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How to Use Predictive Analytics Software for HR

6 min read

With the growing popularity of machine learning and artificial intelligence, more and more companies are seeing the benefits of using predictive analytics software for HR.

Solutions are used to gather and analyze historical data and anticipate the future behavior of employees, providing companies with valuable information. In fact, according to Deloitte, the focus is shifting from simply reporting data to enabling the business to make informed talent decisions, predict employee performance, and conduct advanced workforce planning.

In this post, we will share an in-depth guide to predictive HR analytics to help you get ahead of this growing trend. We will explain what it is and how you can use predictive workforce analytics to improve a range of HR functions in your company. We will also share a few examples to help you understand how some of the major brands in the world are using these tools to their advantage. 



What is Predictive Analytics Software for HR?

Predictive HR analytics is all about analyzing past and present people analytics data in order to identify patterns and make predictions about the future. The technique is an emerging but growing field that is helping organizations anticipate future behaviors and adapt their business strategies accordingly.

By studying data from HR report metrics, such as attrition rates, performance stats, and retention data, companies can use statistical modeling and machine learning methods to establish the probability of various scenarios and make informed decisions that facilitate planning and growth.

Predictive analytics software for HR is assisting with this and giving companies around the world a competitive advantage.

HR departments no longer need to rely on external consultants to review data and predict behaviors. Instead, they can compile meaningful data relating to the efficiency of current HR processes and policies and their impact on wellbeing, happiness, and bottom-line performance. This enables companies to improve the employee experience, increase retention levels, reduce turnover and improve overall engagement and productivity.

Predictive Analytics Examples

Many leading brands around the world are implementing solutions for predictive analytics software for HR in their businesses. Companies like Google have realized that by gathering and analyzing data they can engage, retain and ensure productivity from their people. 

Let’s take a look at a few real-life HR predictive analytics examples.

Credit Suisse: Reducing Employee Turnover 

Credit Suisse, a global investment bank based in Switzerland, used predictive analytics software to analyze their employee churn. Their aim was to identify why employees were quitting. The company’s HR department had already segmented leavers by demographics, performance ratings, and regions. They had also collected reasons for leaving during post-exit interviews. However, Credit Suisse wanted to take this a step further so that they could identify potential leavers before they made the decision to leave. 

The data they collected gave them valuable insight into the causes of voluntary attrition. Based on this data, they provided managers with specialized training on retaining high-performing employees who were likely to give notice. The bank saved an estimated $70,000,000 a year in recruiting and onboarding costs as a result of this initiative.

Nielsen: Reducing Attrition Rates

The data analytics firm also used predictive analytics software to analyze attrition rates. They did this because historic data suggested the company had an issue with retention. After analysis, Nielsen’s People Analytics team discovered that every one percentage point decrease in attrition resulted in a $5 million reduction of business cost.

The team was also able to identify 120 key individuals who were at risk of leaving. Based on these insights, the company was able to launch a number of initiatives that reduced the attrition rate to zero within six months, saving the global giant $10 million in recruitment and turnover costs.

Google: Predicting Hire Success

Google is a big fan of using AI in its recruitment and hiring processes. In fact, their interview process is fully automated, computer-generated, and fine-tuned in order to find the best candidate.

It doesn’t stop there, though. Google also uses HR predictive analysis to estimate the probability of people leaving the company. For example, one of the patterns the company has identified through predictive HR analytics is that new salespeople who do not get a promotion within four years are much more likely to leave the company.

What’s more, Google has developed an algorithm that predicts which employees are most likely to become a retention problem. This allows the company’s HR department to take action before it’s too late and keep turnover levels low.

How to Use Predictive Analytics Software for HR

Now let’s take a look at just a few of the ways you can use predictive analytics software for HR to drive continuous improvement in your business. 

Recruitment & Hiring 

Predictive HR analytics can improve your recruitment and hiring processes in a number of ways. You can use predictive modeling systems to source and locate talent based on labor market data. You can also use predictive analytics software to identify the skills and experience required for each position within your company. Plus, you can also use predictive data to screen applicants to help you filter your applicant pool efficiently.

Workforce Planning & Management 

Another key area where the right workforce analytics can help you succeed is staff planning and management. 

Data on employee preferences, skills, and aptitudes can help you align individuals with the right roles. It can also help you identify any skills gaps that need to be addressed. You can use data to identify potential leaders and strong/weak performers. Plus, predictive analytics can help you identify employees looking to make a move in their careers, helping you manage your workforce in the most efficient way. All this helps you boost productivity and predict future employee performance and engagement. 

Predicting Attrition Risk

The final, and perhaps most widespread, application of predictive HR analytics is predicting attrition rates. One way this is done is by analyzing responses to employee engagement questions in order to determine which employees are happy, and where there might be potential causes of high turnover rates. You can then use this data to redefine job roles and opportunities where needed. You can also approach employees with the potential for career development. 


Benefits of Predictive Analytics Software 

A people analytics platform can help you make better decisions based on the right KPI analytics. Firstly, you gain an understanding of how your employees work. Secondly, software solutions can help you predict and optimize the impact of your policies on both your employees and your business as a whole.

Here are some of the many benefits of using predictive analytics software for HR in your business:

  • Predictive analytics can dramatically improve attrition rates by measuring historical data to better predict turnover before it happens, helping to reduce labor costs.
  • Analyzing the right data can give you valuable insights into employee performance, progress and developmental needs. You can understand who is performing well, and who has the potential to improve with specific skill development. You can also use data to identify who is better positioned to take on more senior leadership roles. All this helps to boost overall productivity. 
  • The right software solution can help you track and measure engagement easier. You can monitor engagement and satisfaction levels, understand motivational needs and identify areas for improvement in your company’s culture.
  • Talent analytics platforms and pre-screening data can help you automate your recruitment and hiring processes. You can source and match candidates who would be a good fit for your organization’s culture. You can also create algorithms from unemployment rates, growth indices, GDP, and turnover. This helps you evaluate and anticipate future HR requirements.

Automatically Generate HR Analytics, Reports, and More

The most important factor when deciding on a solution is choosing the right predictive analytics software for HR. You need an employee analytics platform that helps you track, collect, interpret and analyze the right KPIs.

This will help you create effective benchmarks so that you can make well-informed decisions about your future business strategies. You also need a solution with a user-friendly HR dashboard and powerful capabilities so that you can manage every aspect of your growth. This will help you improve workforce productivity, retain employees, reduce turnover and ultimately create a healthy, motivated work environment.

With Factorial’s all-in-one software solution you can manage your business more effectively using reliable data sources. Our people management software provides you with access to a wealth of valuable data. Plus, you can manage your automatically generated HR reports straight from your reports dashboard. Factorial generates all the reports from the information already introduced by you and your employees, saving you time.

And that’s not all we’ve got for you. Our People Analytics eBook will help you to track important HR KPIs, prioritize tasks according to your goals, and maximize your workforce potential. Download our eBook to find out more about how you can leverage people analytics in your company. You can also use our free KPI Template to help you identify key performance indicators in your company. 

Everything you need to get you started with an effective predictive analytics model that gives you the right results!

Cat Symonds is a freelance writer, editor, and translator. Originally from Wales, she studied Spanish and French at the University of Swansea before moving to Barcelona where she lived and worked for 12 years. She has since relocated back to Wales where she continues to build her business, working with clients in Spain and the UK.  Cat is the founder of The Content CAT: Content And Translation, providing content development and translation services to her clients. She specializes in corporate blogs, articles of interest, ghostwriting, and translation (SP/FR/CA into EN), collaborating with a range of companies from a variety of business sectors. She also offers services to a number of NGOs including Oxfam Intermón, UNICEF, and Corporate Excellence - Centre for Reputation Leadership.  For more information or to contact Cat visit her website ( or send her a message through LinkedIn.

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