Using HR Data to Reduce Turnover and Close Pay Gaps

HR leaders can use workforce analytics to reduce turnover and close pay equity gaps by investing in tools that surface real-time retention risk, compensation disparities and diversity metrics at the individual employee level. When leaders have on-demand access to this data, they can act proactively — identifying root causes of attrition, exposing hidden pay inequities and connecting workforce patterns to employee experience — rather than reacting after problems escalate. Connection is the missing link between workforce data and perceived pay fairness. ADP Research found that people who felt strongly connected at work were 2.5 times more likely to believe they were paid fairly, showing why leaders should evaluate compensation data alongside the employee experience.

Key takeaways

Workforce analytics platforms help HR leaders move from reactive decision-making to proactive talent retention by surfacing trends, anomalies, and prescriptive insights in real time.
Pay equity dashboards expose compensation discrepancies by role, gender, race and ethnicity — enabling leaders to distinguish legitimate differences from actual inequities.
60% of organizations using ADP's turnover cost storyboard lowered their voluntary turnover costs.
ADP Research found that people who felt strongly connected at work were 2.5 times more likely to believe they were paid fairly.
ADP benchmarks are built from aggregated and anonymized data covering 1.1 million U.S. employers and more than 42 million employees.

ADP® DataCloud uses artificial intelligence (AI) powered analytics to turn workforce questions into actionable insights in seconds, helping leaders move from detection to decision more quickly. Tools that offer prescriptive insights are especially valuable, as they help leaders dig into the whys and hows of the challenges they must overcome — and that analysis is strengthened by ADP benchmarks built from aggregated and anonymized data covering 1.1 million U.S. employers, more than 42 million employees, 9,000-plus job titles and 1,000-plus industries.

"For leaders, it’s about being ready to act by being close to your people and your data," says Linda Mougalian, vice president of strategy and operations, global product and AI, ADP. "You're ready to act because you have to visualize the trends as they shift, and you know how your people feel. This is incredibly valuable as you look to make key business decisions that will impact both your people and your business outcomes."

There's a growing trend toward tools that help leaders become nimbler in their ability to act, and react, to changing circumstances within their organization and in the world beyond. Part of this is the development of tools that surface key trends and anomalies and then allow leaders to drill down data to a more granular, individual level, to make more educated decisions about their workforce.

Business agility can help organizations improve talent retention and reduce turnover, address pay equity and support diversity and inclusion efforts in meaningful ways. Here's a deeper look into how workforce data impacts each of these three areas.

Turn pay equity insights into action

How does workforce data help leaders reduce turnover?

Organizations work hard and invest significant resources in finding the right talent. But minimizing turnover across the board isn’t necessarily the goal. Some departures have a greater impact than others, particularly when an organization loses high-performing employees, people in critical roles or individuals with hard-to-replace skills.

A holistic view of teams can help leaders distinguish between regrettable and non-regrettable turnover, understand what may be driving critical people to leave and direct retention resources where they can have the greatest impact. That more focused approach can translate into measurable results: 60% of organizations using ADP's turnover cost storyboard lowered their voluntary turnover costs.

"ADP offers dashboards and tools to help leaders uncover the root causes that can lead to costly turnover," Mougalian says. "Employers are struggling to find and keep qualified talent. The ability to look at risk potential proactively is critical. There are numerous drivers of turnover and they vary by role, team and locations. Tools that can help to identify the relevant drivers allow leaders to be proactive in building plans to retain key talent and making better hiring decisions for long term success."

Consider how the turnover cost storyboard turns a broad retention concern into a focused business decision. Leaders can compare turnover patterns and costs by role, team and location, identify where regrettable departures create the greatest operational or financial exposure and prioritize action in those areas. Across organizations using the storyboard, 60% lowered their voluntary turnover costs, demonstrating the value of connecting workforce patterns to targeted interventions.

Which factors within your control could be prompting the people your organization can least afford to lose to look elsewhere? With the right data, leaders can identify where turnover presents the greatest risk, take targeted action and create better work experiences for the people who are critical to long-term success. Companywide averages can obscure the most consequential risks. A stable overall turnover rate may still conceal rising attrition within a critical role, a high-performing team or a hard-to-staff location, so leaders should examine where departures are concentrated rather than relying on the enterprise rate alone.

How can data-driven insights improve pay equity?

Visibility is perhaps one of the biggest obstacles to achieving pay equity throughout an organization. ADP Research found that, on average, one in three surveyed workers believed their pay was unfair, underscoring how easily a broad workforce issue can remain hidden without consistent measurement. A pay equity dashboard can help to shine light on potential inequalities within your organization.

"Having trusted and insightful data allows companies to take action with confidence and then measure their progress," Mougalian says. "Making improvements often takes a mix of approaches to address unique situations that have emerged over time. Once you can see where you stand you can make a thoughtful plan based upon deeper understanding."

The right tools can illuminate potential problem areas, such as when two people with the same job title have drastically different compensation. Tools powered by robust data can give leaders a full view of the situation, including years of experience, certifications, education and other factors that can affect pay differences.

By exposing these data-informed insights, leaders can identify actual pay equity problems and address them, while simultaneously spotting patterns and trends that can help them create plans to reduce future instances of inequality.

How does workforce data support diversity and inclusion?

Building a diverse and inclusive culture requires more than leadership commitment or access to workforce data. Leaders must also have the ability to act on what the data reveals. That requires clear accountability, empowered managers and a regular process for evaluating whether changes in hiring, advancement, compensation and the employee experience are producing the intended results.

Business agility helps create those conditions. Rather than treating diversity and inclusion as a fixed initiative or an annual reporting exercise, an agile organization can examine workforce patterns, listen to people’s experiences, take targeted action and adjust its approach as new information emerges. The goal isn’t simply to build a dashboard. It’s to establish a repeatable cycle in which insight leads to decisions, decisions lead to action and outcomes inform what happens next.

An ADP diversity and inclusion dashboard can support this process by giving leaders the ability to examine organizational trends at more granular levels. These insights can help leaders identify opportunities across pay equity, hiring and promotion practices, while considering how workforce patterns connect with employees' experiences at the team and individual levels. That connection matters because ADP Research found that people who felt strongly connected were 2.5 times more likely to believe they were paid fairly, while those who didn’t feel connected were 2.5 times more likely to report unfair pay.

Building agility today to strengthen tomorrow's decisions

When leaders are equipped with the right tools and information, they're ready to respond quickly to all kinds of business challenges. Organizations that invest in tools to make this kind of data easily accessible and readily available when leaders need it can identify opportunities faster and work toward alleviating problems before they get out of control. The next frontier is not simply more workforce data, but broader access to it. AI-powered natural-language querying allows non-technical HR and business leaders to ask questions in everyday language, investigate emerging patterns and move from insight to action without waiting for a specialized analyst or static report.

Organizations have a better chance of success if their leaders can plan several possible scenarios and be ready to act, no matter what challenges are presented. The shift from descriptive dashboards to AI-powered analytics raises the standard for scenario planning: ADP DataCloud can help turn natural-language questions into actionable insights in seconds, so leaders can explore changing conditions and respond within their flow of work.

"The more insights we can give to business leaders from organizational trends to individual situations, the more confident they can be in planning and making decisions based upon meaningful data they can trust," Mougalian says.

Frequently asked questions

What tools help HR leaders make data-driven decisions quickly?

Workforce analytics platforms, such as ADP DataCloud, consolidate payroll, performance and engagement data into dashboards that surface trends, anomalies and prescriptive insights. These tools can help leaders drill down from organizational trends to individual-level data so they can act on specific problems rather than waiting for issues to escalate.

How does business agility help organizations address pay equity?

Pay equity dashboards expose compensation discrepancies between people with similar roles and qualifications. By surfacing factors like years of experience, certifications and education alongside pay data, leaders can distinguish legitimate pay differences from actual inequities and build plans to reduce future instances of inequality.

Can workforce analytics improve employee retention?

Yes. Analytics tools that offer a holistic view of teams help leaders understand the root causes of turnover — such as engagement drops, compensation gaps or management issues — and intervene proactively. By identifying risk factors by role, team and location, leaders can build targeted retention plans before high-value people leave.

Learn how to move from compensation insights to action with the ADP Pay Transparency Guide