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What Is Workforce Analytics, and Why Do You Need It?

Without metrics to point you in the right direction, workforce decisions can take the form of educated guesses that don’t add up to a wider strategy. However, with workforce analytics and other data-driven solutions, you can use employee data to make better decisions about workforce management that will lead to more advantageous business outcomes.

But which workforce analytics tools should you use, and how do they fit into a broader digital transformation of your business?

Here’s what you need to know about workforce analytics software and the role it can play in workforce planning and human capital management.

What Is Workforce Analytics?

Workforce analytics is the process of using HR data to make better decisions related to recruitment, staffing, and employee engagement. It’s an ongoing process that involves collecting the right data, analyzing that data, and understanding the story it tells about your workforce and your business.

While human resource management has always included some form of data analysis — even of the pencil-and-paper variety — workforce analytics software takes it to the next level with expanded data collection and more comprehensive data-crunching.

For example, any old analysis could tell you your employee retention rate, but workforce analytics can help you understand the root cause of high employee turnover. Is it due to poor working conditions, insufficient training, or something else entirely? 

The predictive nature of workforce analytics means you can use it for problem-solving existing issues and for forecasting future workforce trends.

Benefits of Workforce Analytics

Workforce analytics can empower business leaders and HR departments to make better decisions in several key areas. The more thoroughly you analyze your people data, the more effectively you can plan ahead and improve business performance.

Here are three ways workforce analytics can have an impact:

Lower Costs

Workforce analytics can help you cut hiring costs by improving employee retention and reducing turnover. In addition to less time spent recruiting and training new employees, you can plan ahead to maintain appropriate staffing levels and avoid skill gaps.

Improved Performance

Use workforce analytics to develop performance management strategies that have a measurable impact on employee performance. You can also find ways to streamline workflows by identifying repetitive or recurring tasks that you can automate.

Competitive Edge

Using workforce analytics as part of your talent management strategy can improve the employee experience and make it easier to attract the top talent in your industry. That will give you an edge over other businesses that don’t make data-driven decisions.

Workforce Analytics vs. HR Analytics

Workforce analytics: colleagues using their phones

Workforce analytics often gets conflated with HR analytics, people analytics, and other similar solutions. Some HR professionals would say that HR analytics refers to the nuts and bolts of HR management — recruitment, staffing, etc. — and that people analytics takes a big-picture view that includes company culture and employee well-being.

But the truth is, there’s significant overlap between all these forms of workforce analysis. Ultimately, it’s what you choose to do with your workforce data that matters.

You can use workforce analytics to investigate employee productivity, roll out and measure the effects of a diversity and inclusion initiative, or identify a skill gap in your workforce. The purpose and scope of your workforce analytics solution is entirely up to you.

Types of Workforce Analytics

Workforce analysis can be broken down into three or four categories, depending on how you use it. Here are four of the most common ways to apply workforce analytics:


Descriptive analytics is all about gathering data and assessing information. Employee surveys, key performance indicators (KPIs), and other staffing and performance metrics can all form part of a descriptive analysis. You can use this type of analysis to give you a snapshot of your current state of affairs and to aid in decision-making.


Diagnostic analytics is focused on problem-solving. Although it may incorporate the same forms of data collection as descriptive analytics, it goes one step further and attempts to identify the source of a problem and provide solutions.

Instead of simply using a dashboard to monitor current workforce trends, you’ll dig deeper into historical data and find out the why behind the metrics.


Predictive analytics applies the power of machine learning to forecast future trends. It relies on a combination of historical data, statistical models, and other inputs to make informed predictions about future business performance. Use predictive analytics to anticipate staff turnover, future sales figures, customer support needs, and more. 


Prescriptive analytics may sound similar to predictive analytics, but it differs in a few key ways. Most critically, you can use it to assess the impact of specific actions, rather than general future trends. Lead scoring and fraud detention are examples of prescriptive analytics.

Use this form of workforce analytics to assist with succession planning and employee retention, and for other decision points in the employee lifecycle.

Examples of Workforce Analytics in Action

Workforce analytics may sound useful but can still be hard to imagine in action. Let’s take a look at a few ways this can directly impact your bottom line.

Example 1: Reducing Overtime Hours

Let’s say you’ve noticed an increase in expenses due to employees working overtime, and you want to know if it’s due to managerial decisions, understaffing, or something else. Workforce analytics can help you identify the cause and find a solution.

You might decide to revamp your leave of absence management strategy so you can better predict and accommodate absences without having to resort to paying employees for overtime.

Example 2: Talent Acquisition and Employee Retention

Employee surveys and exit interviews may give you some idea of why employees are leaving your company, but they may not tell the whole story. Workforce analytics tools can help you analyze your internal data alongside other industry statistics, such as salary benchmarks, employee satisfaction rates, diversity and workforce composition, and more.

Find out if employees are choosing to leave your company for other offers due to internal or external factors, and what steps you can take to improve the recruitment and onboarding process.

Example 3: Succession Planning 

Employee departures are inevitable, but they can still catch your team by surprise. Use predictive analytics to determine which senior employees are most likely to depart your workplace and which candidates are best suited to take on their roles.

Example 4: Performance Management

With workforce analysis at your disposal, performance management becomes more than a disciplinary process. Use it to help high-performing employees develop skills that will be in demand in the coming decades, and prepare them to step into key roles long before they need to.

Make Better Business Decisions With Workforce Analytics 

Colleagues using a tablet

Workforce analytics can help you make better business decisions by identifying trends in historical data sets, assessing current metrics, and predicting future outcomes. But to make the most of workforce analysis, you’ll need software that can collect and analyze your workforce data in real time and display the results in an accessible way.

Pulpstream makes it easy to bring your business into the digital age and break down data silos by digitizing and automating your HR workflows. Our cloud-based software combines the best of workforce management, employee engagement, and human resources management all in one place.

Use it to streamline your leave of absence approval process, benefits administration, and claims and incident management. The more HR processes you digitize, the more data you’ll have to inform your decision-making through workforce analytics.

Contact the team today to request a demo and learn more!