Imagine two HR departments facing the same challenge: reducing employee turnover. One relies on gut feelings and exit interviews. The other uses people analytics to identify patterns, predict which employees might leave, and implement targeted retention strategies before problems arise.
Here’s how people analytics works, why it matters, and how organizations can implement it effectively.
What is people analytics?
People analytics involves collecting and analyzing workforce data and internal metrics to make more informed HR decisions. It combines data science with human resources principles, using statistics to identify patterns and inform decisions about strategic hiring, development, engagement, retention, and more.
People analytics is one of several strategies employers use to glean data analytics for workplace benefits. Reports frequently include workforce analytics and HR analytics, as well. Although they’re often used interchangeably, these terms cover distinct topics:
HR analytics studies metrics related to internal HR systems and processes, such as time to hire, cost per hire, benefit utilization rates.
Workforce analytics examines broader labor market trends and workforce planning. It considers job seekers’ demographics, expectations, and qualifications.
People analytics focuses on factors that drive individual and team performance within an organization.
Types of people analytics and their applications
There are four main types of people analytics. Organizations must understand each category to apply them correctly when addressing their workforce challenges.
Descriptive analytics
Descriptive analytics tracks historical HR data so business leaders can better understand ongoing trends in their people operations. It answers the question: What happened? Organizations use it to monitor HR metrics like
turnover rates, time-to-hire, and compensation distribution.
For example, a retail company might track seasonal turnover patterns and discover that employee departures consistently increase during the holiday season.
Diagnostic analytics
Diagnostic analytics examines patterns and root causes to explain why something happened. For instance, if a healthcare provider noticed employee engagement scores dropping after a restructuring, diagnostic analytics might reveal increased workloads are driving dissatisfaction.
Predictive analytics
Predictive analytics uses historical data patterns to forecast internal and workforce trends, answering what is likely to happen. An employer can implement predictive models to identify employees who are likely to leave so managers can engage them before it’s too late.
Prescriptive analytics
Prescriptive analytics suggests proactive strategies to address specific goals, helping organizations determine the best course of action. For example, a logistics firm might use prescriptive analytics to develop targeted hiring strategies that better match candidates to roles.
The greatest impact comes from integrating all four types, creating a comprehensive strategy that strengthens every aspect of HR—from hiring to retention.
The importance of people analytics
Organizations that invest in people analytics gain actionable people insights, empowering data-driven decisions that improve profitability and employee engagement. Here are some of the most prominent advantages of people analytics.
Streamlined talent acquisition and workforce planning
People analytics enables companies to identify high-quality candidates and accelerate the hiring process. By analyzing patterns among top performers, HR professionals can pinpoint the skills and attributes that predict success—resulting in better-fit hires and more efficient onboarding.
Improved employee engagement and satisfaction
Traditional engagement surveys only explain how employees feel. People analytics reveals why they feel that way and what to do about it. Organizations can identify the specific drivers of engagement for different teams and roles, then implement targeted initiatives to improve morale and motivation.
Reduced turnover through predictive insights
With robust people analytics, HR professionals don’t have to wait for exit interviews to learn why employees leave. Predictive models can identify risk factors months before turnover occurs, giving managers time to take proactive steps and retain top talent.
Data-driven decision-making
Relying on instinct or anecdotal evidence can lead to inconsistent HR decisions. People analytics provides a data-backed foundation for fair and effective choices around promotions, compensation, and organizational changes.
Targeted diversity, equity, and inclusion (DEI) initiatives
Analytics enhances accountability in DEI efforts by tracking representation across hiring, promotion, and retention. Organizations can identify potential biases, measure progress, and implement changes to meaningfully improve the employee experience.
How does people analytics work?
Turning employee data into strategic insights doesn’t have to be complicated. Here are the fundamental processes that drive people analytics functions.
People data: The foundation of analytics
Business leaders collect organizational data on various factors, including employee tenure, performance ratings, compensation, workplace satisfaction, and communication patterns. The most effective analytics programs combine this info with operational performance metrics relating to sales, production, or customer acquisition to create a complete picture of workforce dynamics.
The future of HR analytics is here. Modern HR systems use AI and machine learning to enhance the speed and depth of analysis. These technologies can process large datasets quickly to identify patterns that may go unnoticed and generate predictive insights.
In small organizations, HR professionals may still perform fundamental workforce and people analytics by manually combing through data and identifying meaningful patterns. However, this approach is difficult to maintain when handling vast datasets spread across multiple sources.
Actionable insights: Using data to make decisions
The value of people analytics comes from its ability to inform real-world actions. HR leaders can translate data into tangible recommendations for hiring strategies, workforce retention programs, or employee experience improvements.
For example, a healthcare company can use people analytics insights to identify that nurses working overnight shifts may experience higher turnover rate than day shift nurses. This could signal that HR needs targeted retention initiatives for night-time employees.
The best insights answer specific business questions rather than simply reporting HR metrics.
Continuous monitoring and improvement
People analytics isn’t a one-time project. Organizations should establish dashboards and regular review cycles to track HR metrics over time and measure the impact of interventions.
Most companies use a mix of digital people analytics tools, business intelligence software, and real-time data dashboards. Modern analytics platforms are easy to use, so organizations don’t need a team of dedicated data scientists to get started.
Building a people analytics strategy for your business
Every organization manages HR processes differently, but there are several essential steps they should follow.
1. Define business goals and track key metrics
Start by identifying key business problems — whether it’s reducing turnover, improving hiring quality, or increasing productivity — so HR can build an analytics strategy that directly serves these goals. For example, if retention is the focus, leaders should prioritize insights that explain why employees stay or leave.
After outlining desired outcomes, the business can track relevant HR metrics. These might include turnover rates, time-to-hire, employee engagement scores, or performance ratings. The program should start simple, adding more metrics as it matures.
Although manual data processing is possible, advanced analytics platforms simplify and accelerate data analysis. HR teams should look for solutions that automatically gather workforce data and present it in intuitive dashboards. AI tools help spot trends quickly so leaders can make faster decisions.
3. Ensure data compliance and privacy protections
Analytics practices must follow privacy laws and ethical standards to protect sensitive employee data. In addition, HR professionals should be transparent with employees about how they collect and use data. This builds trust and encourages participation in surveys and feedback programs.
4. Translate data into actionable insights and leadership decisions
Data holds little value without taking action. HR teams should establish standardized processes to translate analytics insights into clear, actionable plans. From there, leadership can assign ownership, set timelines, and ensure accountability. The most effective organizations extend people analytics beyond HR, integrating it into broader business strategy and decision-making.
Turn insights into action with EarnIn
HR teams use people analytics to gain data-driven insights that inform workforce decisions and impact performance and the employee experience. However, information alone won’t bring about change. It must be paired with real actions that help support employee well-being.
One growing area of focus is financial stress, a key factor affecting both well-being and performance. Data indicates that
31% of employees say money worries have negatively impacted their work performance. To build a healthier, more resilient workforce, employers are taking action by offering benefits that directly address financial strain. This is where solutions like EarnIn can help.
EarnIn helps employees gain financial flexibility with a suite of powerful tools. With
on-demand pay, employees can access their pay the same day they work (up to $150/day, with a max of $750 per pay period),
starting at just $2.99 per transfer.
In addition, employees can track their credit scores for free with
Credit Monitoring,
while
Balance Shield helps protect against overdrafts.
By combining people analytics with practical financial wellness tools, employers can better meet evolving employee needs, can support financial well-being, and drive long-term performance.
Learn more about EarnIn and invest in your team’s financial well-being.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
This Blog was sponsored by EarnIn. While the author received compensation, the information shared is grounded in independent research and intended to provide helpful and accurate guidance to readers.
EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out.
A pay period is the time between your paychecks, such as weekly, biweekly, or monthly. EarnIn determines your daily and pay period limits (“Daily Max” and “Pay Period Max”) based on your income and financial risk factors as outlined in the Cash Out Maxes section of our Cash Out User Agreement. EarnIn reserves the right to adjust the Daily Max and Pay Period Max at its discretion. Your actual Daily Max will be displayed in your EarnIn account before each Cash Out. EarnIn does not charge interest on Cash Outs or mandatory fees for standard transfers, which usually take 1–2 business days. For faster transfers, you can choose the Lightning Speed option and pay a fee to receive funds within 30 minutes. Lightning Speed is not available in all states. Restrictions and terms apply; see the
Lightning Speed Fee Table and
Cash Out User Agreement for details and eligibility requirements. Tips are optional and do not affect the quality or availability of services.
Lightning Speed is an optional service that allows you to expedite the transfer of funds for a fee. Depending on the product, the fee may be charged by EarnIn or its banking partner. Lightning Speed is not available in all states. Restrictions and terms apply. See the
Lightning Speed Fee Table and
Cash Out User Agreement for details.
Calculated on the VantageScore® 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don’t be surprised if your lender uses a score that’s different from your VantageScore 3.0.
Learn more.
Balance Shield provides free alerts when your bank account balance drops below the threshold you set in your EarnIn account. You can also enable automatic transfers (up to $100/day -subject to your available earnings- with a limit of $750/pay period), if your bank account balance falls below your set threshold. You choose the speed of these automatic transfers. Standard speed is available at no cost and the transfer typically takes 1-2 business days. Lightning Speed is available for a fee [see LS Fee Table] and the transfer typically takes less than 30 minutes. You will also have the option to set a tip for automatic transfers. Tips are optional and can be $0; however, if you choose to set a tip, it will be applied to each automatic transfer. Whether you tip, how much, and how often you tip does not impact the quality and availability of services. You can cancel the alerts and/or transfers at any time in your EarnIn account settings. See the
Cash Out User Agreement for more details. While Balance Shield can help you avoid overdrafts, it does not guarantee protection from third-party fees, and its effectiveness depends on your usage and bank activity.
