Key takeaways:

  • Workforce analytics encompasses data analysis tools that extract meaning from metrics related to various parts of a business.
  • Combining and analyzing cross-departmental data drives strategic alignment among all business areas to positively impact business outcomes.
  • HR managers and company leaders use workforce analytics to make decisions about strategy, execution, and goal-tracking to support big-picture business goals.

Watch our video overview of the top workforce analytics best practices, then browse solutions that will help you unlock your workforce analytics in our HR Software Guide.

What are workforce analytics?

Workforce analytics provide context to the data captured in key human resource (HR) metrics by bringing various metrics together to reveal trends that impact business performance. Workforce analytics, therefore, help HR identify opportunities to:

  • Improve HR processes.
  • Prepare for future workforce needs.
  • Gauge the effects of people management on overall business performance.

Workforce analytics is different from HR analytics and people analytics because it encompasses employees’ work and work processes more broadly.

HR analytics captures the tactical parts of HR, such as the cost of payroll and payroll run times. While these metrics are important and feed into overall workforce costs, workforce analytics takes a more holistic view of processes and technology — things beyond the people and the conditions of their employment — that also affect business performance.

People analytics, often mistakenly confused with HR analytics, refers to metrics that capture overall employee experience. It also includes the effects that external factors, like the economic climate, have on employee satisfaction and engagement.

Metrics for HR analytics related to recruiting, for example, are captured and tracked in isolation from metrics for people analytics regarding employee engagement and experience.

Workforce analytics software—as either a standalone tool or embedded in an HR software platform—brings all these data points together to identify patterns that HR might not have otherwise detected. Finding the story in the data gives HR teams traction to craft data-driven plans to improve pain points or capitalize on opportunities.

Best practices for using workforce analytics

Approaching workforce analytics with a broader framework in mind helps HR get the most out of it. Start with big business goals and work backward from there to determine how HR will support those goals and track progress toward HR-specific initiatives that support business goals.

1. Set HR goals that align with broader business goals

Workforce analytics is a means to achieve people management goals that align with broader business goals. For instance, if one business goal is to expand into new markets in Asia, HR needs to build up initiatives around that in the form of recruiting, hiring, and training employees to work successfully in that region. Setting goals for those HR-specific initiatives provides a clearer picture of what type of data to analyze.

2. Ask strategic questions

Brainstorm big-picture questions about how ready the workforce is and how effective the current HR strategy is to meet short-term and long-term business goals. These questions help narrow down the particular data to track down and act on. For example, questions might include:

  • What are the factors impacting employee turnover over the next 1-2 years?
  • What roles will the company need in the next 3-5 years?
  • Does the workforce have the skills to take on new roles in the next 3-5 years?

3. Select the right metrics and tools

A clear understanding of HR goals and HR-specific questions informs the selection of the right metrics that will help HR get answers on how to execute in service of the goals. From there, the right tools to collect data on those metrics are necessary.

For example, to address the question about long-term employee retention, Workday’s Peakon Employee Voice tool is part of its platform that provides useful analytics to gauge and forecast employee retention and turnover.

4. Employ user-friendly dashboards

HR dashboards are available in standalone products like PeopleInsight, WorkForce, or Glint that draw from the rest of the HR tech stack to generate data visualization. Otherwise, HCM vendors — like SAP SuccessFactors — provide embedded analytics, complete with workforce analytics dashboards.

SAP SuccessFactors is an HCM platform that gathers all workforce analytics dashboards in one place, so users don’t have to navigate to different systems.
SAP SuccessFactors is an HCM platform that gathers all workforce analytics dashboards in one place, so users don’t have to navigate to different systems. Credit: SAP SuccessFactors

Most workforce analytics dashboards are user-friendly; however, data scientists and analysts might be necessary to ensure that the dashboards draw from the right data sources and pull clean, standardized data.

Plus, data analysts can further analyze the HR data to deliver the findings in understandable and digestible ways to executives.

5. Craft and execute a strategy

Workforce analytics uncovers trends and correlations that HR managers might not have otherwise detected. The discovered patterns serve as a foundation for HR to develop and act on strategies.

For example, to upskill segments of the workforce for future roles and skills needs, HR professionals or learning and development staff would implement a learning management system—if none is already in place—and develop tailored courses or subsidize employee training on another major platform like Coursera or Udemy.

Before rolling out any strategy, though, workforce analytics platforms like isolved let users test out the impact of changes on the workforce to make data-informed strategy decisions.

6. Measure impact and progress toward goals

Workforce analytics not only helps on the front end with forward-looking data analysis. Reports in workforce analytics tools help evaluate initiatives’ effectiveness in real-time or after the fact, giving HR a chance to course-correct.

How does HR use workforce analytics?

Workforce analytics that tells a meaningful story helps HR managers, in turn, make more informed decisions about strategies and tactics to undertake. Workforce analytics often points to correlations between two or more areas of HR that impact one another.

Craft compensation strategy

Workforce analytics draws from payroll metrics data and industry benchmarks to inform HR how to implement role banding or bonus and rewards structures to help attract and retain talent.

Demographic data helps HR identify and address pay inequities. Workday, for example, features a Pay Equity tool that helps HR identify and address discrepancies in pay across employee demographics.

Workday’s Pay Equity dashboard draws the HR team’s attention to pay gaps based on gender or race, for instance. This data, in turn, informs compensation strategy and immediate tactics, such as raises, to address pay inequity.
Workday’s Pay Equity dashboard draws the HR team’s attention to pay gaps based on gender or race, for instance. This data, in turn, informs compensation strategy and immediate tactics, such as raises, to address pay inequity. Credit: Workday

Boost employee retention

High employee turnover or attrition rates negatively impact a business’s bottom line and productivity. People analytics metrics with respect to employee experience in conjunction with demographics data and offboarding data help HR identify who’s leaving and why. Depending on the factors that most impact employee resignations, HR can pull a number of levers to address employee retention, such as rolling out or improving DE&I initiatives and investing in high performers through training.

OfficeVibe has analytics for employee engagement that can help HR pinpoint areas for improving the employee experience.

OfficeVibe features dashboards for measuring aspects of the employee experience, such as employees’ relationships with their managers. It also features industry benchmarking to compare a company to its competitors in terms of employee experience.
OfficeVibe features dashboards for measuring aspects of the employee experience, such as employees’ relationships with their managers. It also features industry benchmarking to compare a company to its competitors in terms of employee experience. Credit: OfficeVibe

Increase employee productivity

The information captured in time-tracking, employee engagement, and performance management enables HR to make decisions. For example, workforce analytics can inform time-off policy and staffing needs to ensure equitable workloads and employee work-life balance.

On the operational level, workforce analytics helps HR and IT decide on which software and workflows boost efficiency in or across departments to ultimately deliver better products and services to customers.

Reduce workforce costs

Workforce analytics aggregates costs of the workforce from data sources like payroll, benefits administration, and expense management software. This helps HR note inefficiencies and prompt a software purchase that automates core HR processes

Digging deeper into workforce costs associated with benefits might reveal underutilized benefits that need to be re-evaluated or rising healthcare costs that need to be mitigated with a switch in insurance brokers.

Future-proof the workforce with talent acquisition and development

Workforce analytics supports the HR department’s ability to prepare for future workforce staffing and skills needs by helping HR teams identify critical roles that need to be filled and skills that need to be mastered.

Oracle HCM, for example, offers a skills-matching dashboard that applies employee performance and skills assessment data to open roles. The ability to draw from an internal talent pool helps reduce recruiting costs and onboarding metrics. It also ensures the company’s top talent is engaged and on a clear development path, which fosters engagement and retention.

racle HCM provides workforce analytics that helps companies identify employees who have the right skills for a high-priority role.
Oracle HCM provides workforce analytics that helps companies identify employees who have the right skills for a high-priority role. Credit: Oracle

What are the benefits of workforce analytics?

Workforce analytics helps HR staff make data-informed decisions that support broader business goals and objectives, assisting with decisions about how to best:

  • Predict and prioritize hiring needs.
  • Monitor aspects of the employee experience that aid and drain employee retention.
  • Boost efficiency by implementing cross-functional workflows and technology.
  • Address skill and knowledge gaps.
  • Reduce workforce costs.

Workforce analytics aids HR decisions, but it doesn’t replace human decision-making entirely. Instead, workforce analytics ultimately serves as a launching pad for strategic HR initiatives.

Explore Top Human Capital Management (HCM) platforms that feature robust workforce analytics to drive cross-functional strategic alignment in your business.


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