Human resources processes are the backbone of organizational success. They’re not just administrative tasks but also catalysts for a healthy and thriving workplace by fostering talent, aligning employee skills with company goals, and cultivating a positive company culture.

These processes successfully blended human potential and strategy and ensured the employee’s journey was empowering, engaging, and productive. HR is about people management and building an environment where businesses and employees can create a healthier workplace and drive better outcomes together.

What is the Human Resources Process?

The human resources process is a series of strategic activities that aid HR professionals in managing and optimizing the employee experience throughout their journey, from recruitment to exit. Its main objective is aligning employees’ capabilities with organizational goals and simultaneously fostering personal growth and success.

HR process has seven main characteristics:

  1. Structure: HR processes follow clearly defined steps to ensure decision-making and employee management consistency.
  2. Strategy: They are designed to align HR with overall business goals and contribute to the business’s long-term success.
  3. Dynamic: HR processes must be flexible enough to adapt and evolve to changes in the workforce, technology, industry, or market.
  4. Data-driven: To make informed decisions, the effectiveness of HR processes must be evaluated using metrics and analytics.
  5. People-centric: HR processes focus on employee development, engagement, well-being and on promoting a positive work environment overall.
  6. Compliance-oriented: HR processes ensure that organizational policies, industry standards, and labor laws are observed.
  7. Interconnective:  Thorough training and development and offboarding. These processes don’t work separately but are closely linked to ensure a unified employee journey.

HR processes have several objectives, including:

  1. Employee development: HR should assist in enhancing employee skills and competencies through training and career growth opportunities.
  2. Employee retention: They are crucial in maintaining employee satisfaction, retaining top talent, and reducing employee turnover.
  3. Talent acquisition: The human resources process is essential for attracting and hiring skilled candidates that meet the company’s needs.
  4. Performance optimization: These processes also help align employee performance with business goals.
  5. Workplace culture: HR is vital in fostering a positive work environment and promoting employee physical and mental well-being.
  6. Operational efficiency: HR processes help streamline different HR tasks, saving time and resources and improving organizational productivity.

Why Should Companies Prioritize HR Processes?

Ineffective and incorrect HR processes can have a severe negative impact on your organization. They can cause you to lose valuable employees, hire the right people, or create a better work environment. Not to mention that they will only do something to align employee skills with company goals.

It’s, therefore, essential for companies to prioritize human resource processes. Here are the benefits of doing so:

  • Improving recruitment quality

HR processes should define precise candidate sourcing, screening, and selection steps, streamlining the recruitment process. As a result, the company can shorten its hiring cycle and attract higher-quality candidates who are better aligned with its needs and culture.

On the other hand, streamlining recruitment helps employers and candidates enhance their experience and make a positive impression on the company brand.

  •  Enhancing employee development

Prioritizing HR processes, especially training and development, ensures that employees get relevant and targeted opportunities to grow and upskill. By providing structured learning paths, employees have a better chance to advance their careers with the organization, which increases employee loyalty and decreases turnover.

Additionally, investing in employee development makes the organization less reliant on external hires, as it can draw from its talent pool.

  • Increasing employee satisfaction

By prioritizing HR processes, companies can enhance the overall employee experience. Structured onboarding will ensure new talent feels welcomed and supported and help them adapt faster to the company culture.

Employees who feel appreciated are more motivated and engaged. This leads to higher satisfaction and loyalty and lower absenteeism. A satisfied workforce increases productivity, making the company more attractive for top talent.

  • Better decision-making

HR processes need to be data-driven to ensure better decision-making. This is done by analyzing and tracking key metrics, including employee engagement, performance, turnover, etc. Thanks to this, HR can identify trends, measure initiatives ‘ impact, and make informed decisions that benefit employees and the organization.

Furthermore, organizations can better respond to internal and external challenges with relevant data, remove guesswork, align HR strategies with business goals, and ensure long-term organizational success.

  • Operational efficiency

Finally, a streamlined human resources process reduces administrative burdens and redundancies, allowing HR professionals to focus more on strategic initiatives.

HR processes must be efficient to speed up everyday activities such as paperwork, payrolls, etc., and improve accuracy.

This can turn HR departments into important strategic partners within the organization.

Overview of Key Human Resources Processes

The key human resources processes include:

  • HR planning
  • Talent recruitment and selection
  • Onboarding
  • Employee performance management
  • Benefits administration
  • Training and development
  • Employee relations
  • Offboarding

Human Resource Planning

If a process doesn’t have a well-thought-out plan that identifies essential needs and strategies to meet them, it’s doomed from the start. HR planning begins by examining the organization’s current situation and identifying current and future talent needs.

HR planning helps businesses avoid talent shortages and surpluses. It considers skill requirements, market trends, and company growth and helps ensure business continuity.

Recruitment and Selection

The recruitment and selection process is the key to attracting and choosing the best candidates for a specific position.

On the one hand, recruitment includes creating relevant job descriptions, advertising openings on channels relevant to talent, and sourcing candidates while targeting both active and passive candidates.

On the other hand, selection involves vetting candidates through interviews, assessments, and background checks and determining if they are a good fit for the company. This ensures that the company hires those who are good on paper and those whose values align with its own.

Onboarding

Once a new talent is welcomed into the organization, the assumption that they will immediately make an impact needs to be corrected. They must first familiarize themselves with the new role, understand the culture, and join the team. This is where onboarding comes in.

The onboarding process should also be structured to ensure the new employee fully understands their job expectations, the company’s mission and values, and how their performance will be measured (i.e., what standards the company will use to measure it). Without good onboarding, it’s challenging to create a positive employee experience.

Performance Management

Performance management includes setting clear expectations, monitoring progress, and providing feedback. This perpetual process evaluates past performance and encourages growth, development, and recognition.

Additionally, the performance management process must be transparent to provide accountability and motivate the workforce to align their efforts with the organizational goals.

Benefits Administration

Benefits, such as compensation, health insurance, paid time off, or retirement plans, are vital for employee satisfaction. A well-designed benefits package attracts new talent, boosts the company’s reputation as a good employer, and gives it an advantage over competitors.

Of course, the benefits administration process must be adaptable to talent needs and regularly updated to keep the company competitive.

Training and Development

Practical training and development lead to improved employee performance and career growth. The process begins by identifying skill gaps, continues by designing relevant training programs, and continuously encourages employees to learn and prepare for future challenges.

This isn’t only about the talent having the technical skills but also about focusing more on developing their problem-solving, communication, and leadership capabilities to help them in their career progression and help the company fill key positions more efficiently and quickly.

Employee relations

Without good relations among employees and between employees and management, including a supportive work environment, the company can’t succeed. Naturally, employees will have grievances, get into conflicts, etc. These must be handled and resolved, and HR should foster channels that promote open communication, workplace transparency, and trust.

It’s also vital that the organization has clear policies and procedures aligned with its mission and values and ensures disputes are solved relatively and transparently.

Offboarding

Many companies miss the mark when it comes time to say “goodbye. ” Understanding why an employee is leaving can give invaluable insight into areas for improvement, making exit interviews a must-have part of the offboarding process.

In addition, offboarding includes the more tedious parts of collecting company property, completing the paperwork, and protecting sensitive information that the former employee might have.

Best Practices for Evaluating the Effectiveness of Human Resources Processes

Follow these best practices to evaluate the effectiveness of your HR processes:

  1. Set clear objectives. What does success look like for each HR process? Define it and align it with business goals.
  2. Use data-driven insights: Gather and analyze relevant data, such as employee surveys, and identify strengths and weaknesses.
  3. Benchmark against industry standards: Identify areas of improvement for your company and competitiveness by comparing your HR metrics with industry standards.
  4. Incorporate employee feedback: Listen to employee feedback in surveys, pulse checks, focus groups, stay interviews, and exit interviews to gain better insight into employees’ experience with HR processes.
  5. Conduct regular reviews and audits: Regular reviews and audits ensure that HR processes are up-to-date and aligned with best practices.
  6. Automate and optimize tasks: Use HR software to automate routine and repetitive tasks and focus more on strategic initiatives.
  7. Foster a culture of continuous improvement: Don’t let your HR processes become rigid. Listen to feedback and carefully watch trends to make the necessary changes to refine them.

That said, we still need a way to measure the effectiveness of HR processes. We can do this by carefully analyzing HR-related metrics and data.

Here are the key metrics to measure your HR’s effectiveness, along with examples and formulas to measure them:

  • Employee Engagement Index

The employee engagement index (EEI) is a metric organizations use to evaluate employee engagement and assess how much extra effort employees put into their roles. It reveals employees’ overall engagement and productivity levels.

EEI focuses on multiple questions around employee engagement that reveal job satisfaction, relationships with management and colleagues, attitude toward the company, productivity, etc. The HeartCount Semiannual Report gives a clear overview of the employee engagement index, how many employees met EEI criteria, and the EEI participation rate:

To understand EEI, we need to examine employee surveys, and we can typically use scales to quantify employee engagement.

  • Time-to-fill

Tiime-to-filll represents the time between posting a vacancy and the candidate accepting the offer. A short time to fill indicates an effective recruitment process, while a lengthy one can indicate potential bottlenecks.

Time to fill = Total number of days to fill all positionsTotal number of filled positions

For example, a company has hired three new persons, each with 15, 20, and 30 days. The time-to-fill for all three is then 10+20+30/3 = 20 days.

  • Cost per hire

Cost per hire, or CpH, is a metric that shows how much the company spends to hire new talent.

Cost per Hire = Total recruitment costs (internal + externa)Number of hires

For example, if the company spent $100,000 on hiring this year and employed 100 people, its cost per hire would be $1,000.

  • Employee turnover rate

Another important metric for measuring the effectiveness of HR processes is the employee turnover rate. This represents the percentage of employees who left the organization within a specific period, such as a quarter or a year.

Employee Turnover Rate = Number of employees who leftAverage nummer of employees100

  • Manager effectiveness

For 57% of employees, a supportive manager is the most important reason to stay with the company. Tracking managers’ effectiveness provides important insight for HR to identify those needing more training or coaching.

HR can use quantitative and qualitative methods, such as employee engagement surveys, retention rates, 360-degree feedback, or goal achievement, to measure manager effectiveness.

  • Training return on investment (ROI)

Training ROI indicates the financial costs of the training and development process within the company. 

Training ROI = Net training benefits – Training costsTraining costs100

For example, if a company invests $5,000 in sales training programs and sees a $30,000 increase in sales, its training ROI is 500%, which is very high.

  • Internal mobility rate

This metric tracks the rate at which company employees move internally (for instance, being transferred from one department to another) and are promoted to higher positions. It is an excellent indicator of an organization’s good development program.

Internal mobility rate = Internal promotions / Internal transfersTotal number of employees100

So, if a company promotes 20% of its junior employees to more senior positions within two or three years, that means their development and growth process works well.

  • Absenteeism rate

The absenteeism rate is closely related to employee relations and provides key insight into job satisfaction, well-being, and morale. A high rate usually means a poor work environment, low engagement, management issues, etc. However, this also ties into performance management, highlighting areas where HR needs to intervene to improve morale or attendance.

Absenteeism rate = Number of absent daysTotal workdays100

For instance, if a business sees a 10% absenteeism rate while the industry benchmark is 7%, that’s a signal that the company should introduce a new wellness program or offer flexible work options.

  • Quality of hire

While the cost-per-hire metric shows us how much the company is spending on hiring, it doesn’t say much about the quality of those hires. Of course, this is a bit trickier and involves looking at performance reviews, retention rates, and the cultural fit score to see the effectiveness of the recruitment and onboarding processes.

Quality of hire = Performance score + Retention score + Cultural fit score3

  • Offer acceptance rate

This metric signals how attractive the company is as a potential employer for candidates when making job offers.

Offer acceptance rate = Number of offers acceptedTotal number of made offers100

In 2023, Business Services (82%) and Health Technology (80%) had the highest OARs. If a company has an OAR of, say, 75%, that indicates it may work on its benefits advantages process.

  • Employee Net Promoter Score (eNPS)

The employee Net Promoter Score (eNPS) helps employers track employee loyalty, satisfaction, engagement, and overall enthusiasm for working for the organization. It’s based on only one question: “How likely are you to recommend our organization as a place to work for others?” and is measured on a scale of 0 to 10.

Why Should You Measure HR Effectiveness?

Here are three key reasons that explain why you should measure HR effectiveness:

Understanding the impact and value of HR on the organization

Measuring the effectiveness of HR processes is crucial for better understanding the impact and value the human resources department has on the company.

This also helps to identify HR’s strengths and weaknesses and measure its performance. More specifically, measuring HR effectiveness makes measuring HR’s contributions to organizational goals and business performance easier.

Improve workforce planning

Another reason for measuring HR effectiveness is identifying skill gaps and workforce planning.

This allows the company to forecast future workforce needs and ensures it has the right people in the right roles at the right time.

Identify resource allocation inefficiencies

Finally, measuring HR effectiveness gives a good indication of how effectively your resources, including time and money, are used and ensures they’re only used to help your business.

This will allow you to see which HR processes deliver the most value and where improvement is needed. 

What gets measured gets managed

The famous management consultant Peter Drucker is often credited with saying, “What gets measured gets managed.” While it’s debatable if the words really came from him, they’re still valid for measuring HR’s effectiveness.

HR impacts every aspect of the organization and should be done differently. Evaluating the effectiveness of the human resources process gives you insight into the quality of your recruitment process, helps increase employee satisfaction, improves decision-making, enhances operational efficiency, and more.

Join the Thrivea.com private beta list to elevate your HR processes.