C-Level Executives, Including The CHRO, Must Embrace Evidence-Based HR Or Risk Facing Competitive Disadvantage: KPMG Report

NEW YORK, April 15, 2015 /PRNewswire/ -- A global survey  titled Evidence-Based HR: The Bridge Between Your People and Delivering Business Strategy conducted by the Economist Intelligence Unit on behalf of KPMG International, the audit, tax and advisory firm revealed that while interest and investment in evidence-based HR is increasing, wide-spread adoption is still not getting the traction many predicted just a few years ago.  Evidence-based HR uses data, research, and analysis to determine how HR practices affect business outcomes such as productivity, profitability, customer satisfaction and service quality.

US vs. Global Use of Evidence-Based HR

According to the survey, the US outpaces the rest of the world in applying advanced analytics or other Big Data tools to link people strategies with organizational goals (70 percent vs. 62 percent) and using or increasing the use of Big Data or advanced analytics to inform HR decisions (75 percent vs. 71 percent).  The survey also indicated the US also is more optimistic about the value of advanced analytics and predictive modeling than its international counterparts (37 percent vs. 23 percent).

However, more than half of global respondents, including the US, (56 percent) are skeptical regarding the ability of advanced analytics to add significant value to the HR function.  The primary factors contributing to this skepticism are the difficulty of HR to justify the investment in analytics (46 percent) and the lack of analytical skills required to effectively utilize analytics to make business decisions (41 percent).

"The convergence of technology, data and analytics is providing HR an unprecedented opportunity to move from its traditional instinctive, intuitive function to a data-driven, fact-based decision-making function similar to Finance and IT," said Claudia Saran, Lead Partner, People & Change, KPMG in the US.  "The use of evidence-based HR can help predict employee retention rates, understand the impact that HR programs have on employee productivity and predict the financial value of HR investments. Investments in determining what to measure, creating the appropriate set of workforce analytics, and hiring resources with the right analytical skills will not only improve the credibility of the HR function but will have a positive impact on business objectives."

Globally, Evidence-based HR still at embryonic, pioneering stage

According to the survey, even though some organizations have realized value from using advanced analytics, there are still considerable headwinds towards the adoption of widespread acceptance of this evidence-based HR approach. The data indicates that nearly one in three (30 percent) non-HR executives say the HR function does not play a strong role in meeting their organization's strategic objectives, a view shared by only 8 percent within the HR function.  HR practitioners are employing evidence-based HR to bridge that gap in perception.

In fact, the survey results indicate that despite this large gap in perception, there is still a strong view amongst non-HR executives that HR can become more value driven. Forty-nine percent of respondents agree there is value in demonstrating the correlations between people management initiatives and business outcomes. So, there is clearly an opportunity for HR to leverage the use of Big Data and advanced analytics to provide value to the business.

"Becoming evidence-based requires a different mindset and skillset for HR," said Randy Di Bernardo, Principal in People & Change and HR Transformation Leader at KPMG in the US. "We know that organizations that effectively hire, retain, develop and manage their top talent have a positive impact on business results and enjoy a competitive advantage in the marketplace. So, the rationale for using data to measure the impact of people is a logical next step for HR. The key is to demonstrate the incremental value with evidence-based HR to gain the credibility of the business leaders over time."

Read the full survey report at http://kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/evidence-based-hr/Pages/Default.aspx.

You can also follow the conversation @KPMG on Twitter, using the hashtag: #TimeForHR.

Watch the KPMG HR Detective animation series on YouTube at
https://www.youtube.com/watch?v=EUL6kmLyQE4 &
https://www.youtube.com/watch?v=0M14clSu3Bg.

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.

About KPMG International
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries and have more than 162,000 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.

About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 155,000 professionals, including more than 8,600 partners, in 155 countries.

SOURCE KPMG LLP

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