How to retain your employees with people analytics

Employee retention isn't just a warm and fuzzy HR concept—it's critical to a company's organizational health and bottom line. 

Tenured employees form the backbone of organizational memory, contributing to continuity, culture, and experience. Moreover, retaining your top talent means you reduce the significant time and financial costs associated with hiring new team members—according to the Work Institute, replacing an employee can cost 33% of their annual salary, while the Society for Human Resource Management (SHRM) estimates that the average cost per hire is over $4,000, considering the hiring process, training, and the lost productivity in between.

While traditional HR methods provide some insight into employee retention, it's HR and data analytics that are changing the game. Enter people analytics: a data-driven approach that digs deeper than traditional methods, helping businesses pinpoint issues at their roots and turn HR insights into actionable retention strategies.

In this guide, we'll cover the basics of using people analytics to improve your company's employee retention strategies, from metrics to follow to specific reports you need. Read on to learn more.

What causes employee turnover?

Many factors can drive employee turnover. Some examples include:

• Role scoping: Are roles properly leveled, with clear expectations set from the start? During hiring, are managers discerning not only the fit of a candidate's skills but also their alignment with the company's culture and values?
• Job satisfaction: How satisfied are employees with their jobs? Job satisfaction plays a pivotal role in employee retention. An employee who feels unfulfilled, undervalued, or overworked may start considering greener pastures. 
• Communication from management: Equally important is the clarity and frequency of communication from management. Are employees in the loop on business decisions, or do they feel left in the dark? 
• Clear growth path: When employees struggle to see a growth path for the company but also for their own careers—particularly in businesses where diversity, equity, and inclusion commitments fall short—it can hasten departures.

Despite the myriad of potential reasons for turnover, it's crucial to understand that these are mere assumptions until backed up by concrete data. This is where people analytics help companies dive deep, analyzing patterns and providing actionable insights.

How can people analytics improve employee retention?

Businesses are now armed with more tools than ever to make informed decisions. Instead of merely relying on gut instinct or anecdotes (or gazing into a crystal ball), HR professionals and leaders can utilize people analytics to make data-driven decisions. At its core, people analytics is the marriage of traditional HR practices with a rigorous, data-driven approach. By analyzing employee data, from onboarding feedback to exit interviews and even daily interactions, companies can pinpoint areas of concern with newfound precision. 

For example, let’s say your company sees a spike in turnover in a specific department after a change in management. People analytics could help highlight the correlation. Similarly, metrics can help put quantifiable figures to things like employee engagement and job satisfaction—and even predict which top performers might be at a "flight risk."

Challenges to using people analytics to improve employee retention

However, as with most transformative tools, there are challenges to its adoption. A primary hurdle many companies face is data dispersion. Essential employee data is often scattered across multiple systems—from HR platforms to project management tools and communication channels. 

This decentralized structure poses a significant barrier to using people analytics effectively. By collating these scattered datasets, companies can begin to understand patterns, like employee attrition, and apply predictive analytics and machine learning to forecast trends and take proactive measures. By leveraging these insights, you can form a solid workforce planning strategy and tackle attrition head-on.

But the potential is clear. When properly leveraged, people analytics can decode the nuances of employee experience, providing actionable insights to boost retention. Instead of reacting to turnover, companies can now be proactive, addressing concerns before they snowball and ensuring their top talent feels recognized, valued, and eager to stay.

Key metrics to track

To transform people analytics data into actionable insights, knowing which metrics to monitor is crucial. These key indicators can shine a light on potential issues before they escalate, allowing for timely interventions. Here are some questions to consider when using people analytics to improve employee retention—plus the metrics you can track to help answer each one.

Is your onboarding process effective?

The onboarding process and an employee’s initial months at a company can significantly influence their tenure.

• Onboarding feedback: New employees can provide invaluable feedback on the onboarding process. This data can highlight areas for improvement and ensure that new hires feel welcomed and equipped to succeed.
• Onboarding satisfaction score: Measure how new hires perceive their integration into the company. A low score may hint at gaps in the onboarding process that need attention.
• Time to productivity: How long does it take for new employees to become fully productive in their roles? Extended periods may indicate gaps in training or resource allocation.

How engaged are your employees?

Employee engagement is a crucial driver of retention. Employees who are invested in their roles and the company's mission are more likely to stay.

• Employee engagement score: This score, typically derived from regular employee surveys, measures the enthusiasm, commitment, and emotional connection employees have to their roles and the company. A high score can indicate satisfied employees, while a dip might signal underlying issues.
• Feedback and suggestion implementation rate: How often does your company act upon employee feedback and suggestions? A proactive approach can boost morale and reduce turnover.
• Employee net promoter score (eNPS): This metric gauges how likely employees are to recommend the company as a great place to work. It offers insights into the overall employee experience and job satisfaction.

Are employees seeing growth and development?

Career growth and development opportunities are pivotal in retaining talent. Employees who feel stagnant or believe they're in a dead-end job are more likely to search for other opportunities.

• Professional development initiatives: Tracking the number of employees enrolled in professional development programs or using allocated learning budgets can indicate how actively they are seeking growth within the company. A low uptake might hint at a lack of awareness or inadequate programs.
• Promotion rate: Monitoring how often employees are promoted or given more responsibilities can be a good indicator of growth within the organization. If the rate is low, it may mean employees are not seeing enough opportunities for advancement.
• Skills gap analysis: Regularly conducting a skills gap analysis helps understand employees’ training needs. If gaps are frequently identified but not addressed, it can lead to employee dissatisfaction and turnover.
• Feedback on employee training programs: Collecting feedback on in-house training programs or workshops provides insights into their effectiveness. Positive feedback signals that employees value the growth opportunities, while negative feedback can highlight areas for improvement.

Are there trends in employee turnover?

Understanding the patterns and reasons behind employee turnover can guide targeted retention initiatives.

• Voluntary turnover rate: This metric focuses on employees who leave the organization of their own accord. A high rate could signal issues in work-life balance, work environment, or other factors.
• Exit interview data: Exit interviews offer a wealth of information about why employees leave. This data, analyzed properly, can reveal patterns and areas that require attention.

Who are your top performers?

Recognizing and retaining top talent is essential for maintaining a company's competitive edge.

• Performance metrics: Regular evaluations can identify top performers, helping HR teams and managers provide necessary incentives, rewards, and growth opportunities to keep them motivated.
• Flight risk analysis: Using predictive analytics and HR data, companies can predict which top performers are most likely to leave. This allows for preemptive action to retain such talent.

Incorporating these metrics into your retention strategies and making data-driven decisions can be game-changing. Workforce management tools like Rippling put all your employee data in one unified reporting system, so you can easily build and visualize any report you want.

How Rippling makes HR reporting simple

With so much valuable employee data to track—and so many valuable insights that can be gleaned from it—HR professionals need Rippling. 

Rippling can bring every piece of employee data scattered across your HR, IT, Finance, and third-party systems into one unified platform, making it easier than ever to keep tabs on employee turnover by tracking important people analytics metrics. No more exporting data from five different systems into Excel to get the people analytics metrics you need. With Rippling, they’re all in one system, so all it takes is a few clicks to access the exact data you want.

You’ll also have no more need for canned reports and unwieldy spreadsheets. You can use Rippling’s report templates out of the box or tweak them to meet your exact needs.

Data aggregation has never been easier—you can make powerful calculations based on any field. Just group a report by variables, and Rippling will do the math for you. 

Not only can you report on recent data, but you can also visualize trends over time—exactly what you need to stop attrition in its tracks.

When you want to keep your organization healthy and thriving, that means taking swift, decisive action to stop employee turnover. But the only way to do that is to know when attrition is a problem, and that means staying on top of HR data and people analytics. Unify your data and see the reports you want—when you want them—with Rippling.

Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.