Benefits of HR Analytics

Employees are the biggest cost in an organization, yet they are also the biggest asset. HR can help the organization achieve its goals by fully maximizing data-driven processes to manage and retain the workforce while attracting top talent.

HR analytics empowers companies and optimizes the HR function to improve employee performance and recruitment. It is just not practical to rely on manual spreadsheet data, which is not only scattered and time-consuming but limited compared to the level of insight that is achievable with technology.

Through the systematic analysis of measuring, tracking, and organizing data related to the workforce provides untapped opportunities to improve business performance.

HR Analytics Key Metrics

In an increasingly digital world, data is becoming the most powerful HR resource, and using people analytics can support strategic business decisions that affect sales growth, productivity, and operating costs.

HR analytics measures essential metrics such as turnover rate, retention periods, revenue and cost per employee, absenteeism, and much more. Combining this data with financial and operational data can impact the organization’s core functions to improve processes and outputs.

Let’s look at the key data points that HR analytics can help to improve:

Recruitment Efficiency

Traditionally, the recruitment process relied a lot on expensive marketing, personal judgment, and gut feel. However today, talent acquisition needs to be more personal, the recruitment process needs to be refined and cost-effective, and engagement with ideal candidates should be automated.

Data analytics offers insight into:

  • Where the best applicants are most likely to come from and the channels they’re most likely to use.
  • The ‘time in days’ determines how long it takes to hire a candidate from the time the position opens until the new employee signs the contract. 
  • Cost per hire shows what the company has to spend to get new employees on board.

Retention Rate

Hiring and training employees till they are fully integrated and productive is expensive, so employee retention is an important factor for every organization. Data-driven information can identify why employees stay. Satisfaction surveys and team assessments are just some of the tools used to collate this type of data. This can also measure employees’ engagement ratings. People who enjoy working at the organization are productive and engaged and it will also reflect on the success of the team’s manager.

Attrition Rate

There are two metrics to determine the employee attrition rate:

  • Measuring the early turnover rate for new employees who leave within a year can highlight gaps in the effectiveness of the recruitment process as it indicates a disparity between the person/position and the company. 
  • Measuring turnover over a certain period can be used with performance metrics to establish if high or low performers are leaving and why. It also gives insight into a department and managers’ performance.

Employee Performance

HR analytics lets you monitor, share, and analyze performance-related data such as employee behaviours, interactions, and capacity. Understanding the value of each individual and how their time is spent offers employers the opportunity to provide additional training, improve processes to best utilize the skills that each employee has to offer.

Promotion Rate

Being able to analyze the time since an employee last received a promotion can also identify why key personnel leaves.

Revenue Per Employee

Where employees can bill clients per hour, this metric will show the efficiency of individuals and departments. Using this with performance analytics highlights employees and managers who are doing well and those who are underperforming.


Regular absenteeism can be a good indicator of dissatisfaction that leads to turnover. This metric will also highlight if absenteeism is prevalent in certain departments that are experiencing problems.

A Starting Point

It is a big misconception that you need to be a data scientist to implement HR analytics. You simply need to outline your requirements to fully harness the opportunities that await.

  • Define the issues that business is facing with company culture, employees, and recruitment.
  • Prioritize which areas need to be improved.
  • Determine the resources needed.
  • Determine what indicators and measurements are needed. You can scroll up again to reference the list of common idicators you can apply.
  • Plan how the insights will be communicated and what action will be taken.

At the same time, it is also crucial to have a sound Record and Document Management System (DMS) in place and to ensure that HR can level up in a sure footed way, not being held back by possible gaps in accountability and failures in personal data compliances. 






Find out how a Document Management System can simplify your everyday office processes.