Human resources (HR) professionals need to set strong goals to help effectively manage key tasks such as payroll, hiring, onboarding, compliance, and employee management. Taking the SMART (Specific, Measurable, Achievable, Relevant, Time-bound) approach enables you to divide these larger projects and ongoing tasks into digestible sprints, helping set your company’s key performance indicators (KPIs) or objectives and key results (OKRs). It also lets your HR team focus on their most important objectives.
Read through the examples below for ideas on how you might use HR SMART goals in your small business.
Want a more in-depth read on setting SMART goals for your business overall? Check out our SMART goal example guide.
1. Increase Retention
Hiring employees is extremely challenging in today’s work environment, and it’s increasingly costly. You must ensure your company does everything possible to retain employees. Here’s one way you might do that.
SMART Goal: Retain top employees and reduce our hiring costs by increasing our annual retention rate over the next year from 70% to 80%.
- Specific: Increase our annual retention rate
- Measurable: From 70% to 80% (10-point increase)
- Achievable: Will require the hiring of an additional HR team member to revamp the hiring process, conduct surveys on why employees leave, and adjust benefits and culture
- Relevant: Retain top employees and reduce hiring costs
- Time-bound: In the next year
2. Implement HRIS
A human resources information system (HRIS) is HR software that retains and centralizes all of your employee-related information in one place. It can help keep your employee data confidential, let staff easily access their information, including pay stubs, and keep your business compliant by ensuring employee data is correctly maintained. While there is a cost for the best HRIS, it will save your company money by avoiding the need for multiple vendors, and save your employees time when they need to review information.
SMART Goal: By the end of the next quarter, find and implement an HRIS within the company’s budget to reduce HR administration time from 75 minutes per week to 35 minutes, allowing HR staff the time to focus on company culture, benefits, and employee engagement initiatives.
- Specific: Find and implement an HRIS within the stated budget
- Measurable: Reduce HR staff administration time from 75 minutes to 35 minutes per week
- Achievable: HR staff needs time and resources to research HRIS systems and knowledge of the budget so they can ensure the cost for the software they consider aligns. When it comes to the next-quarter time constraint, they will need to consider how robust of a system they need (simpler ones can usually be set up within a month). And there will either need to be someone in-house who’s tech savvy enough to learn the system and conduct training, or the HRIS will need solid implementation support.
- Relevant: Allow HR employees to focus on company culture, benefits, and employee engagement initiatives
- Time-bound: Choose HRIS in the next 60 days and complete implementation and training within 180 days by the end of the next quarter
3. Increase Employee Engagement
According to Gallup, when employees are engaged with your business, they’re more likely to stay, reducing your turnover rate and increasing productivity. Employee engagement is key to keeping your business churning. This is a crucial component of your HR team’s responsibilities and a great HR SMART goal.
SMART Goal: Within the next 180 days, HR will boost employee engagement 20 points to 65% by adding company benefits and increasing employee recognition to achieve higher employee productivity.
- Specific: Boost employee engagement through additional benefits and employee recognition
- Measurable: Target 65% engagement, up from 45%
- Achievable: Will require hiring of one additional HR team member or an employee engagement consultant to determine the reason for low engagement and the steps needed to improve, including adding and upgrading benefits during the next open enrollment period
- Relevant: Achieve higher employee productivity
- Time-bound: Within the next 180 days
4. Reduce Payroll Errors
Payroll errors may result in government fines and penalties and cause employees to leave your company and possibly sue. To avoid these costly mistakes, HR could implement payroll software, which ensures your HR team follows a structured process and completes payroll correctly every time—and if it doesn’t, the provider will typically cover any fees and penalties that result.
SMART Goal: Within 90 days, reduce payroll errors to zero by sourcing and implementing payroll software that helps employees receive accurate pay (and therefore stay happy) and keeps the business compliant.
- Specific: Reduce payroll errors by sourcing and implementing payroll software
- Measurable: Zero payroll errors
- Achievable: Hire a payroll expert to join HR team to source and implement new payroll software; only consider software that can be set up and implemented within your time frame
- Relevant: Keep employees happy and the business compliant
- Time-bound: Within the next 90 days
5. Reduce Workers’ Compensation Costs
With few exceptions, every business must carry workers’ compensation insurance. The rate you’ll pay depends on several factors, including your industry and how many claims you have against your company. Some companies will naturally deal with more safety issues than others—i.e., construction and manufacturing businesses. To keep your workers’ comp costs in check, there are steps your HR team can take to reduce the number of workplace injuries.
SMART Goal: Within the next six months, lower workers’ compensation costs and keep employees productive by creating and implementing a safety training program that reduces worker injuries by half—to fewer than 10 per year.
- Specific: Reduce workers’ compensation costs by creating and implementing a safety training program
- Measurable: Reduce worker injuries to fewer than 10 per year, from 20
- Achievable: Need to hire safety and training consultant or pay to have in-house staff OSHA certified; create a company-specific training program and train HR staff on the program and managing workers’ compensation claims
- Relevant: Help keep workers safe and productive while reducing company costs
- Time-bound: Within the next six months
6. Establish Flexible Working Arrangements
Even before the COVID-19 pandemic, 94% of workers wanted flexible working arrangements. During the pandemic, many companies found this work setup had benefits for both the company and its employees. To ensure you provide the flexible work options your employees want and your company needs, HR should survey employees and develop a concrete plan.
SMART Goal: In the next 60 days, HR will survey every employee to determine the flexible work options they want and compile the data to establish company policies and procedures for flexible working, ensuring that productivity and engagement remain high.
- Specific: Survey employees to figure out the flexible work options that are best for them
- Measurable: Develop and conduct survey; establish policies based on the results
- Achievable: Company can provide HR staff with survey software to engage employees and compile results
- Relevant: Keep employees happy, engaged, and productive
- Time-bound: Within 60 days
7. Reevaluate Employee Benefits Offering
An attractive benefits package can help your business hire and retain high-quality employees. To ensure your company is offering highly competitive benefits, it’s important to have HR regularly review your benefits package, making changes when necessary.
SMART Goal: In the next 30 days, survey every employee on whether the current benefits package fits their needs, and compile data to recommend possible changes to the benefits package.
- Specific: Determine if current benefits fit employee needs via a survey
- Measurable: Develop and conduct survey; review responses and determine the level of satisfaction with current benefits offerings
- Achievable: Company will provide survey software for HR staff to gather employee results, determine necessary benefits updates during the next open enrollment period, and recommend possible changes based on employee responses
- Relevant: Keep employees engaged and retained
- Time-bound: Within the next 30 days
Tips for Effective Smart Goals for HR Professionals
- Engage with your HR team before setting goals. Whether your small business has an HR department of one or you have several HR employees, get them involved in goal setting. They know what’s bogging down their time and where they can make improvements. Work with them to set goals, ensuring they stay focused on their core HR duties.
- Create an action plan to achieve HR SMART goals. While the steps necessary to achieve a SMART goal might seem obvious to you, not everyone may agree. So, make sure your SMART goal statement is not the end of the conversation. Once you determine the goal, your team must create an action plan to ensure they meet the goal.
- Use a performance management system. Without a system to ensure milestones are met and each team member is on the right track, you could be left with goals that go unfulfilled. A performance management system can help you keep track of each SMART goal you set and the progress your team is making.
- Be flexible. Not every project, especially larger ones, goes according to plan; some may be delayed because of more pressing matters. Make sure you’re flexible enough to make changes to deadlines or targets. If the goal is important, find a way to make sure the objective is met, even if there’s a delay or setback.
Setting HR smart goals is important for your short-term and long-term HR success. Check out our article on setting up an HR department to ensure you take the right steps to build a solid HR strategy.
Your HR team needs goals just like every other department and employee in your organization. Without a plan, your team will wander and may fill their time doing work that doesn’t help move your company forward. Making your goals SMART ensures that you have effective and relevant objectives that help your company achieve success.