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How HR Analytics Can Benefit Small Businesses


One of the biggest trends in business over the last few years has been the rise of data-driven HR. While most other functions have been using data and analytics for years, HR only recently moved to this approach.

Collecting and analyzing data can help in various areas of HR – from spotting employee trends over time to improving recruiting practices and strategies.

While some small and medium-sized business (SMB) owners may think that HR analytics can only benefit larger organizations, this is not the case.

SMBs, too, can gain significant business advantages and success by implementing HR analytics into their business strategy. There are countless examples and areas where HR and people analytics can be used to benefit both employers and employees.

Let’s take a look at a few ways HR analytics can help small employers.


Learning and development (L&D) is an employee perk that is becoming increasingly more important for job seekers, current workers, and employers alike. An engaging L&D program plays an important role in recruiting and retention, which has major implications for a business.

However, even large companies struggle at times to quantify how well their Learning and Development strategies are performing.

This is where collecting, measuring, and analyzing L&D data can be extremely beneficial. Not only can HR analytics help to identify the right courses for a workforce, but they can also help to uncover the number of employees who are taking and completing various courses (as well as those who aren’t, and even the reasons for low engagement!).

Additionally, analytics can make it easier to analyze costs and expenses, which can help to guide an overall L&D strategy moving forward.


Arguably the most important impact data and analytics has for businesses is the ability to identify trends over time – both in the short and long term.

HR is no exception for the importance of trends, as they can be extremely helpful for both employers and employees. Tracking certain people analytics can help to show trends in employee sentiment, happiness, productivity, engagement, and morale just to name a few.

By collecting data over time, employers and small business owners can begin to see trends in their workplace. For example, perhaps a certain time of the year causes employees more stress, which negatively impacts productivity.

Being able to identify a trend such as this and put efforts in place to address it can help businesses resolve workplace issues, improve employee happiness and productivity, and achieve greater business success.


One very critical area of HR is recruiting and talent acquisition. In recent years, data-driven recruiting has become an increasingly popular practice.

There are countless examples of recruiting metrics – such as quality of hire and time-to-fill – that are important for employers both big and small to track to see how well recruiting is performing.

By collecting and interpreting recruiting data, employers increase the likelihood of hiring the best talent for their organization, and avoid making a bad hire (which can cost a lot of money for a business).

Recruiting is still one of the biggest challenges facing businesses today, and employers are looking for ways to improve their overall results. Moving to a data-driven approach can help to ensure higher-quality hires, while also identifying areas of the hiring process that may be hindering conversions numbers.

Addressing these – and other – areas can help to make recruiting a competitive advantage for any business, and moving to a data-driven approach can help make it happen.


A few years ago, almost all companies were focusing significant amounts of time and resources to improve employee engagement. It was seen as a way to boost productivity, happiness, and ultimately business success.

While increasing engagement is still important, and HR analytics can assist with these initiatives, many employers today are instead looking to address the employee experience.

We have written about employee experience and why it is important for employers today. Using HR and people analytics to identify ways to improve this important employee trend can help a company is many ways.

One-way employers can use data to help the employee experience is to create, send, and analyze employee surveys. These tools can help business owners address areas of concern that can negatively impact the employee experience.

Doing so can lead to improved engagement, happiness, productivity, and much more – all of which are critical to the overall employee experience.

This is yet another key area where HR and people analytics can help a small or medium-sized business.


We have already discussed the importance of recruiting and the challenges associated with it today. Two more things that go hand-in-hand with talent acquisition are employee retention and turnover.

Hiring the perfect candidate is only the first part of the process – it’s then up to the employer to ensure that they stay happy and engaged in their role.

Failing to do so can easily lead a high-performer to leave the organization and join another company, which lowers retention.

Keeping track of data and analytics around retention and turnover can help employers understand the drivers that cause a great employee to leave, which can enable business owners to address and correct these issues.

Doing this can save an employer a lot of money, and prevent disruptions to a business that occurs when an employee leaves.

Losing a top employee can be devastating, especially for small businesses. Using HR analytics can help identify reasons for employee turnover, which can then be fixed to prevent further employees from leaving the organization.


As the business world has changed over the last several years, data-driven HR and recruiting has become more prominent – and not just at smaller companies.

SMBs, too, can take advantage of some HR analytics to help improve their business and increase the experience of employees. This can help lower turnover, increase retention, improve hiring, and ultimately lead to business growth.

HR and people analytics may seem like a daunting task, but starting small can eventually lead to numerous benefits for SMBs.

Stay tuned in the coming weeks for a follow-up article where we go in detail about some specific HR and recruiting metrics that can be valuable for small employers!

Want to learn more about PEOs? Check out our eBook, How Well Do You Know PEO? This eBook provides an overview of the PEO industry as well as helpful information for brokers and employers!

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