Regardless of the business you operate, or the size of your company, Key Performance Indicators (KPI) are essential for sustainable success and growth. Moreover, monitoring the right set of Key Performance Indicators help to reach business and strategic goals massively. That’s why we put together the most relevant Key Performance Indicator Examples.
Actually, we went through each business area of a company put together the most relevant Key Performance Indicator Examples. But of course—this list is a complete set of KPIs.
Why Are Key Performance Indicators So Essential?
The usage of KPIs provides a variety of benefits:
- Fact-based and rationalized overview of performance metrics
- Identification of problems and optimization potential
- Possibility to benchmark with other companies and industry
Be Careful! Choose The Right Set Of Key Performance Indicators!
There are probably more Key Performance Indicators available than stars in the universe — okay, that’s a bit too bold. But honestly, once you dig into the topic of Key Performance Indicators, you will quickly recognize a sheer endless amount of KPI examples.
Therefore, it is vital first to define the goals you want to achieve with your Key Performance Indicators. Subsequently, you can select those KPIs that support you in reaching the goals. And always remember: Don’t start with a whole bunch of KPIs. Take a step-by-step approach!
Human Resources — 10 Key Performance Indicator Examples
1 — Employee Net Promoter Score
Let’s start with one of my favorite Employee Engagement KPIs. The Net Promoter Score (NPS) describes how likely an employee is to recommend the company as a place to work. The KPIs originated in marketing. However, I consider it as immensely powerful.
However, there’s a small negative aspect. Collecting the data for this KPI requires some effort (e. g. employee survey). Therefore, you can update the KPIs only once or twice a year.
2 — Turnover Rate
One of the most essential HR and Employee Engagement KPIs. And definitely one, you should —always— have a close eye on!
The turnover rates put the number of employees that quit in relation to the number of employees at the beginning of a period. Lets’s make an example. Assuming the number of employees at the beginning of a year is 100. Now, in the year, ten employees quit. That leads to a turnover rate of 10%.
Try to aim for a turnover rate that’s below 10%. Of course, this depends on your business industry. However, market researches consider a turnover rate below 10% as okay.
3 — Absenteeism
Wow, what a word! When I first heard this word, I thought it is about some kind of disease. Well, actually, this isn’t that wrong. Absenteeism or the absence rate calculates the relation of absent days to the total number of working days.
A high absence rate usually is a clear indicator of low motivation or dissatisfaction.
Want To Improve Employee Engagement? Here’s how: How To Improve Employee Engagement — A 5 Steps Approach
4 — Time To Hire
A KPI that is often misunderstood (poor KPI ;). The KPI does NOT measure the time from the publication of a job vacancy to the day a candidate accepted an offer. On the contrary, this a KPI you can use to measure your internal processes. Accordingly, the KPI measures the time required from the day a candidate enters the hiring pipeline to the day he/she signs the contract.
5 — 90-Day Failure Rate
This one is straight-forward! How many of your new employees quit or get fired within the first 90 days? In this context, it is crucial to carefully distinguish if the employee leaves or you have to fire him. Why? Because each aspect leads to a different problem.
6 — Diversity Rate
A KPI that gains increasing attraction and importance. Basically, the KPI reflects an open work culture. However, the diversity rate in the context of HR and Employee Engagement KPIs has to reflect several dimensions. Age, gender, nationality, etc.
7 — Cost Per Hire
Super-important KPI when it comes to measuring HR and corporate efficiency. What’s the cost to find a suitable employee for a vacant position. Therefore, it is essential to incorporate both internal and external expenses!
8 — Average Time Required to Find A New Employee
This KPI, more or less, is an extended version of “Time to Hire.” In Hollywood would call it “Directors Cut.” It calculates the entire duration from internal requests for the additional employee until the first working day. This HR KPI is extremely valuable in terms of strategic planning!
Check out this 12 Secret Tips For Effective Employee Communication
9 — HR to Full-Time Equivalent (FTE) Ratio
A purely HR internal KPI that helps to assess the efficiency of your HR department. The KPI divides the number of overall full-time equivalents by the full-time equivalents in HR.
10 — Contract Acceptance Rate
The rate of acceptance puts the number of offered contracts to relation with accepted contracts. It’s another HR KPI that helps to identify particular weak spots.
Sales — 20 Key Performance Indicator Examples
1 — Sales Growth
Probably one of the most basic yet most important KPIs. The KPI puts sales revenue numbers in a certain period in relation to a similar period. Monthly Sales Growth is probably the most prominent example in this context. However, depending on your business, it can also make sense to use different periods (daily, weekly, quarterly, etc.)
2 — Sales Opportunities
The KPI counts the number of newly created sales opportunities, aka persons/companies interested in your service/goods.
3 — Number of calls/mails
Very often, calls and/or emails represent the very first step of a sales cycle. Therefore, it is crucial to track the sheer number of calls and emails. Worth mentioning that it is super important to put that KPI in relation with subsequent (number of leads, etc.) KPIs. However, the KPIs build an important fundament to assess the results of your entire sales process.
4 — Quote Volume
The KPI collects the financial volume of quotes provided to potential clients in a defined period. Again, usually, this KPI is calculated on a monthly basis.
5 — Sales Closing Ratio
A highly relevant KPI to identify the weaknesses of your sales process. The KPI puts your signed deals to relation with the opportunities of previous sales stages (prospects, leads, quotes, etc.). Accordingly, you can identify which steps of your sales process are working smoothly or need improvements.
6 — Average Quote Value
The KPI calculates the average value of your proposals. The KPI is hugely relevant to provide proper forecasts.
7 — Sales Cycle Length
Another KPI that is highly relevant when it comes to forecasts. The KPI measures the number of days (weeks, months) from the first outreach (or inbound touch) to the final contract sign-off.
8 — Positive vs. Negative Reply Rates
A KPI that assesses the replies you receive in the context of emails or calls.
9 — Pipeline value
The key performance indicator Calculates the value of your entire sales pipeline. Accordingly, it takes all stages (prospects, leads, quotes, etc.) into account.
10 — Sales by Region
A KPI that calculates the revenues of your products or services according to sales regions. Of course, the regions depend on your business.
11 — Quote Ratio
The KPI calculates the number of quotes you’ve submitted in a certain period concerning the resulting orders. Like other KPIs, you can apply different periods (day, week, month, etc.) to the KPI.
12 — Sales By Contact Method
The KPI assesses the performance of different contact methods. Worth to mention that this KPI only works if you are applying different contact methods (email, calls, inbound, etc.)
13 — Average Cost Per Lead
A highly relevant key performance indicator example that provides insights on both marketing and sales activities. The KPI calculates the costs related to the creation of a single lead. Costs can be connected to marketing campaigns, the effort for calls, emails, etc.
14 — Customer Lifetime Value
A key performance indicator that no solely focus on short-term sales but on strategic aspects. Therefore, it is a vital KPI that shows how much revenue is generated by a single client over time.
The key performance indicator is calculated as:
Lifetime Value = Gross Margin % X ( 1 / Monthly Churn ) X Avg. Monthly Subscription Revenue per Customer.
15 — Number of Meetings
Meetings, either on-site or digital, are usually part of longer sales processes. Most often, you require meetings after approaching potential clients with emails or calls. Of course, it massively depends on the service or goods you’re are offering. Again, you should put the KPI in context with other KPIs.
16 — Sales Per Representative
An essential key performance indicator example, especially if you are running a more extensive sales department with many representatives. It merely calculates the revenue generated by each sales representative.
17 — Average Profit Margin
Obviously, sales teams first and foremost concentrate on revenue. However, it is also essential to take cost into account and create key performance indicator that highlight the profit margin. Again, this works best for a specified period (weeks, months, etc.)
18 — Inbound Leads
Although the KPI does not directly assess your sales representatives’ performance, you should consider measuring it. The KPI calculates the number of leads created due to inbound approaches.
19 — Upsell Sales Rates
Instead of measuring revenue with entirely new clients, the KPIs calculates revenue that has been created with existing clients.
20 — Sales Revenue KPI
Last but not least, probably the most important KPI. The KPI simply measures revenues that have been realized in a defined period. The KPI is actually the most aggregated yet prominent figure.
Financial — 12 Key Performance Indicator Examples
1 — Operating Cash Flow (OCF)
The operating cash flow is calculated as the total amount of money a company’s daily business operations generate.
Worth to mention that the OCF is adjusted by aspects like depreciation, inventory changes, etc. Furthermore, it is always meaningful to compare the cash flow to the total capital employed.
2 — Current Ratio
An extremely important Key Performance Indicator reflecting a company’s ability to pay all obligations in one year. The KPI basically puts a company’s assets (account receivables) into relation to current liabilities (account payables).
3 — Burn Rate
This financial Key Performance Indicator states the spending money rate of an enterprise within a defined period: week, month or annual. Especially for smaller businesses the KPI is super relevant since it is quite easy to calculate.
4 — Net Profit Margin
Probably one of the single most important financial Key Performance Indicator in the whole world! The KPI reflects the percentage of profit concerning revenue. Or in a mathematical formula: Net margin = net profit / revenue
5 —Working Capital
Working capital reflects a company’s available assets to meet short-term financial obligations. Working Capital includes assets such as available cash, short-term investments, and accounts receivable, demonstrating the liquidity of the business.
6 — Inventory Turnover
The Inventory Turnover KPI indicates how efficiently a company sells and replaces its inventory during a particular period of time. So it reflects an organization’s ability to generate sales and quickly re-stock.
7 — Sales Growth
This financial Key Performance Indicator displays the change in total sales generated over a defined period (week, month, year). The Sales Growth shows the percentage of the current sales period compared to the previous one.
8 — Vendor expenses
This financial Key Performance Indicator shows the current payments an enterprise is due to its vendors. High expenses indicate that your business is facing problems paying to its vendors and suppliers on time.
9 — Return on Equity
This key performance indicator reflects the capacity of a business to use shareholder’s investments efficiently, generating high profits. The Return on Equity shows how much revenue a company generates for each unit of shareholder equity.
10 — Accounts Receivable Turnover
The accounts receivable turnover ratio measures how many times in an accounting period a company can collect on its outstanding accounts. More specifically, this key performance indicator example measures how effective a company is at extending credit to clients and collecting payment.
11 — Accounts Payable Turnover
Accounts payable turnover measures the rate at which a company can pay its suppliers and other obligations. The Key Performance Indicator is measured over an accounting period and gauges how many times a company can successfully pay off its supplier obligations. This KEy Performance Indicator example is usually a short-term financial measure.
12 — Gross Profit Margin
Gross Profit Margin measures how much of each dollar in sales is left as profit after accounting for the cost of goods sold. This KPI is a good indicator of a company’s financial viability as it highlights whether it can pay off its expenses and still collect revenues from every sale.
Procurement — 5 Key Performance Indicator Examples
1 — Compliance rate
Contractual and policy compliance are essential to ensure legal security. Two aspects that are essential to measure in this context. First, the ratio of disputed invoices to total invoices and second the total difference between the price paid and the price quoted.
2 — Total Spend By Vendor
A simple yet so important KPI that calculates the amount of money spent by each vendor.
3 — Purchase order cycle time
This Key Performance Indicator example calculates the average time it takes to place a purchase order. According to a recent study, best-in-class organizations take only five hours—about one-half of a business day—to send a PO to a supplier.
4 — Rate of emergency purchases
Emergency purchases are those unplanned orders which are acquired to prevent the shortage of products/services. This metric is measured with the ratio of emergency purchases to the total number of purchases over a fixed period of time.
5 — Average Purchase Order
This Key Performance Indicator calculates the average volume of a single purchase order.