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10 Benefits of People Analytics for Businesses

Learn 10 key benefits of people analytics and how to implement this data solution effectively in your organization.


By ActivTrak

A picture of a chart trending up and to the right, with people filling in the space under the bar to symbolize the benefits of people analytics.

Human resources professionals face several challenges daily, like who to hire, how much to offer in compensation packages and how to keep employees engaged and employed. In the past, they often had to use guesswork and intuition based on experience to answer these questions. With people analytics, they can use hard data to make more informed decisions across the HR spectrum to reduce turnover, improve employee engagement and optimize talent acquisition strategies. Keep reading to learn 10 key benefits of people analytics and how to implement this data solution effectively in your organization. 

What is people analytics?

People analytics, also known as HR analytics, talent analytics or workforce analytics, is the system of collecting and analyzing HR data to guide decision-making and enhance organizational performance. Using statistics and data interpretation methodology, people analytics can inform processes, roles and goals to drive business outcomes today and for the future in the HR department and the entire organization. 

At its core, people analytics is about using data to gain and use insights about managing and developing people within an organization. Meaning — collecting and analyzing data related to employee performance, engagement, talent acquisition, recruiting and other HR metrics to drive informed business decisions. It’s a relatively new area of data analytics, but can drive an organization’s success in many ways. 

Key benefits of people analytics

Implementing people analytics in your organization can yield several key benefits. 

1. Improves employee productivity

Employee productivity underlies every aspect of your organization’s success. When employees are more productive, you see more revenue, innovation and better return on investment. People analytics shows you fact-based information on how, when and where employees are most productive, so you can develop systems and processes that empower them to work their best, including which tools and technology your stack may lack.

You can also create talent and development programs based around high-performance behaviors so you can recruit candidates with the qualities and skill sets that will lead to success while fostering those same skills in your existing workforce. 

2. Sets goals for employee experience

Many companies rely on self-reporting, employee surveys and managerial reviews to gauge the employee experience in their organizations. Using people analytics uncovers real data around employee satisfaction, work levels and other factors that employees may not report. Understanding your company’s culture, technology and employee fulfillment metrics from a historical perspective gives you goalposts for how you want the experience in the future. 

By implementing the right solution to measure experience metrics, you can identify, manage and improve how employees interact with each other, the organization and the technology they use to perform their work. People analytics solutions enable you to spot the signs of burnout in employees early to prevent issues that cause a rift in your overall employee experience. 

3. Improves employee engagement

As an important contributor to both employee productivity and experience, measuring employee engagement levels is an aspect of people analytics that organizations should take to heart. Research consistently shows engaged employees are more productive, innovative and committed to their organizations. 

With people analytics organizations measure and analyze real data on employee engagement levels, identify key drivers of engagement and create targeted initiatives to improve that engagement. When you know what motivates your employees and address underlying issues, you can create a positive work environment to foster high levels of engagement. 

4. Improves employee retention

Employee turnover is a significant concern for organizations and is consistently a major drain on organizational resources. Losing valuable employees results in the loss of expertise while also incurring costs associated with recruiting and training replacements. 

With people analytics, identify the factors contributing to employee turnover – even those not reported in exit interviews – and take proactive steps to reduce attrition. Armed with data on turnover rates, employee sentiment, compensation or benefits competitiveness in the industry and other relevant metrics, your HR leaders are empowered to identify potential flight risks and create targeted retention strategies. 

5. Optimizes talent acquisition

Your recruiting and hiring processes are critical in staying competitive to attract and retain top talent. Using people analytics empowers your HR team to analyze data on candidate sourcing, screening criteria and interview performance to identify the most effective recruiting channels and selection processes.

With people analytics, the HR department improves the quality of hires and metrics like time-to-fill and cost-to-hire. A data-driven approach reduces the amount of guesswork recruiters have to use to streamline hiring processes and get the best candidates to work quickly. 

6. Promotes diversity and inclusion

Diversity and inclusion are powerful tools to drive innovation at your organization, but it can be tricky to develop policies that champion these initiatives. People analytics informs diversity and inclusion policies by answering key questions about the diversity and equity of your workforce without bias. 

Using analytics tools will uncover unintentional bias in your recruiting, hiring and development processes so your team is empowered to develop new policies and processes that are more equitable. People analytics provides insight into goal-setting for diversity, equity and inclusion programs, which plays a role in your employee engagement and experience programs as well. 

7. Optimizes workforce planning

People analytics are an integral component of strategic workforce planning. Understanding the current state of your workforce as well as where you want your workforce to be requires not only data and numbers, but analytics to provide insight into a workable roadmap.

Workforce analytics helps you identify skills gaps and resource needs — and determine ways to fill those gaps, now and in the future. This leads to increased efficiency, better employee productivity, reduced risk and better decision-making for long-term success. 

8. Informs talent and development programs

People analytics provides you with real-time factual data on employee performance and skills, rather than relying on annual or quarterly reviews. When you know what skills you want your employees to have and where those skills may be missing, you can better tailor training programs to develop those skills. 

See which employees best use their time, what tools they use  and where they may be overworked to determine where you can better train or support teams. Identify high-performing employees for recognition and reward programs or create models for your recruiting and training programs. 

9. Provides real-time information

The current business landscape requires adaptability and flexibility at all levels of your organization, and your HR department is no exception. While people analytics is often used to create future workforce plans, real-time data provides organizations the ability to change course quickly when it comes to employee engagement or performance. 

People analytics provides your teams with current information on all aspects of employee performance and experience so you can make changes for the better quickly. Spot red flags like overwhelm, unbalanced workloads and burnout risk before losing employees or suffering negative effects to your overall employee experience. Track the impacts of changes to HR processes in real time using change management data to see what’s working or where plans may need to change. 

10. Reduces misconduct and risk

Employee misconduct has devastating consequences for organizations, from compliance and security risks to workplace harassment and bias. People analytics shows leadership when and where misconduct may be occurring, which empowers them to introduce training or intervention processes before it becomes a problem.

Using people analytics, HR teams can determine previous trends based on historical data and work with IT teams and other stakeholders to create programs to enforce compliance or encourage behavioral change. This also provides an audit trail for compliance and training programs and allows leadership to monitor how effective training programs are. 

How to implement people analytics in your organization

Every organization will have different goals for their HR departments, recruiting and hiring processes and talent development, but when implementing people analytics, some key aspects lead to success. The first is determining which tools you need based on your workforce analytics goals. 

Many organizations will already have basic data collection capabilities at their disposal, including time tracking, payroll and recruiting tools. The right people analytics solutions will take these raw numbers a step further to provide actionable insights through data visualization and dashboards. Using people analytics software answers questions about what the organization may lack in its talent pool, recruiting programs, training processes or what direction the organization should take in the future. 

ActivTrak is your comprehensive solution for people analytics

Get deeper insights into your human resources department processes with HR workforce analytics from ActivTrak. In a matter of minutes, your team will have access to data on retention, skills development and job satisfaction with actionable insights to make decisions about your HR processes. Quickly see workload patterns and individual performance metrics and empower managers and individuals to use those metrics to create strategic improvement plans. Schedule a demo today to see how ActivTrak will help you harness the power of people analytics in your organization. 

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