The COVID-19 pandemic led to business closures and financial losses. As a result, the number of people quitting their jobs or getting laid off has increased. According to the International Labor Organization’s “ILO Monitor: COVID-19 and the world of work, “…there were unprecedented global employment losses in 2020 of 114 million jobs relative to 2019.”
For organizations monitoring this labor issue, it would reflect the % Employee turnover rate, a key performance indicator (KPI) that refers to the rate at which employees leave an organization in a given period. Consequently, % Employee Turnover Rate increased due to the effects of the pandemic. The increase was sustained by Involuntary Employee Turnover, which occurs when employees are terminated from their positions.
The economy-wide closures further disrupted the employment structure for all but essential workers. This caused an increase in the disparities between industries and social classes, with the turnover being greater among women, youth, and minorities. Moreover, the impact of the pandemic on the work system has a significant variation between regions.
The most affected were the low-wage industries requiring high human interaction, such as transportation, hospitality, food service, construction, retail, and creative industries. The State of Working America report revealed that between February 2020 and February 2021, the U.S. hospitality industry registered the highest employment loss in the nation. It is the hardest-hit sector due to a large period of restricted international mobility, losing nearly 3.5 million jobs or 20.4% by the beginning of 2021.
Changing jobs or moving to another employer seemed difficult during the pandemic. However, even if movement restrictions are subsiding and life seems to get back to normal, the employee turnover remains on an ascending trend.
Nonetheless, the job market is confronted with another challenge, and this time, it is generated by the Voluntary Employee Turnover. This type of turnover happens when an employee leaves a job mainly because they found a new job. However, the turnover can also result from promotion within the company or retirement.
Employee Turnover in the Hospitality Industry
In the hospitality industry, a bounce-back was expected as restrictions began to be lifted, but a shortage of employees countered the previsions. According to the U.S. Department of Labor, the number of employees from the sector who quit their jobs is on an ascending trend. In March 2020, 534.000 employees quit their job in the hospitality industry. The number raised to 703.000 in March 2021, while the preliminary data for March 2022 show that 889.000 employees from the sector quit.
The situation does not seem to improve as the results of the University of Central Florida study on the state of industry employment reveal that former hospitality employees are reluctant to return to work due to the pandemic and are seeking professional opportunities in different industries.
Going through the experience of a global pandemic has shifted people’s perspective of what work should be like. Although the reasons for leaving a job are subjective to each person, the most common changes seem to be oriented towards flexibility and well-being.
Even if employee turnover is seen as a result of poor business performance in an economy affected by restrictions or a change in priorities among employees, the effect of the pandemic is beyond doubt. It would continue to change the global work system and employee turnover. The change is characterized by the implementation of permanent remote or hybrid work policies, making job opportunities from around the world available, changing the jobs of essential workers, and even the phasing out of certain jobs due to automation.
Therefore, now organizations have to focus on employee retention. Together with employees, companies have to find ways to adapt to the new normal, reach a mutual understanding, and find a balance between employee expectations and business performance.
To overcome the impact of the pandemic on the % Employee Turnover Rate, organizations in the hospitality sector and even in other industries, especially in low-wage ones, could improve their compensation for employees. Meanwhile, employers could also go beyond the financial perspective and develop non-financial incentives by creating healthy and safe working environments, incorporating flexible working schedules and work-from-home options, and supporting employees as they pursue work-life balance.
To ensure employee retention, organizations must improve their communication with employees to better understand their needs, keep them motivated and engaged, create the right growth opportunities, and offer them deserved recognition.
The KPI Institute’s Professional and Practitioner training courses in Employee Performance Management are designed to help professionals in designing, implementing, and monitoring performance systems that are matched with the company’s strategic goals.
Invite your colleagues and join the Certified Employee Performance Management Live Online course on 18-22 July, 2022 to strengthen knowledge and skills in managing individual and team performance. For more information, visit our website.
Agricultural practices have been continuously developing in the past years due to science and technology. However, progress comes with a cost. A 2021 study reports that food and agriculture are responsible for 25% to 35% of global greenhouse gas emissions.
Modern agricultural systems are different compared to organic farming systems. The former uses heavily agrochemicals that increase pollution and negatively affect the underground water supplies. Most nutrients in organic agricultural systems come from biological matter additions, including manure, compost, and cover crops. These supplements feed not only the plants but also the land’s microorganisms.
Technological advancements influenced the agricultural sector as well. A method to monitor the impact of technology on the agronomical field is the use of key performance indicators (KPIs). While designed to make farming efficient, modern machines require energy use and other resources that could generate high emissions levels.
By using KPIs in the monitoring process, every farm owner will be aware of both its positive impact on the environment and the damage it may cause. FAO estimates that emissions from animal agriculture represent 14.5% of annual anthropogenic greenhouse gas emissions. By measuring the inputs and outputs, farmers can control and implicitly reduce emissions.
According to The KPI Institute, a KPI is “a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity.” In the agricultural sector, KPIs increase productivity and profitability, help manage daily operations, and contribute to informed business decisions.
KPIs in Farm Management
The increase in crop yields has been attributed to modern agronomy, plant breeding, agrochemicals such as pesticides and fertilizers and technical advancements but at the expense of ecological and environmental degradation. Selective breeding and advanced animal husbandry procedures have enhanced meat output, but these methods have generated concerns regarding animal welfare and environmental pollution.
Some of the KPIs that should be considered in the agricultural sector are:
- # Farm size
- % Irrigated farming land
- # Pesticides consumption
- $ Cost per hire
- # On-farm trials and demonstrations
- # Area of land cultivated
- $ Cost of harvesting
These KPIs support the decision-making process and give an evolutionary overview of the farm. For example, monitoring the farm size over the years shows the dimensional growth of the initial placement (storage spaces, land, stables). Knowing the percentage of irrigated farming land gives insights into future costs (water supply, irrigation system). It can help approximate the time until the entire surface will be properly irrigated. Cultivated land area and costs for harvesting insights can predict future harvesting costs of a larger (or smaller) surface. Monitoring pesticide consumption indicates the level of soil degradation, water contamination, and the risks of accidentally killing beneficial insects and non-target plants.
Meanwhile, it is important to note that each farm type has specific KPIs based on their characteristics, goals, and operations. For example, farmers on a dairy farm should consider monitoring:
- # Milk yield per cow
- # Milk flow rate
- % Dairy calves deaths under 1-month-old
- $ Daily cow replacement cost
- $ Concentrate cost per liter of milk produced
- # Cows managed per person employed
Agricultural Productivity and Costs
A 2022 study affirms that through accessing finances, the U.S. agricultural sector sequestrated more carbon in 2020 compared to 2019. Overall, U.S. greenhouse gas emissions decreased from 2019 to 2020 by 10.6%. Thanks to technological advancements and innovation, farmers and ranchers maximized their productivity while using the same quantity of inputs.
When analyzing costs, a Market Intel article highlights that chemicals and fertilizer make up the largest share of on-farm expenditures, up to 17.5%. To optimize expenses and lower the contribution to environmental degradation, the use of these materials should be reduced.
In addition, a 2019 study concludes that effective scheduling of land preparation, plantation, and harvesting; use of early maturing crop varieties, seedbeds, and transplanting procedures for intensive land through crop rotation; selection of disease, insect, and weed control methods; and efficient irrigation and fertilizer use are all feasible measures to increase crop yield and production and revenue.
To monitor productivity and costs, farmers can use these KPIs:
- # Unit production time
- $ Energy costs per unit of production
- # Energy used per unit of production
- % Input waste materials
- # Production per day
FAO describes productivity “as a ratio of a volume measure of output to a volume measure of input use.” It can be determined at any geographical scale for a singular instance (farm, commodity) or a group of farms. Most ranches produce multiple commodities with many inputs that generate costs.
As previously said, advanced technological solutions that enhance productivity without increasing costs have emerged on the market. If the farmer does not have the finances to invest in these technologies, another solution would be to decrease the commodities types and increase the quantity and quality of produced items. This way, the brand focuses on a few product types, gains customers, and increases sales. While constantly developing a customer base, the commodities price could be adjusted to increase profit.
To acquire an in-depth understanding of KPI measurement challenges and ways to address them, join The KPI Institute’s certification program in KPI measurement. The KPI Institute provides toolkits, templates, case studies, and good practice examples from some of the world’s most successful firms, as well as thought-provoking exercises. Enrolled participants will also get free access to the smartKPIs.com premium content, the world’s largest library of documented KPIs.
The Certified KPI Professional and Practitioner course is available online and via face-to-face class in some regions. Read the full details and sign up here!
The business intelligence and analytics industry reached over $ 19 billion globally in 2020, albeit the derailed economic performance caused by the pandemic. The business intelligence market growth experienced a 5.2% increase, and the data analytic growth rate is expected to rise in the coming years as companies realize the need to manage data to make better decisions.
According to Angela Ahrendts, a former retail Vice President at Apple Inc., customer data is the most significant differentiator among businesses in this era. Companies that know how to maneuver heaps of data to create strategic moves usually succeed. To determine how companies adopt and implement data analytics, let’s first understand how data can make a company’s operations efficient.
Data Analytics: Four Ways to Increase Company Performance
As discussed earlier, data analytics is beneficial for making more accurate business decisions. Managers and executives can take action on the data insights they get to drive better competitive advantages in their markets. There are four ways data analytics can accelerate business performance:
The first way is by creating informed decisions. One of the key benefits that businesses look out for when dealing with data analytic solutions is developing better and more accurate decisions from the insights they get from analyzing data.
There are two processes that ensure the development of better decisions: predictive analytics and prescriptive analytics. Prescriptive analytics are utilized to project the way companies react to forecasted trends, whereas predictive analytics focus on events that might occur after analyzing collected data.
Improving efficiency is another route. Data analytics is highly beneficial especially in the operation management for streamlining operations. For example, companies can retrieve and assess their data relating to supply chains to discover where delays in their supply networks happen or to forecast areas where problems emerge and use these insights to prevent any issues.
Data analytics also enables risk mitigation. To cut down losses, data can be utilized to reduce physical and financial risks in business. Through collecting and assessing data, inefficiencies can be either identified or predicted. Also, potential risks are revealed to inform management on creating preventive policies.
Lastly, data analytics enhances security. As many businesses confront numerous data security threats in today’s era, it is essential to keep the company’s cybersecurity out of dangerous attacks that cause financial or brand image blow. A company can evaluate, process, and draw insights from its audit logs to showcase the source of previous cyber breaches. The outcome of this exercise would be to recommend possible remedies to the problem.
Join The KPI Institute’scertification course on data analysis today to learn more about data analytics, improve your analytical skills and make wise business decisions.
“If you aim at nothing, you will hit it every time.” — Zig Ziglar
When the cost of managing and measuring your performance is less than the tragic risk of hitting nothing, it pays to get your KPIs right.
KPIs, or key performance indicators, can prove that success is a result of not just one huge undertaking but a series of actions. These actions are taken by decision-makers that consistently rely on data rather than guesswork.
In this guide, you will learn the basics and benefits of KPIs and beyond. Explore the top articles, webinars, reports, and other materials produced by The KPI Institute, a leading global research institute specializing in business performance and KPI research for over 17 years.
- What Is a Key Performance Indicator?
- Why Companies Should Use KPIs
- KPI Examples
- Applying the KPI Best Practices
- The KPI Measurement Framework
What Is a Key Performance Indicator?
The definition of a KPI, according to The KPI Institute, is “a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity.”
13 Elements of a Good Key Performance Indicator
“If a decision support system is put in place, users need the right data granularity and the guidelines or context for making the right decisions. All of these reasons have an underlying story, and top-performing organizations are able to clearly communicate that story to their employees.”
[Watch] The Relationship Between Strategic Objectives, KPIs, and Initiatives
“As performance management & measurement is shaping up as a fundamental capability for organizations across the globe, there are still multiple challenges to be overcome.”
Why Companies Should Use KPIs
Top Six Reasons to Start Using Key Performance Indicators
“Nowadays, the challenge is not about accessing information, as most companies are managing large volumes of data. The challenge is to decide which data is the most important for decision making.”
[Listen] Performance Management and KPIs: Past, Present, & Future
“What have been some of the changes that the Performance Management field has experienced over time? What are some one-size-fits-all style KPIs that any company can employ?”
[Watch] Winning with KPIs: Optimizing PMS Implementation
Discover the role of KPIs in designing a rigorous Performance Management System (PMS) to ensure an optimized implementation across all organizational levels.
Applying the KPI Best Practices
[Watch] Key Performance Indicators: The Core of Performance Management Systems
Compare KPIs and other performance evaluation criteria, identify the common KPI pitfalls, and discover how to use KPIs to create synergies between departments.
How Can We Ensure Our KPIs Are Aligned With the Strategy?
“In many cases, the key performance indicators (KPIs) monitored do not seem relevant as they are not connected to the strategy. To better understand how this problem can be addressed, we must first identify its possible causes.”
[Watch] Overcoming KPI Selection Challenges: Applying KPI Selection Techniques
“What are the most important guidelines to follow when selecting KPIs for strategic objectives? What are the most efficient KPI Selection techniques, most recommended KPI selection environments, and some Value Flow Analysis technique examples?”
The KPI Measurement Framework
How to Implement a KPI Measurement Framework
“A KPI implementation project plan provides a structure for the implementation of an organization’s performance management system. Once the project plan is set, all types of activities would have a clear deadline and designated responsibilities.”
Project Plan: Developing a Performance Management System Based on KPIs
“When formalizing and implementing a performance management system (PMS) based on key performance indicators (KPIs), there are multiple activities to be considered and many stakeholders to be engaged in the process. Therefore, you’ll need a project plan to make performance management an ongoing process within your organization.”
How Can You Improve the Data Gathering Process for Your KPIs?
“An important component of performance measurement is represented by the data collection capability. However, when applied in the organizational context, this process is neither easy nor lacking obstacles, as practitioners often discover.”
[Watch] KPI Selection Techniques
“Learn how KPI selection techniques can be implemented in practice and gain insights into the best practices for selecting KPIs.”
Advice on KPI Selection
“KPI selection is a process which seems simple, yet is inherently complex, due to the interdependencies involved. Here are 15 things to consider before embarking on this journey.”
How Can You Improve Key Performance Indicator Reporting?
“Just reporting performance data will not ensure the improvement of results. Improvement is only possible when decisions are made based on the insights provided by data.”
KPIs are not just about understanding and working with numbers. Using KPIs requires stakeholders to fulfill a vision and commit to ensuring success across all levels of their organization. If you would like to learn how to select the right KPIs for your organization, sign up for The KPI Institute’s Certified KPI Professional and Practitioner live online course today.
Designing and implementing a Performance Management System (PMS) based on performance measurement tools such as key performance indicators (KPIs) is a thorough step-by-step process. It requires effective management of all the phases of the implementation process and proper allocation of responsibilities to all the stakeholders involved. With this, the KPI implementation project plan lays emphasis on conducting KPI selection workshops.
Whether or not the PMS within your organization is comprehensive, KPIs can be measured across organizational layers: Corporate/Organizational, Divisional, Departmental, or Individual/Employee levels in accordance with the organizational context. For these performance indicators to be measured in standardized tools, such as a balanced scorecard, they need to be selected, and such selection should occur during dedicated meetings.
Such meetings require the attendance of specifically allocated stakeholders to provide constructive insights and foster a corporate community culture based on continuous improvement. As a line of practice, the participants of these workshops hold positions, such as department heads, strategists, performance analysts, members of the performance management office, and allocated members of the Board, all based on their availability. Note that other members could attend the workshops as per company practice. Attendance at these important meetings requires an invitation, though.
The invitation is a crucial, pre-workshop phase, as it sets the tone, pace, and mindset of the delegates who will join the event. Such invitation is generally in the form of an email with quite some content and attached materials. The email aims to provide contextualization and reasoning behind the request to certain members of the organization to attend the workshops. It is a request that comes from the Strategy Office or the Performance Management Office or whoever oversees the Performance Management practices in the organization, at least two to three weeks in advance of the date of the event.
What should be included in the KPI selection workshops invitation?
- Brief introduction about the upcoming workshop;
- Logistical information such as date, time, and location of the event;
- Detailed KPI selection workshop agenda;
- Reading materials and corporate documentation attached
What are the key documents to be attached to mentally prepare our participants and make this workshop a success?
- As a line of practice, it is recommended to share educational materials, prepared by the Performance Management Office, related to KPI selection, KPI Alignment practices, and Performance Measurement and Management tools. The delegates, whether or not they are practitioners in the field, are invited to go through the materials;
- Strategic and Performance Management tools linked to previous performance cycles, such as Corporate Strategy Plan, Organizational Scorecards, Dashboards, and Portfolio of Initiatives, must be included.
- In certain organizational contexts, a written note from top management and C-Suites may be added in order to highlight one factor: The involvement and support of top management in the design and implementation of the framework. This note could be very beneficial buy-in wise as well.
Setting the right tone and mindset in preparation for the workshop is very much advised. The delegates, especially after the workshops occur, will act as champions in disseminating knowledge and replicating the KPI best practices in their respective departments. Furthermore, it will support the ultimate purpose of securing the much-required buy-in from middle managers and employees across departments towards the PMS design.
If you would like to learn more about KPI selection practices and the follow-up activities to the KPI selection workshops, we kindly invite you to sign up for The KPI Institute’s Certified KPI Professional and Practitioner training course. It will lead you through all the phases of the KPI implementation project plan.
Wishing you the best of performance!