Business Problem — HR Analytics¶
Company Context¶
Nexus Technologies is a 1,470-person software and consulting company. Over the last year, voluntary attrition has hit 16% — meaning roughly 235 employees left, each costing an estimated £25,000-£60,000 to replace. The total annual cost of attrition is approaching £8M.
The problem: The CHRO (Chief HR Officer) suspects attrition isn't random — certain roles, departments, and employee circumstances drive most of it. But HR has only anecdotal theories ("sales burns people out", "we don't pay juniors enough"). They need data.
You've been asked to analyse the HR data, identify the real drivers of attrition, and recommend where to focus retention efforts.
Business Questions to Answer¶
Q1 — Attrition Landscape¶
- What is the overall attrition rate?
- What is the estimated annual cost of this attrition?
- Is attrition concentrated in specific departments or roles?
Q2 — Who Leaves?¶
- Does attrition differ by department? By job role?
- Do younger employees leave more than older ones?
- Does attrition vary by tenure (years at company)?
- Do employees who travel frequently for work leave more?
Q3 — Compensation and Attrition¶
- Are lower-paid employees more likely to leave?
- Does a recent salary hike reduce attrition?
- Does stock option level correlate with retention?
Q4 — Work-Life and Satisfaction¶
- Does overtime correlate with attrition?
- Do job satisfaction and work-life balance scores predict departure?
- Does distance from home matter?
Q5 — Actionability¶
- Of the drivers we find, which can HR actually influence?
- Where would a retention budget have the highest impact?
Success Metrics¶
| Metric | Current | Target |
|---|---|---|
| Voluntary attrition rate | 16% | < 11% |
| Annual attrition cost | ~£8M | < £5.5M |
| At-risk identification | None | Proactive flagging of high-risk employees |
| Time-to-insight for HR | Weeks (manual) | Real-time dashboard |
Stakeholders¶
| Stakeholder | Cares about |
|---|---|
| CHRO | Overall attrition, cost, strategy |
| Department Heads | Their team's attrition and morale |
| Compensation Team | Whether pay is driving departures |
| Line Managers | Which of their reports are at risk |
An Ethical Note¶
HR analytics requires care
This data is about real people. Predicting individual attrition risk raises ethical questions: Could a "flight risk" label become self-fulfilling (managers disengage from flagged employees)? Could it be used to deny promotions? Throughout this project, focus on systemic insights ("overtime drives attrition — let's fix overtime") rather than surveillance of individuals. Recommendations should improve the employee experience, not police it.