HR Needs To Do Better Job of Showing Value to Their Business: KPMG Study

HR Needs To Be More Strategic, Data Driven

Nov 01, 2012, 12:29 ET from KPMG LLP

NEW YORK, Nov. 1, 2012 /PRNewswire/ -- Globalization, talent constraints and new technology pose significant opportunities for material change in human resources (HR), according to new research from audit, tax and advisory firm KPMG LLP, which found rising skepticism in the executive suite about the overall effectiveness of today's HR function.

In a global survey of more than 400 senior executives, only 17 percent of respondents said HR does a good job of demonstrating its value to the business, and even fewer -- 15 percent – viewed HR as providing insightful and predictive workforce analytics.

"Data analytics is quickly evolving and can provide the next quantum leap for HR," said Paulette Welsing, a KPMG managing director and global lead for the firm's HR Transformation Center of Excellence for the Americas. "Applying data analytics will allow HR to deliver empirical evidence to reinforce their recommendations and gain much-needed credibility at the highest levels of the business."

"Human Resources is often relegated to a transaction-based organization lacking strategic insight and contribution," said Claudia Saran, a KPMG principal and the US leader of the firm's People and Change business.  "HR executives must determine how to adapt their organization, including both its technology and people, to connect more explicitly with their respective companies' business strategy."

U.S. Findings
The survey, "Rethinking Human Resources in a Changing World," found that more than 34 percent of U.S. respondents said data analytics, and various cloud-based technologies would comprise most of their companies' HR-related technology investments over the next two years. Globally, 57 percent of respondents said that data analytics would help identify future talent gaps.

The study affirmed trends toward globalization, indicating that 72 percent of U.S. respondents said that their workforce had evolved over the past two years to include teams collaborating across borders and in different geographies. Some 59 percent reported that they were sourcing key talent outside of their home markets, and 56 percent said they were creating HR policies to address a global workforce.

When asked what their HR functions focused on most frequently over the past two years, the largest number of U.S. respondents, 29 percent, reported it was "retaining crucial skills and experience within the business." An even larger 41 percent said this area would receive the most focus over the coming three years.

In other survey findings from U.S. respondents:

  • Over the next two years, 69 percent said they believed their companies would increase their proportion of virtual/flexible workers.
  • Forty-nine percent said they had outsourced core business activities to external vendors over the past two years.
  • Social networking sites had given their organizations access to significant new sources of talent, according to 37 percent, and 41 percent said the social networking sites made it easier for competitors to poach talent.
  • Over the next two years, 63 percent agreed that coming up with the best talent management practices would be a key tool in their ability to compete in a more competitive global marketplace.

KPMG LLP, the audit, tax and advisory firm (, is the U.S. member firm of KPMG International Cooperative ("KPMG International.") KPMG International's member firms have 145,000 people, including more than 8,000 partners, in 152 countries.

John Cline