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Workforce Analytics: Examples, Benefits, and Trends

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May 21, 2021

What is workforce analytics?

Workforce analytics refers to the process of collecting workforce-related data types, both from internal and external sources, analyzing them, and turning these insights into actionable information. It uses data and statistical models to analyze employee-related data and employee performance. As opposed to people analytics, workforce analytics take a broader perspective on work in general instead of focusing solely on the people.

Today’s business environment is more dynamic and competitive than ever. To keep up with increasing demands, firms need to update their business strategy to leverage the power of technology. As a result, more and more businesses choose to implement workforce analytics to achieve their strategic objectives. As research keeps proving that companies that implement data-driven decision-making are more efficient and profitable than their competitors, it is essential to understand what workforce analytics is, its benefits, and its importance.

Many businesses collect impressive amounts of data which can be nearly difficult to organize or interpret. Put another way, workforce analytics refers to collecting this information, organizing it, and turning it into data that can be harnessed to enhance workforce decisions. This process helps to improve business and workforce performance using statistical tools and software.

Essentially, workforce analytics collects all workforce-related data types from internal and external sources, analyzes them, and turns them into actionable information. Then, HR professionals can make data-driven decisions related to employees, including recruitment, training, employee performance, turnover, and many more.

Workforce analytics vs HR analytics

Workforce analytics is more evolved than HR analytics software. It has a larger scope, so you can use it to improve your team at an individual level, collective, and even boost the entire firm’s productivity and operational efficiency. One of the primary purposes of leveraging workforce analytics is to improve the retention rate of top-performing employees.

Workforce analytics is linked to other HR analytics areas, such as performance management. However, the main difference between different types of HR analytics and workforce analytics is the macro focus of the latter one. In other words, workforce analytics consists of firm-wide insights into the workforce.

The importance of workforce analytics

As briefly mentioned above, workforce analytics aims to aid macro-level planning to improve business operations and performance. Apart from these benefits related to saving time and expenses, the importance of workforce analytics also refers to intangible aspects, including creating a cohesive team and improvements in the corporate culture.

For instance, workforce analytics can be used to improve the retention rate of top-performing employees. This ensures better business performance since a top-performing team is more efficient. This also helps managers identify what attracts an efficient workforce to craft suitable strategies to motivate employees, enhance job satisfaction, and more. 

How to apply workforce analytics

Workforce analytics uses historical data collected by your organization to improve financial performance and optimize operations. There are different software solutions and statistical tools to achieve this, but the basic steps of the process are similar:

  1. Identify a problem or question you want to address.
  2. According to the problem or question, decide what data would help you address it.
  3. Build a workforce analytics dashboard.
  4. Find a relevant objective or benchmark to compare your results.
  5. Decide on the right analysis method and report your results.

Workforce analytics examples

Let’s assume that you are a business manager who wants to know if highly trained employees exhibit improved employee engagement. The next step would be to identify what information you need to measure this; in this case, you should get access to the relationship between your two variables, training completion data and employee survey results.

Comparing your results with benchmarks (other historical results or the completion of training courses), you need to collect and analyze the employee data from all of your company’s departments. One of the main workforce analytics data analysis methods, in this case, would be a correlation analysis between employee satisfaction and the training completion rate. This would help you identify whether highly trained employees are more satisfied compared to employees who did not do or successfully finish their training sessions.

Another example would be to identify potential red flags regarding employee turnover. Let’s assume you can analyze whether social engagement, promotion history, salary, and job role affect employee turnover. Using an algorithm, you would be able to know which one of these factors you need to address to enhance the employee retention rate.

The benefits of workforce analytics

As explored in the previous sections, workforce analytics comes with company-wide benefits because of its large scope. Some of the main benefits include:

  • Decreased retention rate by identifying turnover triggers, such as lack of training, lack of promotion opportunities, and more.
  • Learn which recruitment strategies are efficient.
  • Find areas where labor costs can be decreased by implementing more efficient processes.
  • Predict the required future workforce by having an insight into the turnover rate.
  • Optimize and improve employee experience and satisfaction.
  • Improve the overall business performance through HR-related actions, such as identifying and retaining top-performing talent.

There are also numerous benefits of workforce analytics for your team. You can improve the work culture and environment by offering them better-suited training, granular feedback to help them improve work performance and access promotion opportunities, and empower employees to have a more significant contribution to your firm’s objectives.

Workforce analytics tools and software

There are numerous workforce analytics software solutions that use employee-related information to allow business leaders to improve their HR operations. Workforce analytics tools allow you to analyze data using statistical methods, turning it into actionable insights. These tools and software are used to improve your hiring abilities, retention rate, optimize the workforce, and more.

Workforce analytics software consists of machine learning and artificial intelligence that helps you generate rich, predictive insights for improvement and optimization. There are numerous software solutions on the market, but most of them have several basic functions:

  • Automated data collection and analysis
  • Predictive analysis results (for macro-level planning)
  • Benchmarking for efficient and accurate comparison
  • Reporting and data management

Predictive workforce analytics

One of the main types of workforce analytics is known as predictive workforce analytics. This refers to conducting workforce analytics to make predictions so you can forecast using historical information. The main statistical models used in this type of workforce analytics are machine learning and data mining.

Predictive workforce analytics is used by numerous businesses to improve employee experience and optimize their processes. It is often conducted via regression analysis, pattern matching, multivariate statistics, among other methods that help firms understand what is likely to happen in the future, both in terms of risks and talent outcomes.

Apart from predictive analytics, business leaders also employ prescriptive analytics and diagnostic analytics. The first one uses the same data as predictive workforce analytics, namely historical data. The difference is that prescriptive analytics is used to plan the best course of action after you conducted predictive workforce analytics to make forecasts. In other words, it is seen as the next step to find ways of mitigating challenges and addressing workforce issues. The main purpose, as a result, is to ensure that you meet your desired objectives.

Diagnostic analytics is a past-looking method of identifying the causes of your workforce failure or success. This is also extremely important for businesses because it can show you clear workforce trends, so you can then leverage this information to optimize your business performance.

Workforce analytics trends for 2021

Did you know that about 80% of executives in the healthcare industry stated that their investments in big data have been worthwhile? More than half also mentioned that their firms successfully measure the benefits from these investments. In addition to this, research also shows that 37% of HR managers make data-driven decisions. As a result, it is safe to predict that modern workforce analytics is quickly being adopted by more and more businesses across all industries. The following trends will show you how is workforce analytics evolving.

The main trends for 2021 include:

  • Mass adoption of AI-powered systems to improve the candidate experience, including chatbots, recruitment automation tools, and even screening tools.
  • An increasing role of the HR department for the company’s performance. In other words, firms must adopt a data-driven approach to remain competitive and successful, including workforce analytics to identify skill gaps, future workforce demand, and more.
  • The increasing competition across all industries requires firms to strengthen their long-term talent planning strategies. HR managers using workforce analytics will be able to accurately predict expertise demand, cut labor costs, and optimize the data-driven recruitment process for many years to come.


All in all, business leaders now have access to abundant information. The large amounts of data make it difficult to collect and analyze, which is why numerous firms now use workforce analytics projects to collect, organize, and extract actionable insights regarding their employees. Data-driven decisions help to make the business outcomes more efficient and improve its performance in the long run.

Frequently asked questions

What is workforce analysis?

Workforce analysis refers to collecting and analyzing employee-related information to make business-wide decisions. This approach helps you improve talent management abilities, cut down labor costs, improve the recruitment process, and lower the turnover rate, among others.

How do you perform a workforce analysis?

Many software solutions and tools on the market provide companies with automated workforce analytics tools. However, before conducting an analysis, companies must identify an objective, problem, or question they want to address using workforce analysis software.

Why is workforce data analysis important?

Workforce analytics is important because it aims to better understand a company’s workforce retention, what characteristics top-performing employees have, the type of training with the highest efficiency rate, and even which areas could be improved to cut labor costs. These insights can increase ROI, reduce costs, enhance a company’s competitive advantage, and help businesses become more efficient.

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