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Employee turnover rates have been holding steady in 2025, yet companies still struggle with employee engagement and retention. One tool to help address these issues is people analytics.
With the labor market seeing less turnover than in the past few years, companies have an opportunity to learn more about what employees need and want to thrive at work, said Ashley Avanzato, vice president of human resources at ADP. The right engagement strategies drive productivity, employee growth and potentially inspire retention.
That starts with understanding how they perform and what their goals are, which is where people analytics comes into play. People analytics technology collects and analyzes a variety of HR data and then uses that data to better manage and improve experiences for people.
Here’s what to know about how people analytics can help predict turnover and boost retention.
Why Employee Turnover and Retention Remains a Concern
A company’s most important (and most expensive) asset is its people, said Craig Starbuck, president of the Society for People Analytics. “Companies spend a lot of time, a lot of money, a lot of resources in hiring the best and brightest talent they can find. It’s very expensive to lose those people.”
In 2022, the Society for Human Resource Management estimated the total cost of hiring a new employee to be three to four times the role’s salary, averaging about $4,700.
The labor market is also tight right now, so holding onto your people is crucial, added Richard Rosenow, vice president of people analytics strategy at One Model.
“The people you have today matter a lot,” Rosenow continued. “We're not in that era where you can just find someone off the streets to replace a highly specialized, highly skilled individual on your team.”
However, worker engagement hit a 10-year low last year when only a third of employees said they’re engaged with their jobs, according to Gallup. A separate Gallup report from 2024 found that employee turnover is often preventable — 42% of employees who voluntarily left their jobs said the organization could have done something to prevent their quitting.
People analytics technology can uncover some of those problems and possibly predict which employees may be more likely to leave, Rosenow said.
4 Ways to Use People Analytics to Predict Turnover and Retention
People analytics can tell organizations a lot about turnover and retention. However, a successful program depends on several factors. Here are some ways to get the most value from people analytics:
Understand Turnover in Your Org
Understanding your organization’s turnover is a crucial first step, Rosenow said. “A lot of companies out there don't quite have a grip on what’s going on when it comes to who left the company, when did they leave, why did they leave?”
Start by identifying voluntary and involuntary turnover, which often provides details about the employees you wished had stayed, he suggested.
Then, note which company departments or locations have the most turnover, Starbuck added. For instance, if finance is a turnover hotspot, work closely with finance leaders and HR to understand the context of the problem and guide the direction of an analysis.
“Otherwise, it's reduced to a data mining expedition, and we're just throwing spaghetti at the wall to see what sticks,” he said. “Sometimes spaghetti sticks, and it's just kind of a random chance observation and not something that's like materially useful in influencing churn.”
Integrate Employee Listening
A continuous employee listening process, where you keep tabs on behaviors and sentiments and maintain an open dialogue with employees, is an important complement to people analytics, Starbuck said. You can do this through employee surveys or interviews where you simply ask people how long they plan to stay at the company and details about what they like and dislike about their job.
“You can capture what people say and then, through people analytics, capture what they do and connect the dots,” he explained. Organizations can use this information to predict behaviors, like attrition, as well as to make changes or offer support to employees.
Exit interviews can provide insight into why people leave organizations, which Starbuck said leaders can use to solve problems and prevent future attrition.
People analytics teams should also build relationships with leaders throughout a company. These individuals usually have ideas about what’s going on within an organization that’s leading people to leave, he added.
Collect and Use High-Quality Data to Drive Decisions
“Good data is everything,” Rosenow said. Without it, people analytics likely won’t provide valuable insights that organizations can use to improve turnover rates and retain employees.
An effective people analytics strategy should combine a variety of data sources, including HR systems, employee surveys, performance evaluations, employee benefits, turnover rates and employee demographics, he explained. Organizations also need specific processes for collecting this data consistently and accurately.
“To do a really good turnover analysis, you need to have HR strategy that's in place, you need an HR operations team, you need your HR tech team working properly, you need to get the data, and then you can do really good analytics,” Rosenow said.
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One challenge is that data may contain errors or inconsistencies, which affects the analysis, Starbuck said. So companies should also incorporate data governance (whether it’s a human-centric process or part of a people analytics tool) that helps validate and clean up the data to ensure its high quality.
This will enable an accurate analysis to identify patterns and trends that companies can use to make decisions to reduce turnover and boost retention, Rosenow added.
Don’t Skip the Human Element
People analytics involves troves of data and technology, but organizations must also “actually talk to people,” Rosenow said. “If you want to know why attrition is happening or retention is happening, you can’t just do it from numbers.”
Data only tell part of the story. Avanzato said data helps leaders start one-on-one conversations with employees but doesn’t necessarily reveal an employee’s ambitions or engagement.
HR leaders need to “add to the voice of the data” by talking to employees and their managers to find out what’s making them want to leave or stay — and how organizations can help them reach their goals, such as by offering more professional development opportunities, Rosenow added.
“It always comes back to the human element,” Avanzato said. “There have been times in my career where I have data that I think tells me one story about an employee, but when I have a conversation with them or with their supervisor, I learn something new.”
Editor's Note: Read other coverage of people analytics below:
- What 2025 Has in Store for People Analytics — People analytics is a powerful space that can transform organizations. But knowing how to use it remains key to success.
- Generative AI Is Shaking Up People Analytics. 4 Use Cases — Generative AI promises to shake up HR. Some of its early use cases are turning up in the world of people analytics.
- Is People Analytics the Next Job to Be Outsourced to Technology? — Global industry analyst Josh Bersin on what’s gone wrong with and how to improve what should be a thriving, data-driven part of modern business.
