C-level and HR leaders must embrace evidence-based HR or risk losing ground: KPMG International report

C-level and HR leaders must embrace evidence...

Report reveals 82 percent of organizations expect to begin or increase use of analytics in the people function in the next three years, modest increase over 2012 but doubts remain about HR’s strategic value.

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The time is now for C-level and HR leaders to embrace evidence-based HR or risk losing ground reveals a new global report entitled Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, released today by KPMG International.

According to the survey conducted by the Economist Intelligence Unit on behalf of KPMG, more than half of survey respondents (55 percent) remain skeptical about the potential of Big Data and advanced analytics to make a real difference to the HR function, even as CEOs grapple with regulators, customer requirements, talent, and the demands of the workforce. Yet, an overwhelming majority of these skeptical executives (82 percent) expect their organization to either begin or increase the use of Big Data and advanced analytics over the next three years.

Compared to KPMG’s 2012 report, Rethinking HR in a Changing World, there has been a modest increase in respondents who say their organization’s HR function excels at providing insightful and predictive analytics, from 15 – 23 per cent - but it is still far from satisfactory.

“We’ve never before had such a rich variety of data available for the HR practitioner to prove without a doubt that their decisions can be backed up, as opposed to relying on instinct and best practice, said Mark Spears, KPMG Global Head of People & Change and a Partner in the UK firm. “For the first time in my 30 years’ experience in this space, HR can demonstrate that their activities and processes have a direct impact on the delivery of business objectives.”

Evidence-based HR still at embryonic, pioneering stage

Evidence-based HR uses data, analysis and research to understand the connection between people management practices and business outcomes such as profitability, customer satisfaction and quality.

According to the survey, however, there are still considerable bumps in the road towards widespread acceptance of this approach. One major roadblock may be the credibility of the HR function. Nearly one in three (30 percent) non-HR executives do not agree that the HR function plays a sufficiently strong role in meeting the organization’s strategic objectives, a view shared by only 8 percent within the HR function.

Yet, despite this large gap in perception, there is still a strong view amongst non-HR executives that HR can become more value driven. (49%) agree that HR leaders are able to clearly demonstrate tangible correlations between people management initiatives and business outcomes.

Spears said: “Becoming evidence-based requires an effort of will and a sufficiently changed mental model. Many successful organizations are the ones where C-level executives invest and work alongside HR to connect a company’s people strategy to positively impact business performance. While this approach is not yet widespread, with the right skills and support, it is just a matter of time. Companies and HR practitioners must respond urgently to avoid losing ground and stay ahead of the competition.”

Other findings from the study include:

  • More than one-third (35 percent) of respondents have either not yet applied advanced analytics or Big Data tools to improve the efficiency of the HR function or don’t know whether they do or not
  • Over three-quarters of respondents (76 percent) expect the increasing use of data-driven insights in the HR function to positively impact profitability over the next three years
  • Corporate culture is cited as the single largest obstacle to the use of evidence in people management (32 percent), followed by lack of skills and resources (30 percent) and the quality of the data (29 percent)

In the last 12 months, KPMG member firms have been evaluated as a Kennedy Vanguard Leader in three key reports on HR Consulting from Kennedy Consulting Research & Advisory, a leading analyst firm in consulting services: HR Transformation, HR Consulting to the Public Sector and HR Consulting in the UK and Ireland.

Read the full survey report at www.kpmg.com/HarryRoss. You can also follow the conversation @KPMG on Twitter, using the hashtag: #TimeForHR. Watch the KPMG HR Detective animation series on YouTube.

Research Methodology

Commissioned by KPMG, the Economist Intelligence Unit conducted a global survey of 375 executives in September 2014. More than one-half of respondents identified themselves as C-suite executives (58 percent); the remainder are at the management level up to senior vice president. More than two-thirds of respondents (67 percent) serve an HR function; the remainder (33 percent) serve a wide range of other functions.

For further information, contact:

Amy Greenshields

KPMG International

+1 416 777 8749

amygreenshields@kpmg.ca

Evidence-based HR: The bridge between your people and delivering business strategy

This new report reveals that now is the time for C-level and HR leaders to embrace evidence-based HR or risk losing ground.

 
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KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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