Securing budget for new HR technology often hinges on one question: What’s the return on investment?
People Analytics, while universally acknowledged as valuable, can still raise skepticism among finance teams or executives who want hard evidence that it will pay off. The good news is that a well-structured approach can deliver both financial and strategic returns, and People Analytics platforms like One Model offer clear proof points that help justify the spend.
Going Beyond “Nice-to-Have”
Historically, HR initiatives have been labeled as “soft” investments that are tough to measure in dollar terms. Yet turnover, engagement, and productivity each have a direct effect on the bottom line.
Consider the cost of replacing a mid-level employee—recruiting fees, onboarding expenses, and lost productivity can easily total 20% of that individual’s salary. By applying People Analytics to spot flight risks early and prioritize retention strategies, companies can significantly lower those replacement costs, creating a measurable impact executives can’t ignore.
Tying Metrics to Business Outcomes
Building a solid business case means linking your HR data to tangible business drivers:
- Reduced Turnover: If a department has a historically high churn rate, even a modest improvement can free up thousands—if not millions—of dollars annually.Here’s how to calculate turnover costs and their impact.
- Improved Productivity: Identifying the skills gaps causing performance issues can lead to targeted training programs that raise output and reduce error rates.
- Faster Hiring Cycles: A shorter time-to-fill for crucial roles means key projects don’t stall, potentially preserving revenue and customer satisfaction. Learn more about key People Analytics dashboards that visualize these metrics.
When you show how these metrics directly influence revenue, profitability, or operational efficiency, leadership is far more willing to invest.
Hypothetical ROI Scenario: One Model in Action
Imagine an organization with 2,000 employees and an annual voluntary turnover rate of 15%. Replacing a single departed employee might cost 20–30% of their salary—let’s approximate $15,000 in combined hiring and onboarding expenses per exit. Over a year, 300 employees leave (that’s 15% of 2,000), costing around $4.5 million.
By leveraging One Model to unify disparate HR data—engagement metrics, performance reviews, and compensation details—HR spots patterns that predict which employees are at risk of leaving. Targeted interventions reduce that turnover by just 2 percentage points (to 13%). The organization now loses 260 employees instead of 300, saving about $600,000 in direct turnover costs annually. Factor in intangible savings like retained institutional knowledge and smoother team dynamics, and the ROI climbs even higher.
A Broader Strategic Value
Hard-dollar savings are compelling, but they’re not the only factor to consider. People Analytics also provides strategic benefits that shape long-term competitive advantage:
- Enhanced Talent Strategy: Predict where the business might face skill shortages in the next year and invest in reskilling or recruiting accordingly.
- Elevated Employee Experience: Correlate engagement scores with performance metrics to ensure top talent remains challenged and motivated.
- Data-Driven Culture: Position HR as a credible, analytics-informed function that advises on broader business issues—not just hiring or compliance.
By presenting both financial and strategic gains, you offer leadership a more holistic narrative about why this isn’t just another HR tool. It’s a catalyst for organizational resilience and growth.
How One Model Simplifies the Pitch
One Model helps make the ROI case crystal clear. Through pre-built dashboards, predictive modules, and real-time analytics, you get a transparent view of how workforce changes affect business outcomes.
Instead of wrestling with spreadsheets or siloed systems, HR teams can quickly deliver the numbers executives want—be it turnover cost projections or scenario planning for expansion into a new region. This level of clarity can be the difference between a polite nod at budget time and an enthusiastic yes.
Before making your case, it helps to prepare your approach to proving People Analytics ROI.
Closing the Deal
When crafting your final pitch:
- Quantify the costs of problems like turnover or low engagement.
- Highlight tangible savings and revenue protection—if you can reduce churn by a few percentage points, how much money is saved?
- Demonstrate strategic wins like improved succession planning or a stronger employee value proposition.
Ultimately, People Analytics isn’t a gamble—it’s an investment that pays dividends through cost containment, culture improvements, and data-driven foresight.
With One Model’s track record and clear ROI scenarios, you’ll have the proof points needed to secure the budget and propel HR to the forefront of strategic decision-making.
See how measuring the value of People Analytics can be easier than you think.
Curious About Your Potential ROI?
Explore how One Model can unify your data, clarify the true costs of people challenges, and help you present a business case that resonates with every level of leadership.
