AroFlo: KPI tracking and setting team targets

PARTNER SPOTLIGHT

KPI tracking and setting team targets

Contributed by AroFlo

Tracking the performance of your tradies is important. Key performance indicators (KPIs) are a way to measure and monitor your team’s performance. Without KPIs, your tradies won’t have any idea about what you’re expecting from them.

KPI TRACKING REFERS TO THE METHOD YOU USE TO MONITOR YOUR PERFORMANCE METRICS.

In our trade business, we use a Staff Performance Dashboard to track KPIs every week and review KPIs with our team members on a monthly basis. Through this KPI reporting process, we can identify how employee performance plays out on our bottom line. First, you have to set performance targets for your tradies — and be clear on your why.

What’s the point of KPI tracking?

KPI tracking provides you, as the trade business owner, with information you can draw on to analyse, review and assess individual employee performance against your defined goals. Through the collection of data, KPI tracking serves as a benchmark from which to drive progress towards your business goals and identify areas to fine-tune and improve.

KPIs should:

• Tie into your overall business objectives • Measure areas that’ll influence the success of your business; and • Identify areas requiring further action. The point of KPI tracking is to give you data to inform decision making in your business. However, while cultivating a high-performance team is top of mind for you (as it should be), your employees’ worth can’t be reduced down to just a number. At the end of the day, your team members are people, not resources to be consumed.

Which KPIs should be tracked — and why?

As the trade business owner, it’s up to you to track which employee performance KPIs matter to you and your defined goals and objectives. Importantly, setting achievable targets for your team is essential and will be guided by your goals and team culture.

Using our Staff Performance Dashboard, here’s four examples of KPIs we track: 1. Revenue per employee (we call it: Total invoiced out)

This is a measure of what each employee brings in — and is an actual figure — not calculated as an average. It establishes whether each team member isn’t costing you more than they’re making you.

2. Profit per employee (we call it: Gross profit)

This employee performance KPI breaks down profitability (free from expenses). It measures how much money each tradesperson is bringing in each day/ week/month over and above your break-even point.

3. Employee billable percentage

This KPI shows you the overall ratio of directly profitable work to internal cost each employee engages in. It demonstrates the relationship between “billable” and “non-billable” time, in an effort to maintain a healthy balance.

4. Overtime per employee

The overtime metric can be interpreted in different ways. For us, we monitor how many hours a week our tradies are working. Overtime is both paid and a necessary part of the job in a trade business. While KPI tracking and reporting is a must-do for every tradie in business. Your team members will perform better when they’re engaged in your business, you genuinely care about them, and achievements are recognised and celebrated.

Quick KPIs checklist

So, you’re now ready to step up your KPI tracking and KPI reporting. For us, using job management software, AroFlo, integrated with accounting software, Xero, has streamlined the process.

Before you get started, ask yourself the following questions:

• Are your KPIs should be easy to understand and measure? • Does your team know why KPIs are important? • Have you clearly communicated KPIs and expectations? • What does accountability look like? • How frequently will you track and review KPIs with team members? • How will you track the data?

Ultimately, KPI tracking is for learning and decision-making, not personal judgement. It’s designed to drive collaboration and continuous improvement, not instilling fear within a workplace. Employee buy-in is the key to KPIs and creating a high-performance team.