HR tips

HR metrics and analytics for data-driven decision making 

Learn about how HR metrics and analytics can help your business make better decisions, identify trends and implement strategies for success.

HR managers and small business owners have long-debated the best strategies for dealing with complex issues that inevitably/eventually develop in any given organization—from addressing lulls in morale and efficiency to resolving disputes, to better managing PTO requests. While in the past, companies have relied heavily on qualitative (and therefore subjective) information derived from employee experiences, interpersonal dynamics, anecdotal evidence, and intuition, these methods all have their limits. But HR also deals with measurable, evidence-based data that can provide valuable insights for strategic planning. 

Since the inception of large-scale computer-driven HR metrics and analytics, data-driven decision making has 100% become a thingthe thing. Although relatively recent, the era of data-driven decision-making is fully upon us, and, when harnessed correctly, is a productivity game-changer, as well as a boon to your organization’s overall wellbeing. In short, businesses of all stripes would do well to embrace it!  

Today, HR metrics and analytics are crucial to making data-driven decisions because they provide objective, quantitative insights into numerous aspects of HR, enabling your organization to measure and evaluate key factors like employee performance, engagement, retention, and workforce diversity. Using HR metrics and analytics can help your business make better-informed decisions, identify trends, and implement strategies that optimize your people power and drive overall success. 

Essential HR metrics 

Data plays a crucial role in enhancing HR practices by providing actionable insights, facilitating evidence-based decision-making, and enabling the optimization of talent management strategies.  

Businesses that utilize HR metrics and analytics stand to derive invaluable insight from the following essential metrics: 

Employee turnover rate:

Employee turnover measures the rate at which employees leave an organization, either voluntarily or involuntarily. Computer-driven HR analytics can provide a deeper understanding of turnover by analyzing large volumes of data, identifying underlying trends and factors contributing to turnover, and helping HR decision-makers develop targeted strategies to improve retention and reduce turnover. 


Time-to-hire measures the amount of time it takes for a job vacancy to be filled, starting from the moment the job opening is posted until the candidate is hired. HR analytics offers a more meaningful understanding of time-to-hire by automatically tracking and analyzing data related to each stage of the hiring process, thereby making it a lot easier for decision-makers to identify bottlenecks or inefficiencies, and identify areas that can be improved to better streamline the recruitment process.


Absenteeism is a vital HR metric that looks at the rate and frequency of employee absences from work—whether due to illness, personal reasons, or other factors. When properly leveraged, HR analytics can provide a better understanding by analyzing historical data, identifying patterns and trends in absences, and highlighting factors that contribute to high absenteeism rates, helping HR staff to develop more targeted prevention strategies. 

Employee satisfaction:

At the very heart of any business success story is employee satisfaction. It measures the overall contentment and happiness of employees within an organization, at the same time reflecting their level of engagement, motivation, and loyalty. HR analytics offer valuable insight into employee satisfaction by collecting and analyzing feedback from surveys, performance reviews, and social media. This in turn makes it easier for HR teams to identify the data-driven interventions that will successfully bolster employee wellbeing. 

Effective data collection methods

Effective data collection methods are essential for gathering accurate and comprehensive information, and the accurate interpretation of that data is vital to drawing meaningful insights that can in turn drive intelligent and informed decision-making—ultimately improving organizational outcomes. 

The following are just a few of many possible methods for effectively collecting data: 


Surveys have long been an effective way to collect data, as they allow businesses to gather a wide range of both quantitative and qualitative information directly from employees, providing valuable insights into their perceptions, experiences, and preferences. That being said, accurate interpretation of survey data is crucial to drawing meaningful conclusions that inform strategic decision-making and drive positive organizational change.

Performance reviews:

Collecting data via performance reviews can provide structured evaluations of employees’ performance, strengths, and areas for improvement, thereby offering valuable data that can be used to assess individual and team contributions alike. Accurate interpretation of performance review data helps to ensure fair and unbiased evaluations which help guide talent development, goal setting, and performance improvement strategies.

HR information systems:

HR information systems (HRIS) can serve as a highly effective data collection methods as they centralize and automate the storage of employee data, from demographic information to performance metrics, to training records, offering a source of HR data that’s at once comprehensive and accessible. Accurate interpretation of HRIS data enables companies to analyze trends, identify patterns, and gain insights into workforce dynamics, enabling the development of effective HR strategies—ones that support organizational goals. 

How HR analytics informs strategic decision making

HR analytics can help you utilize data-driven insights as a way of aligning HR strategies and initiatives with broader business-wide objectives. It can also help you to optimize talent management practices, and ultimately drive success. 

HR analytics informs strategic decision making in the following areas:  


Forty-six percent of HR leaders report recruiting as their top priority for 2023. By analyzing historical hiring data, identifying successful candidate profiles, and enabling evidence-based decision-making, HR analytics can vastly improve the effectiveness and efficiency of recruitment processes.


An optimal onboarding process is a crucial factor in any employee’s success. HR analytics can analyze performance data, identify skill gaps, and evaluate the impact of training programs, thereby empowering organizations to make data-based decisions that optimize training initiatives and improve employee development.

Talent development:

Thirty-six percent of HR leaders say they don’t have the resources to recruit top talent. Talent development can be much improved by HR analytics that analyze performance data, identify high-potential employees, and assess succession planning needs, putting organizations in a better position to make data-driven choices—ones that help identify and retain top talent.

Performance management:

At least 80% of businesses use HR software for tracking employee performance. Analyzing performance data, identifying trends, and providing actionable insights that help businesses improve performance, set realistic goals, and provide targeted coaching and development opportunities are just a few of the many ways in which HR analytics can give performance management a needed boost. 

HR analytics in action

Fact: more and more small businesses are turning to HR analytics to drive positive outcomes in their organizations and improve overall business results. 

Here are a few notable examples: 


Blueboard is an employee rewards and recognition company that has harnessed HR analytics to measure employee engagement, satisfaction, and performance, allowing them to identify areas for improvement and tailor their rewards programs to drive better business results. 


Software company Databox has implemented HR analytics to track employee productivity and performance, enabling them to identify top performers, optimize team structures, and allocate resources effectively to drive improved business outcomes. 

Wave Financial:

Canadian financial software company Wave Financial has utilized HR analytics to analyze employee data and identify trends related to security, productivity, performance, and skill development, enabling them to improve fraud prevention, resource allocation, training initiatives, and performance improvement strategies. The result: better business, of course. 

Bottom line: truly understanding the numbers behind your human resources lets you make much more informed decisions—leaving zero room for HR hocus-pocus, and freeing up ample time for big-picture tasks like growing the business.  


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