Time is money.
Time management within a business is the key to efficiency, growth, revenue, and profits.
Establishing key performance indicators (KPIs) enables a business to monitor and achieve progress. In the recent past, the growth in the development and adoption of time tracking software has simplified business management to a large extent.
If you’re thinking about getting time tracking software for your business, here are our handpicked KPIs that the time tracking software will help to monitor.
Top 9 KPIs to Monitor with a Time Tracking Software
Here they are:
#1 Daily Productive Time
Time tracking software enables you to track the amount of time team members spend working every day.
Such software gives you access to every team member’s historical productivity data, allowing you to understand their performance consistency over time.
#2 Absenteeism & Overtime
There’s a close link between absenteeism and job satisfaction. One team member not showing up for work is an issue for the business and everyone else on the team.
If a team member is falling behind, the productivity of the entire team will suffer. A feature-rice employee monitoring software enables you to track absenteeism easily.
Quality Time Tracking Software also makes it easy for you to see if a team member is working more hours than stipulated.
Working overtime can be an indicator of employee health, workload, and additional workforce requirement. But, it should never be used as an indicator of employee dedication.
#3 Revenue Per Employee
Revenue per employee gives you an estimate of how much one team member brings in for the business. While the metric can be used during the yearly performance appraisal of the team member, it can also be used to benchmark the entire business.
In his book Exponential Organizations, Salim Ismail explains that linear organizations have a linear function of employees and profit.
In contrast, organizations with an exponential function of employees and profit grow much faster. With this metric, you can measure where your business stands.
Again, the business needs to measure whether the contribution of every employee can be quantified in terms of the revenue they are bringing or not. The decision depends on the business vertical and organizational role.
#4 Human Capital ROI
The human capital ROI is not as straightforward as other metrics. The use of this KPI originates from the book The ROI of Human Capital by Jac Fitz-enz.
It assesses the value of human capital, such as knowledge, habits, and attributes.
Human Capital ROI =
Company revenue−operating expenses−compensation−benefit cost / Total compensation+benefit cost
How employee time tracking software helps with human capital ROI depends entirely on the business structure. For example, a legal firm thrives on legal knowledge, and the contribution in terms of time can be measured on per hour basis vs. the consultancy received.
#5 Number of Sales
The number of sales a team member makes is one of the easiest ways to measure the member’s performance. If your business requires “simple sales,” counting the number of sales is the most straightforward way to measure team member’s performance.
However, if your business has a longer sales cycle, measuring a team member’s performance becomes more complicated. You will need to use process metrics – things like the number of calls made to customers and active leads – to monitor performance against the time spent in sales conversion.
#6 Manager’s Subjective Appraisal
Employee performance appraisal typically happens twice a year. Quality of work is the most common metric by which performance is evaluated.
Managers often use the 9-box grid to evaluate a team member’s performance better. The 3×3 table plots the performance on one axis and potential on another. Team members that showcase high performance and low potential are perfect for the role.
If both performance and potential are high, then they are ready to move on to another role.
#7 Utilization Rate per Employee
The utilization rate is the ratio of the billable hours and total hours logged by a team member. This performance indicator gives you a clear idea about the profitable work that a team member has done with respect to their internal cost.
However, to use this metric to evaluate employee performance, you will need to use time tracking software that can distinguish between billable and non-billable hours.
#8 Profit per Person
The profit per person indicator enables you to calculate the average profit that a team member makes for the company. You can calculate it by dividing the business’s total profit by the number of team members.
This KPI is most effective for businesses outsourcing work to freelancers or hiring remote workers who don’t have many in-house costs.
Correlate this with the time spent completing the task, and you have the profit ratio per person – employee, freelancer, or contractor.
#9 Average Task Completion Time
With this KPI, you can measure project efficiency more pragmatically without equating it to finances.
Average task completion rate =
Total time to complete a task / Number of times performed
The KPI gives you insight into your team’s efficiency and helps you estimate how long the different parts of a project will take to be completed.
Quality time tracking software that allows you to measure team performance with all of these KPIs can be challenging to find. With DeskTrack, you’ll be able to track all of these metrics and more.