KPMG: Leadership must embrace evidence-based HR

12 May 2015 3 min. read

With the wide variety of data, C-level and HR leaders should embrace evidence-based HR to prove their decisions can be backed up, KPMG emphasises in a new report. The firm highlights that progress in adopting this approach is still in its pioneering stage, with more than half of respondents still sceptical about the potential of Big Data for HR and the lack of credibility in the HR function seen as the biggest obstacle.

KPMG recently released its research into evidence-based HR* in a report titled ‘Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy’. The report, which is based on the results of a survey conducted by the Economist Intelligence Unit on behalf of KPMG, highlights the need for C-level and HR leaders to embrace evidence-based HR or risk losing ground.

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The research shows that while the vast majority (85%) of respondents recognises the importance of its HR function when it comes to meeting the organisation's strategic goals,not all (62%) organisations have applied Big Data tools to improve the efficiency of its HR function and the majority (55%) is actually sceptical about the potential of Big Data and advanced analytics to make a real difference to the HR function. However, this is might change as 70% say their organisation will start using or increase the use of Big Data and advanced analytics to inform HR decisions in the next three years.

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According to Mark Spears, KPMG Global Head of People & Change and a Partner in the UK firm, C-level and HR leaders should embrace the evidence-based HR as it offers great potential for the HR function: “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. 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.”

One considerable bump in the road towards widespread acceptance of the evidence-based HR approach is the lack of credibility of the HR function, with 51% of non-HR executives saying their HR leaders are not able to demonstrate tangible correlations between people management initiatives and business outcomes. According to KPMG, this means that the scepticism is not about big data but about HR practitioners’ ability to use it effectively. Other reasons cited as major obstacles to the use of evidence in people management are corporate culture, cited by 32%, lack of skills and resources (30%) and the quality of the data (29%).

Biggest obstacles to the use of evidence in people management

Spears concludes: “Becoming evidence-based requires an effort of will and a sufficiently changed mental model. Many successful organisations 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.”

* In its report, KPMG identifies evidence-based HR as HR that “uses data, analysis and research to understand the connection between people management practices and business outcomes such as profitability, customer satisfaction and quality.”