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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.
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:
HR processes have several objectives, including:
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:
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.
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.
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.
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.
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.
The key human resources processes include:
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.
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.
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 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, 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.
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.
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.
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.
Follow these best practices to evaluate the effectiveness of your HR processes:
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:
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.
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, 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.
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
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 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.
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.
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.
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
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.
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.
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.
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.
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