4 simple steps to proving the ROI of people-first strategies

HR leaders today face a unique challenge: balancing empathy-driven initiatives with business outcomes. They are expected to champion employee wellbeing while also proving the tangible value of people-first strategies. However, in a world where some business leaders still question the ROI of engagement and retention programs, how can HR demonstrate their true impact?

While 83 percent of CEOs believe empathy is undervalued, 37 percent still argue it doesn’t belong in the workplace. This creates a critical gap between what HR knows to be true and what it must prove: prioritizing people isn’t just the right thing to do but a business imperative.

So, how does HR bridge this gap? The answer lies in shifting the conversation from sentiment to strategy, from initiatives to hard data. HR doesn’t have to choose between wellbeing programs and business impact. By pairing their initiatives with clear metrics, HR can prove that investments in engagement, retention, and workplace culture create a stronger, more successful organization.

By mastering the ROI (Return on Investment) language, HR leaders can demonstrate how their programs drive measurable success, strengthening both their strategic influence and their organization’s bottom line.

<<Download our ROI workbook here and add ROI to your HR programs.>>

1. Start with the metrics that matter

For small businesses, tracking the right HR metrics is essential. Unlike large organizations that can monitor dozens of data points, smaller HR teams need to strategically select those that clearly demonstrate business impact. 

The key is to focus on a balanced mix of metrics that capture different aspects of workforce effectiveness. While not every metric needs to be used, selecting relevant ones from each category can provide a well-rounded view, especially when data is segmented by employee demographics. For example, analyzing first-year productivity and retention by recruitment channel can help determine quality-of-hire metrics, allowing HR teams to refine recruitment strategies and allocate resources more effectively.

Here are key metrics that help HR leaders measure the impact of their people strategies:

• Hiring metrics: Measure how long it takes to hire and set up new employees by role. Shorter hiring times improve business agility, efficiency, and growth potential.
• Productivity metrics: Measure how well employees deliver in their roles through revenue per employee, project completion speed, customer satisfaction, product quality, performance ratings or other output-based KPIs. These metrics quantify the contributions that employees make to business success.
• Engagement score: Typically derived from surveys, this metric reflects employees’ motivation, commitment, and connection to the organization. It can also help predict intent to stay, productivity, and employee advocacy. It’s especially valuable for roles where employees make lots of independent decisions or carefully manage the moods of teams or customers.
• Counterproductive behaviors: Measure issues that disrupt business, such as absenteeism and accidents. Error rates in these metrics signal burnout, dissatisfaction, or workplace stress. Tracking these issues enables HR to address concerns before they affect performance. Low scores in this area can act as a stand-in for productivity metrics in roles where exceeding output isn’t the focus, but consistently meeting a minimum standard is critical to success and risk management.
• Rewards: Measure how employees are recognized for their contributions, such as average time to promotion or salary increase. Ensuring rewards align with performance helps manage retention costs and maintain engagement.  
• Turnover and retention rate: Measure the percentage of employees who leave or stay within a given period. These metrics offer insight into engagement, leadership effectiveness, and overall workplace satisfaction and can be directly related to the replacement costs of letting a poor culture drive away talent.

Each of these metrics offers valuable insight into workforce dynamics. When presented alongside business outcomes, they serve as compelling evidence of HR’s impact on profitability, efficiency, and long-term success. 

2. Translate HR into business speak

HR leaders know engaged employees perform better, but proving this to business leaders requires speaking their language. To gain executive buy-in, HR must frame its initiatives in terms of cost savings, revenue growth, and operational efficiency. When leaders see HR’s impact reflected in business metrics, they are more likely to invest in people strategies.

Here’s how key HR initiatives translate into business outcomes:

• Wellness translates to reduced absenteeism and lower healthcare costs: A SHRM study found that every $1 invested in employee wellness yields a $3 return through reduced absenteeism and healthcare costs.
• Turnover and retention translate to cost savings and business stability: Due to recruitment, training, and business disruptions, the cost of replacing an employee can range from 60 percent to 200 percent of their salary. Lowering turnover by even a few percentage points can result in significant savings.
• Engagement translates to higher productivity and profitability: Gallup research shows that highly engaged sales teams are 18 percent more productive, and engaged employees are, on average, 23 percent more profitable than their disengaged peers. By tracking engagement and linking it to output metrics, HR can build a strong business case for continued investment in employee experience.

Brett Ungashick, Founder of OutSail, a leading HRIS advisory firm, helps customers evaluate and select new HR Tech platforms. His tasks include supporting business case development efforts. When he approaches budget stakeholders for approval on a necessary project, he says it’s important to speak their language—and for the finance team, that often means focusing on ROI.

In his experience, there are only two ways to demonstrate ROI for HR tech purchases. 

The first is by generating hard cost savings for the business. The second and more common ROI discussion involves convincing stakeholders that spending more will yield efficiencies, reduce turnover, or increase productivity in a way that creates a net benefit for the business. 

In this second scenario, it’s critical to be strategic and use the finance team’s language, i.e., coming prepared with numbers.

Take a hospitality business with a high turnover, for example. Brett will calculate the company’s total turnover over the past 12 months, reference research on recruiting, hiring, and training replacement costs, and determine the overall cost of attrition. Then, he would show how this new investment will reduce turnover and assign a dollar amount to those savings.

By speaking the language of business and presenting data in a way that resonates with leadership, HR can demonstrate that investing in wellbeing and engagement drives measurable success and secures leadership buy-in. Remember, not every number needs to come from internal data. For instance, external benchmarks and industry research can provide valuable context and help support key assumptions, such as the cost of turnover.

<<Ready to build your ROI scenarios? Download your ROI workbook here.>>

3. Overcome common HR data challenges

One of the most significant obstacles to leveraging HR data is incomplete or inconsistent datasets. Many small businesses struggle to track HR metrics due to limited resources or fragmented systems. Here’s how to tackle common data challenges and turn HR insights into business impact:

1. Start with what you have: Even if your dataset isn’t perfect, trends can still emerge. If formal engagement survey data is lacking, analyze turnover trends, exit interview feedback, or informal employee sentiment.
2. Improve data collection over time: Standardize how you collect and log information during onboarding, performance reviews, and offboarding to ensure consistency in retention data.
3. Leverage HCM platforms: Many HR systems already track valuable data points. Identify reporting gaps and maximize your HCM tools to streamline data collection and insights.
4. Benchmark against trend and industry data: If internal data is limited, compare it to industry benchmarks. Over time, you can fold in your past data to benchmark against yourself and show progress. This gives leadership context, highlighting where your company excels or where improvements are needed and shows that your efforts are making a consistent difference.
5. Make educated guesses and iterate over time: Odds are there will never be a perfect data set or metric, but that shouldn’t slow progress. Use the best available information to make informed decisions, then adjust as new data becomes available. A confident, well-reasoned estimate and a willingness to adapt can be enough to drive meaningful action and get things done.

By addressing these challenges, HR can strengthen its ability to present clear, data-driven insights that support strategic decision-making.

4. Build the business case: How to communicate HR insights

Even the best HR data won’t drive change unless HR communicates it effectively. Leadership teams respond best when HR frames data in a way that tells a compelling story. Rather than simply presenting numbers, HR leaders can turn insights into action using storytelling, context, and clear recommendations. Here are key strategies to make HR data resonate:

• Frame HR metrics in business terms. Instead of saying, “Our turnover rate is 18 percent,” say, “Reducing turnover by 5 percent would save us $250,000 annually in hiring and onboarding costs.”
• Use visuals. Simple graphs or dashboards make it easier for leadership to see trends and digest insights quickly. Remember that your visuals should underscore a specific point and not just share all the information you have.
• Tell a story. Use both quantitative and qualitative insights to bring HR data to life. Pair metrics with employee testimonials or case studies to humanize the impact of HR initiatives. Equally important is capturing the experiences of leaders and managers and highlighting their challenges, successes, and the impact of HR initiatives on their roles. A compelling story considers all perspectives, reinforcing that empathy should extend across every level of the organization.
• Provide recommendations. Always end with actionable solutions. If engagement scores have dropped, propose a specific intervention, such as leadership training or flexible work options, and outline how you’ll measure success.

HR leaders can master storytelling by structuring data into a straightforward, relatable narrative with real-world examples. Simple, compelling language makes insights persuasive, turning data into stories that drive action.

<<Create your data storytelling by downloading this ROI workbook here.>>

Bonus: HR metrics in action with real-world success stories

Many small and medium-sized businesses are already proving the ROI of HR initiatives through data-driven decisions. These case studies highlight how HR-driven decisions translate into measurable business outcomes. Take a minute to explore these examples, noting how HR initiatives are framed in a way that resonates with business leaders.

Oviva achieved a 301% ROI By avoiding additional administrative hires and increased productivity. CRM vendor achieved a 226% ROI By reducing software and unified payroll management. Ualá achieved an 83% ROI By leveraging automation through the HCM platform to increase HR team productivity. Zappi achieved a 405% ROI By saving more than £120,000 in employee and manager time costs annually.

These examples demonstrate how HR programs contribute directly to a more resilient, profitable, and successful business.

Understanding the potential ROI of any HR initiative is a standard business practice. As these companies have measured their impact, many organizations evaluating HCM platforms seek data to justify their investment. To support this, HiBob developed an ROI calculator that helps HR leaders quantify the cost savings and efficiency gains of using Bob for HR tasks, offering another way to make data-driven decisions with confidence.

<<Find out the ROI of using an HR platform like Bob with this ROI calculator.>>

The future of HR: Double the fun

HR leaders can champion employee wellbeing and business success without compromise. Data is the key to proving that people-first strategies are good for employees and essential for business performance.

By tracking the right metrics, closing data gaps, and framing insights in a way that speaks to leadership, HR can double down on its strategic influence while continuing to support its people. The more HR integrates data into its storytelling, the more credibility and impact it gains.

Start small, focus on what matters, and translate your initiatives into business terms. When HR speaks the language of ROI, everyone wins—your business, your leadership team, and most importantly, your people.

<<Ready to build your ROI scenarios? Download your ROI workbook here.>>