Evidence-based HR is not as simple | KPMG | GLOBAL

Stumbling Blocks to Starting Blocks

Evidence-based HR is not as simple

Banking execs and HR leaders face challenges that may inhibit their ability to adopt evidence-based HR.



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As with any business transformation program, creating an evidence-based HR function is not as simple as downloading some new analytical apps and selecting your insight. It takes concerted effort, leadership, resources, capabilities and collaboration to go from data to insights and from insights to real business value. According to our survey, banking executives and HR leaders face a number of challenges that may inhibit their ability to rapidly adopt evidence-based HR. However, these challenges could equally be viewed as opportunities and the benefits could be considerable.


Stumbling block: In an era of constrained capital, volatile markets and costly compliance obligations, few banks believe they have the resources or the capital to invest into building the foundation for an evidence-based HR program. More than a third of banking respondents said that difficulties demonstrating the ROI on evidence-based HR were creating obstacles.

Starting block: However, should investment into data-driven HR processes return even a fraction of the profit uplift suggested by our respondents on page 10, it seems clear that banking executives will quickly start to recognize the strong ROI that these investments offer.


Stumbling block: Challenges related to corporate culture were cited by banking respondents as the top obstacle to the broader adoption of evidence-based HR in their organization and (besides government respondents) the banking sectors was the most likely group of respondents to see culture as a barrier to adoption. While this is largely related to the highly-regulated nature of the industry (see next item), banking executives and HR leaders will still need to strive to encourage a more data-driven and analytical culture across the organization.

Starting block: Regulators are increasingly looking to banks to provide a more rigorous, evidence-based view of their culture in order to demonstrate they are operating prudently and in compliance with new legislation/guidelines.


Stumbling block: For banks, particularly larger multinational groups, concerns related to regulation create significant barriers to any new change program. New regulations, new reporting requirements and new compliance obligations seem to be emerging every day and this is not only eating up time and resources, but also dampening the organization’s appetite for change.

Starting block: Yes, banks will need to be ever-vigilant that their evidence-based HR infrastructure does not contravene regulation (particularly related to the sharing of employee data across borders). But we believe that – used properly – evidence-based HR will ultimately emerge as a key strategy in banks’ compliance toolkit rather than a risk.

Data silos and capabilities

Stumbling block: Given their history of inorganic growth and ‘ring-fenced’ IT systems, banks often face significant challenges integrating data across the various parts of the wider organization. Given that, as with any data-led process, the more data that is available the richer and more reliable the insight, banking executives and HR leaders will need to put a concerted effort into creating and executing a data strategy.

Starting block: The software required to analyze “big data” – particularly correlations between multiple variables – is better and more widely-available than ever before. When managing one of your biggest costs and assets, real-time and rigorous data analysis can provide the pathway to both major and marginal gains.

Stumbling block: Evidence-based HR is a new approach that requires fresh skills and capabilities to be developed within the HR function. Analytical prowess needs to be combined with commercial acumen to identify how the conclusions from the data might fit with the company’s commercial objectives. As one senior HR leader at a global retail bank told us, the HR function needs “to become more numerically proficient and be able to explain data insights, to communicate the business relevance of our findings in a compelling way to senior leaders.”

Starting block: As the focus on “big data” increases, so the skills have become more readily-available in the market. In addition, new cloud-based HR systems often include ready-made reporting and analytics that can do much of the heavy-lifting for you, so HR professionals and the business alike should become more familiar with the features and benefits of HR analytics.

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