Impact of HR Analytics Tools & HR Metrics

HR Analytics Tools
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What is HR analytics?

HR analytics is a data-driven approach to human resource management. HR analytics tools help measure the impact of various HR metrics and make the right decisions based on the data. HR analytics is also known as people analytics or workforce analytics.
People analytics empowers human resource decisions with a strategic approach for the processes. HR analytics tools provide valuable insight into the various human recourse tasks and responsibilities. That helps organisations to make informed decisions to improve operations further. However, to use the data that HR collects continuously, you need to combine a different set of data analytics and make it comprehensive.
It may seem easy to gather data from the workplace on various aspects of work and productivity. However, raw data need to be processed and analysed to derive conclusions or insights from it. Numbers don’t convey much if not arranged and processed in the best way.
HR analytics aims to improve the organisation’s performance and achieve business goals. That way, you can analyse how HR processes contribute to the firm’s growth. For example, HR analytics gives you reasons for the high turnover or low employee productivity. Using such information, a better and more effective HR strategy can be designed and implemented.

Also Read: 4 Key Metrics HR Managers Cannot Afford to Ignore Anymore!


Benefits of HR Analytics Tools

  • The company can take the data-backed informed decisions instead of relying on general guessing work. This improves the accuracy of the findings and brings in better results.
  • The analytics of the employee behaviour can help you design a better employee engagement strategy and increase productivity. It also contributes to better work culture and job satisfaction.
  • Employee retention can go significantly high once you understand the reasons behind the employee turnover and work on it to find solutions to the challenges.
  • Repetitive trends and patterns in the employee data help companies to plan the workforce intelligently. Forecasting becomes easier through predictive analytics.
  • Employee engagement can be improved by analysing data about employee behaviour, such as how they work with co-workers and customers. You can improve processes and work environments accordingly.
  • Trends and patterns in HR data can be used in forecasting via predictive analytics, enabling organisations to be proactive in maintaining a productive workforce.
  • Data and HR analytics tools help better understand the skill requirement and hire the right candidate for your company.
  • The data that HR gathers can support various organisation decisions when processed and analysed.
  • It can measure the impact of various policies and organisational changes being implemented. 


How can HR metrics be measured with the HR analytics tools?

There is a connection between various metrics that can be analysed with the help of HR tools and the organisation’s productivity. Understanding these metrics can save the company a lot of costs.
Let’s Discus some standard metrics that can be analysed with HR analytics tools.

Voluntary Turnover Rate

The voluntary turnover rate is the ratio between the number of employees that leave the company voluntarily during a particular period and the total number of employees in the company. The voluntary turnover rate, if increased over time, indicates decreased employee engagement. HR analytics tools can help you identify this rate at a different level in the organisation and resolve the issues before they get out of control.
Organisations with higher employee turnover experience instability in the workforce. There are more costs in hiring new employees, training and onboarding new employees. This also affects the stress level of the employees that stick with the company.
Higher employee turnover means there are vacant positions and others have to work extra to make up for it. Due to further loss of work-life balance company can lose these loyal employees. That is why you need HR analytics tools that help you identify the issues at the early stages and implement the changes.

Revenue Per Employee

The revenue per employee helps to understand the average efficiency of the employees in the company. To obtain these metrics, we divide the company’s total revenue by the total number of employees. Revenue per employee indicates if employees in the companies are performing with the expected efficiency.
You can use these metrics to hire the workforce according to the need of the company. It also makes it easy for you to identify the situation where you might be facing the challenge of overstaffing or understaffing. Once you get the right picture of the revenue per employee, you can find out and work on the issues responsible for lower per employee revenue. Gaining insight into the right workforce requirements also helps lower the company’s hiring cost and effort.

Also Read: Importance Of Analytics In Employee Management


Involuntary Turnover Rate

The involuntary turnover rate is the ratio of the employees that have to leave the company on an involuntary basis and the total number of employees. The primary reason for involuntary turnover is the bad hire.
When the wrong person is hired in the position, they do not give the expected performance, and the company has to let them go to stop further loss of productivity. That again leads to repeated hiring and recruitment, which need additional time and cost to be invested. HR analytics tools can identify the higher involuntary turnover rate. Taking this indication, you can work on the hiring strategy to make it more suitable for your hiring roles.

Offer Acceptance Rate

The offer acceptance rate is one of the most critical metrics during recruitment and talent acquisition. All the best HR analytics software in the industry will help you calculate and analyse these metrics. The offer acceptance rate is calculated by dividing the total formal offers extended from the company by the total number of accepted offers by the employee.
People analytics software, also known as an HR analytics tool, is very helpful regarding the acceptance rate. If you observe a low acceptance rate, there can be a lack of good employment branding and poor compensation management.
Companies that want to get the top talent in the workforce should pay attention to the key features acting for acceptance or rejection of the offer. With various analytics tools, it becomes easy for HR to figure out how they can improve the company’s talent acquisition and recruitment strategies.

Training Efficiency

As it appears, it will require different data sets for you to calculate the training efficiency. As you need to consider a massive amount of data, you can utilise a tool for HR analytics to get these metrics quickly. It’s a crucial metric to measure the effectiveness of the training efforts by the organisation.
The calculation requires data points such as training test scores, performance improvement, and growth of employees’ careers in the company after training. The expense of the per-employee training won’t mean much if you don’t work to improve the training efficiency score of your company.


Absenteeism is a productivity metric and one of the best indicators of employee engagement. HR analytics software can help you calculate absenteeism at the organisation. Absenteeism is also a factor that directly impacts the company’s bottom line. With the help of the software, you can calculate absenteeism in a few seconds. Absenteeism is a ratio of the number of missed days of work and the total number of official working days.
It is a simple task for HR analytics software to use the available people data and find the current rate of absenteeism in the company. There can be a variety of sets of reasons that lead to absenteeism. As mentioned above, it is one of the prime indicators when it comes to employee engagement and satisfaction.
If you want to improve engagement at a workplace, you should use HR analytics software. That makes it easy to use and understand analytics to identify the most prominent reasons. A good level of employee satisfaction and low absenteeism is the best for both employees and the employer. This way, HR analytics is there to help you prevent productivity loss at your company.

Time to Fill

You can use the ‘time to fill’ a position as one of the simple recruitment metrics to understand the effectiveness of the recruitment strategy of an HR team. A metric here indicates the number of days taken from first posting a job requirement to the day of hiring a suitable candidate to fill the position. The simplicity of the data and calculation method does not mean you don’t need a tool for HR to manage it.
If you want to increase the company’s productivity, you should make it easy to use and analyse for HR with the help of the best HR software. Tools will help to identify the tasks and processes that are taking longer than expected in the recruitment and include ‘time to fill’ in the key features to design future recruitment strategies. This way, you can ensure that the posts are not kept vacant for a long time.

Also Read: 4 HR Analytics Terms Everyone Is Talking About


Human Capital Risk

HR has to deal with uncertainties when it comes to managing human resources as there is always some amount of uncertainty involved. HR analytics software will help get a better idea of critical metrics such as human capital risk. This includes factors such as described below.

  • Lack of Skillset

The risk is that the candidate you are hiring may not have the skills they need to do their job. You can analyse the skill requirements of the firm in advance to avoid such a situation.


  • Leadership Scarcity

The leadership at any organisation is very important for the company to achieve its goals and objectives. The skillset that is required for leadership roles differs from the requirements for most other job profiles at any company. When there is a lack of human capital strategy, a firm may suddenly feel a void in the leadership positions when someone steps down from their post.
Keeping the leadership positions vacant for a long time can adversely affect the company’s productivity. HR and the management should prepare for such a situation in advance. HR analytics tools help identify these gaps, so you should work on talent development in advance.

  • Employee Leaving

Based on various factors such as employees’ relationships with their managers, colleague, compensation, and many such factors, HR analytics tools can predict the possibility of an employee leaving a company. That helps HR to plan for it advance and ensure maintaining the necessary amount of workforce.
With all these metrics, HR analytics tools help you maintain and improve your company’s productivity.


HR analytics is a strategic approach to human resource management and empowers departments with data analysis. A set of data can’t always provide you with any valuable insight on its own. The HR analytics use the people data to measure various HR metrics. Using different HR metrics, you can identify the HR strategies’ effectiveness. Gauging the performance of the HR initiatives makes it easy to understand the challenges as they arrive and improve the strategy for a better future of the organization.


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