onboard five amazing new team members.
- Hire five new team members (two software engineers, two marketers, and one finance specialist).
- Launch three new training programs (one per department) for the new hires.
- Interview 10 team members about their onboarding experience and make the necessary improvements.
HR OKRs for retention
Objective 1: Improve employee retention.
- Reduce attrition rate from 40% to 10%.
- Increase employee satisfaction from 55% to 90%.
- Introduce flexible working options.
- Improve internal promotion rate by 30%.
HR OKRs for employee engagement and satisfaction
Objective 1: Improve internal communication to reduce rework and misalignment.
- Reduce the rate of resolved tasks reopening for further iterations from 70% to 10%.
- Organize 10 team presentations and allow each team to present its internal values and challenges.
- Develop a performance management system that allows all managers to take continuous two-way feedback.
- Achieve an employee participation rate of 80% or higher.
Objective 2: Improve employee happiness and morale.
- Interview 15 employees on how to improve happiness and morale across the organization.
- Achieve an employee satisfaction score of eight and above.
- Reduce the number of employee complaints from 10 to two.
- Increase the employee Net Promoter Score (eNPS) from six to eight.
Best ways to track HR metrics
The following are some of the proven ways to track HR metrics:
- Use OKR tracking software to monitor HR metrics and visualize quarterly progress. If you don't have OKR tracking software, you can also use a free template, although this may only provide some of the details you want.
- Strive to set one or two main objectives per quarter, together with three to five key results that you can measure to determine how close or far you are to achieving the set objective.
- Hold weekly check-in meetings with your teams to check the progress of OKRs.
- Carry out quarterly reviews with your team, department, and the entire organization. These reviews help you make relevant changes, depending on the progress made and plan for the next quarter.
Remember that for OKRs to serve their purpose within your organization, every team member should be aligned and moving in the same direction.
Hire from across the world with Skuad
If your HR team is looking to attract, hire, and retain some of the top talents across the world, consider working with a global employment and payroll platform like Skuad. With a network reach of over 160 countries, Skuad will help you build an international remote team without the hassle of establishing local subsidiaries.
On top of that, Skuad provides a powerful dashboard to manage all aspects of your global team, including onboarding, payroll, benefits administration, compliance, and more.
Book a free demo today to learn more about how Skuad can help you take care of your thriving distributed workforce.