HR ANALYTICS — Meaning, Importance and Metrices- All you need to know

Lunge Systems
4 min readOct 31, 2022

HR analytics, also referred to as people analytics, workforce analytics, or talent analytics, involves gathering together, analyzing, and reporting HR data. It enables your organization to measure the impact of a range of HR metrics on overall business performance and make decisions based on data.

Using HR analytics you can answer the following questions about the organization’s HR system:

  • How high is your employee turnover rate?
  • Do you know which of your employees will leave your organization within a year?
  • What percentage of employee turnover is regretted loss?

How can HR Analytics be used by organizations?


HR Analytics can:

  • Collect and analyze past data on turnover to identify trends and patterns indicating why employees quit.
  • Collect data on employee behavior, such as productivity and engagement, to better understand the status of current employees.
  • Correlate both types of data to understand the factors that lead to turnover.
  • Help create a predictive model to better track and flag employees who may fall into the identified pattern associated with employees that have quit.
  • Develop strategies and make decisions that will improve the work environment and engagement levels.
  • Identify patterns of employee engagement, employee satisfaction and performance.


HR Analytics can:

  • Enable fast, automated collection of candidate data from multiple sources.
  • Gain deep insight into candidates by considering extensive variables, like developmental opportunities and cultural fit.
  • Identify candidates with attributes that are comparable to the top-performing employees in the organization.
  • Avoid habitual bias and ensure equal opportunity for all candidates; with a data-driven approach to recruiting, the viewpoint and opinion of one person can no longer impact the consideration of applicants.
  • Provide metrics on how long it takes to hire for specific roles within the organization, enabling departments to be more prepared and informed when the need to hire arises.
  • Provide historical data pertaining to periods of over-hiring and under-hiring, enabling organizations to develop better long-term hiring plans.

10 HR metrics you absolutely need to watch

1. Headcount

Headcount is the total number of people working in your company at any given time. This includes permanent, temporary, and contingent employees as well as gig workers.

The headcount tells you if you have enough people to accomplish your goals. It also allows you to forecast how that number may change.

2. Turnover

If you thought replacing employees was easy, think again. The process can sometimes cost one-half to twice the employee’s annual salary. This should be a good motivation to want to reduce turnover rates.

Metrics you need to know include:

  • Predicted resignation — an approximate number of people that will leave the company in the near future.
  • Resignation trends — are more or fewer people quitting now than in the past quarter? Can you spot any patterns?
  • Estimated replacement costs — how much will it cost to replace those who leave the company?
  • Resignation drivers — why do people leave the organization?

3. Diversity

Diversity, equity, inclusion, and belonging (DEIB) are becoming priorities in many organizations. But there’s still room for improvement.

Common DEIB metrics to track include:

  • Ethnicity;
  • Gender;
  • Location;
  • Industry.

The more diverse an organization is, the more chances it has of attracting top talent.

4. Compensation

Compensation is one of the top reasons people leave their jobs. It doesn’t just mean that the pay is too low. It might also mean that there are no advancement opportunities, or that people feel disrespected.

Compensation includes salaries, bonuses, paid time off, health insurance, retirement plans, and more. By tracking this metric, you make sure the pay scale is aligned with the market demand.

5. Total cost of workforce

The total cost of the workforce (TCOW) is more than salaries. It includes:

  • HR data such as headcount, salary, and benefits;
  • Finance data such as workforce overheads;
  • Market data.

6. Spans and layers

By using the spans and layers metrics, your organization can reduce costs. These metrics also make it easier to assess salary grades and promotion opportunities.

Spans refer to the number of people who directly report to each manager. Layers refer to the number of supervisory levels. Common spans and layers metrics to know include:

  • Productivity;
  • Performance;
  • Standardization of responsibilities;
  • Types of work;
  • Interdependency;
  • Contingent layers.

7. Employee Engagement

Employees are a key component in any business. How well they relate to their employers, their colleagues, and the work they do are all part of the employee engagement metrics. In other words, this metric is about how connected and involved employees are in an organization.

Employee engagement metrics to track include:

  • Voluntary turnover;
  • Absenteeism;
  • Employee performance;
  • Glassdoor reviews;
  • Net promoter score (NPS) in feedback surveys.

8. Talent acquisition

Talent acquisition metrics may help prevent huge cost loss. They track how a person moves through the hiring process — from the job description to the offer and beyond.

Talent acquisition metrics to know include:

  • Revenue per employee;
  • Quality of hire;
  • Performance turnover in key jobs;
  • Dollars of revenue lost due to position vacancy days;
  • New hire failure rate;
  • Applications per role;
  • Diversity hires.

9. Learning

Learning metrics track individual employees’ career development. They help reduce voluntary turnover and absenteeism. They improve engagement and individual performance.

Learning metrics to track include:

  • Skills that will be needed in the future;
  • The trajectory of the current learning path;
  • Internal hires/promotions;
  • The baseline of skills present in the organization.

10. Workforce planning

These metrics allow you to identify gaps between the current workforce and your future needs. Without these metrics, you risk lacking the necessary people to achieve your goals.

Common metrics to know include:

  • Absenteeism;
  • Attrition and turnover rates;
  • Time to proficiency for new hires;
  • Tenure, seniority, and experience levels;
  • Skills coverage.



Lunge Systems

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