People Analytics Terms in Plain English: What Each Number Actually Means

Most arguments about HR numbers are really arguments about definitions. Agree in writing on headcount versus full-time equivalent, voluntary versus involuntary turnover, span of control, absence rate and what a pulse survey is, and write each formula once. Then every dashboard, report and board slide means the same thing.

I am Mac Malbrough. I hold a J.D. and an MS-HRM, I am not an attorney, and I help small employers count their people consistently. The examples are hypotheticals I made up to show the arithmetic.

Why does vocabulary matter before analytics?

Two managers present turnover in the same meeting. One says it was 12 percent. The other says 20. Both are right, because one counted only people who quit and the other counted everyone who left, including a temporary employee whose season ended. The room spends twenty minutes on the gap and none on what to do.

People analytics is the practice of using data about employees and work to answer questions and support decisions. It starts with agreed terms. The glossary below covers the terms I see small employers trip on most. Write your own version of each definition in a page you share with everyone who reports numbers, so the next meeting starts from the same place.

How do headcount, FTE and span of control differ?

• Headcount: the number of people on the payroll on a given date, regardless of hours
• Full-time equivalent (FTE): total hours worked by everyone divided by the hours in a full-time schedule. Three people who each work 20 hours a week add up to 1.5 FTE if full time is 40
• Span of control: the number of direct reports a manager has

Headcount tells you how many people to train, insure and manage. FTE tells you how much work capacity you have, and it is the right basis for cost per head and for workload comparisons. A company with 20 people and 14.5 FTE has a very different staffing picture from one with 20 people and 20 FTE. Span of control tells you whether managers have time to coach. A manager with two direct reports and a manager with fifteen have different jobs, and a plan that treats them the same will fail one of them. My article on organizational structures and their HR consequences shows how span changes by shape.

What is the difference between voluntary and involuntary turnover?

• Turnover rate: separations in a period divided by average headcount in that period
• Voluntary turnover: separations that the employee chose, such as resignations and retirements
• Involuntary turnover: separations the employer chose, such as terminations and layoffs
• Early attrition: separations within the first 90 days after hire, expressed as a share of the people hired in that window

The split matters because the causes differ. High voluntary turnover points to pay, management, growth or workload. High involuntary turnover points to hiring and onboarding quality, or to a business that is cutting. Early attrition points to what the candidate was told versus what they found, and I cover that mismatch in recruiting and retention as one system.

A hypothetical: a company with an average headcount of 50 sees 9 separations in a year, 6 voluntary and 3 involuntary. Total turnover is 18 percent, voluntary turnover is 12 percent and involuntary is 6 percent. Each of those answers a different question, so report all three. The formulas and common mistakes are in how to calculate HR metrics correctly.

For a sense of national rates, the Bureau of Labor Statistics defines its monthly rates on total employment, and it reports quits separately from layoffs and discharges. That distinction is exactly the voluntary and involuntary split, which is why it is worth keeping in your own data.

What do absence rate and pulse survey mean?

• Absence rate: days or hours absent divided by days or hours scheduled, over the same period. Decide in advance whether approved leave, such as vacation and protected leave, counts
• Pulse survey: a short survey, usually under a dozen questions, sent often to track a few topics over time. It is for trends, not for a full diagnosis
• Response rate: the share of people invited who answered. A low rate makes the results hard to trust

Absence is a case where the definition changes the answer. Counting protected leave as absence would blend legal entitlements with attendance concerns, and could lead to wrong conclusions and a risk of acting against a protected leave taker. Define absence as unplanned absence and keep protected leave out of the metric. If you are unsure how leave rules apply, talk with an employment attorney.

For pulse surveys, the Survey Action Planner turns the results into three actions with owners and dates, and a “You said, we did” message. A survey without action reduces response next time.

What are the four kinds of analytics called?

• Descriptive analytics: what happened. Counts and rates for a past period
• Diagnostic analytics: why it happened. The same numbers cut by manager, tenure, role or pay position
• Predictive analytics: what is likely to happen. Forecasts such as expected exits and hiring needs
• Prescriptive analytics: what to do about it. A decision, with an owner and a date

Small employers can do the first two with a spreadsheet and the third with simple arithmetic. The fourth is a human decision. I wrote the full walkthrough in four kinds of HR analytics a small employer can actually use.

How do you use shared definitions?

Put the definitions on one page and attach a formula, a data source and an owner to each metric. Review them once a year. When a number moves sharply, check whether the definition changed before you look for a cause. The HR Metrics Starter gives one definition for each of eight HR numbers and a 15-minute monthly review, so it works as the master page. For pay, the compa-ratio, which divides an employee’s pay by the midpoint of the range for the job, is the standard measure of position in range. The pay equity audit workbook uses it.

Be careful with small groups. A rate calculated on fewer than ten people swings with one person, so report the count beside the rate. And when you cut data by a protected category to look for gaps, restrict access and use the results to fix problems, not to make decisions about individuals.

What should you do this week?

Write down the three numbers you report most often and your definition of each. Ask the person who produces each one how they calculate it. If the answers differ, you have found the first thing to fix. Then put the agreed formulas on one page.

The HR Metrics Starter is built for this step. If you would like help setting definitions and a monthly review, book a free consult through my HR services for small businesses.

Related reading: HR metrics a small employer should track.

Sources

• U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Survey, September 2026: quits and layoffs and discharges reported separately
• How to calculate HR metrics correctly, for the formulas

McKinley holds a J.D. but is not a licensed attorney. Articles here are general information, not legal advice. For your specific situation, talk with an employment attorney.