Too many organizations rely more on instinct than evidence when it comes to HR decisions, especially at smaller firms that may not have in-house HR staff at all.
A business owner or hiring manager might have a "good feeling" about a candidate. A supervisor might “guess” that turnover in her department seems a little high lately. A benefits manager might “sense” that employees seem less engaged. Certainly, once upon a time, companies had little alternative but to follow their gut instincts, but today’s business environment is data-driven, and most firms have all the HR data they need to make evidence-backed, outcome-oriented decisions.
Indeed, the rise of HR analytics is transforming how organizations approach workforce decisions altogether, from hiring and retention to engagement and performance management, offering organizations actionable insights that once seemed out of reach. “By studying scientifically, you can learn to cater resources to be much more beneficial,” Linda Nedelcoff, Executive Vice President, Chief Strategy and Human Resources Officer at CUNA Mutual Group, told the Society for Human Resource Management (SHRM) after her company implemented a workforce analytics program of their own.
In fact, the use of workforce analytics has grown dramatically in recent years. In 2019, fewer than half of organizations (48%) used talent data to guide HR decisions, according to industry analysis firm Gartner. Just four years later, that number had soared to 78%. In other words, this shift is no longer emerging; it has already become the new norm.
And the organizations leaning into data are seeing results: 71% of HR executives who use people analytics say it has become essential to their organization's HR strategy.
What makes this kind of analytics so powerful is its ability to turn raw HR data into meaningful, actionable insights. Rather than making assumptions and effectively turning every decision into little more than an experiment, companies can analyze patterns across their workforce to identify what’s genuinely happening. That insight empowers more targeted, effective interventions.
Take retention, for example. According to SHRM, this is an area primed for data: 82% of organizations using people analytics leverage it to address retention and turnover issues. After all, high turnover is costly and disruptive, but many organizations struggle to pinpoint why employees leave. With workforce analytics, companies can compare turnover rates across departments, roles, and tenure. They can identify whether certain managers or units have disproportionately high resignation rates, or whether turnover spikes after key events like performance reviews.
The subsequent benefits are real and measurable. SHRM also reports that 81% of organizations using HR analytics say they are competitive in the job market, compared to just 71% of those that don’t. Similarly, 60% say they are meeting their retention goals, versus only 46% of non-adopters. One organization, profiled by HR Executive, says using people analytics led to a 25% increase in retention and an 8% jump in employee engagement scores within a single year.
For many HR managers and operations leaders, the biggest barrier to embracing workforce analytics is quite simply overwhelm. They imagine vast datasets, complex statistical models, and a need for data scientists on staff.
The reality is far more accessible. Organizations can (and should) start small, focusing on a handful of simple but highly informative metrics. According to HR Dive, some of the most useful HR data points include:
Hiring metrics like qualified applicants per position and offer acceptance rates can help diagnose bottlenecks in recruiting. Retention metrics like high performer turnover rates reveal whether you're losing your most valuable employees. Engagement metrics such as eNPS shed light on workplace sentiment (here, employees rate how likely they are to recommend your organization as a place to work).
Even tracking hiring, pay equity, and promotion rates by demographic group can yield immediate insights into DEI (diversity, equity, and inclusion) gaps. For instance, CUNA Mutual Group discovered, through careful analysis, that candidates of color were applying later in the posting cycle than other candidates. That insight allowed them to adjust recruitment strategies to encourage earlier applications.
All that said, the best HR analytics strategy focuses not on collecting every piece of possible data, but on selecting metrics tied directly to business goals. For most organizations, that means prioritizing data that answers three critical questions:
At CoAdvantage, we understand that not every organization has a team of data scientists ready to build custom algorithms. That’s why we specialize in making HR analytics accessible, actionable, and scalable for small and mid-sized businesses.
Through our integrated platform and expert advisory services, we help clients:
Our clients don’t need to become analytics experts; they just need to be willing to ask better questions. For example, instead of wondering generally why turnover feels high, we help clients pinpoint exactly where resignations are happening, who is most at risk, and what interventions are likely to work best.
By combining robust workforce analytics with experienced HR consulting, CoAdvantage empowers organizations to make smarter, faster, more confident decisions, all without needing to hire a full-time data team.
The evidence is clear: smart use of HR analytics is the new standard. As the volume and sophistication of HR data continues to grow, organizations that embrace workforce analytics will enjoy a distinct competitive advantage.
Fortunately, the path forward doesn’t require perfection on day one. It requires a commitment to start somewhere: to track a few key metrics, to ask better questions, to test interventions, and to build from there. As more organizations discover, the real power of HR analytics is not just in the data itself, but in the smarter, more human-centered decisions it enables.
For operations leaders and HR managers looking to turn workforce data into action, the opportunity has never been greater, and CoAdvantage is ready to help.
**The information provided on this website is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and completeness of the information, we make no guarantees about its correctness, completeness, or applicability to your specific circumstances. Laws and regulations are subject to change, and you should consult a qualified legal professional before making any decisions based on the information provided here.