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Decoding the HR dilemma

Robert BoltonPartner, KPMG

COST CAPABILITY CAPACITY CONNECTIVITY COMPLIANCE

evidenced-based-hr

The Candle Test

The Answer

“What Science Knows Business Doesn’t Do”

Source: Fighting the war for talent is hazardous to your organization’s health Jeffrey Pfeffer

• “It's bad enough that fighting the "war for talent" has companies fighting the wrong war, often using the wrong methods. But there is an even worse problem, namely the consequences that are unleashed by even waging the talent war in the first place.”

Across the globe, CEOs are grappling with massive issues and turning to data for solutions

Talent

Regulatory Requirements

Disruptive Technology

Customer Requirements

Demands of the Workforce

With this, comes intent for all functions to embrace

an evidence-based approach

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

We expect to begin using or increase our use of Big Data and advanced analytics to inform HR decisions over the next three years.

We have applied advanced analytics or other Big Data tools to improve the efficiency of the HR function

Our HR strategy is significantly influenced by a variety of data sources across the Organisation.

70%20%

9%

65%26%

9%

73%20%

7%

Defining Evidence-Based HR

What is Evidence-Based HR?

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.

• Workforce Intelligence

• Many organisations produce dashboards with KPIs. However, they do not link root cause and effect in order to provide business leaders with actionable insights that can influence decisions supported by data / evidence.

• This chart outlines how analytics can increase business value and lead to actionable insights that both the business and HR can implement.

The analytics maturity curve

Increasing business value

HR

in

form

ati

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an

d c

ap

ab

ilit

y m

atu

rity

Data and Basic Reporting

Consolidated Reporting

Advanced Analytics

Predictive Analytics

● BIO Performance

● Workforce Analytics● BIO Diversity● Workforce Optimisation● Strategic Workforce Planning

● Talent Dashboard● BIO Mobility● BIO Workforce

Dashboards, metrics,benchmarks

Combined Business and HR data,advanced analytics methods

Actionable insights, forecasts, predictions

Opinion

Data

Metrics

Action

Analysis

Insight

Based on ‘gut feel’ and widely held beliefs (intuition)

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

How does

it work?1Identify a business challenge A retail bank wants to improve branch performance.

2Develop your hypothesis There may be a link between the types of employee in a branch

and its overall performance. HR and senior line leaders work together to formulate hypotheses worth testing.

3

Understand your data: identify what you have and need Identify what you have and need. You might have HR and workforce

data; but you need financial performance and customer data.

4Analyse the data: what is it telling you? Think about the best visualisation of the analysis so that leaders understand the implications of the analysis in an engaging way.

6

Validate the data and findings with internal and external sources. If it’s good, move on. If not, go back to step 2. Senior leaders in HR, customer engagement and branch will work together to test the hypothesis.

5

7

Leverage the insight into business decisions. We may run a pilot to test our conclusions before going firm-wide.

Continuously leverage an evidence-based HR approach. To bridge the ‘knowing-doing’ gap we will reconsider our HR Operating Model to take account of evidence based practices.

CEOs and HR leaders of early adopters are setting the course for the HR Functions of the future

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

Through evidence-based HR, McDonalds now knows that having at least one employee over 60 in each store dramatically improves customer satisfaction, on average by 20% and boosts performance.

The HR team at McGraw Hill Financial can now instantly summon up information revealing the profile of those most likely to leave the organisation in the near future and target interventions accordingly.

The Royal Bank of Canada was able to discover a major connection between the degree employees believed in their competitiveness of their value proposition and the performance of the retail branch. The effect was striking.

“It is only during the last two to three years that we have been able to produce data-sets that stand up.”

James StringerInformation Services Director

Unilever

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

“The term ’evidence-based HR’ isn’t one that I have heard HR functions use too much, which may actually be an indication of how much HR sees itself as an evidence-based function.”

Jonathan Ferrar Vice President of Smarter Workforce

IBM

Bumps ahead

Skills deficit

Harmful impatience

Over-reliance on science

Skepticism about HR

Disorganised data

Cultural resistance

1

2

3

4

5

6

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

Culture, lack of skills and data quality seen as major roadblocks

30%

Lack of skills/resources/experience to performrequired analytical activities

22%

InappropriateHR operating model

29%

Quality of the data 32%Corporate culture

25% Senior managementtends to regard evidence-based HR as a fad

28%Difficulty in demonstratingreturn on investment (ROI)in evidence-based HR

27%Silos withinthe organisation19%Lack of

financialresources

22%

Lack of HRmanagementcapacity

1%Other

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

If HR is to be a contributor to a new way of delivery, it has to address three critical success factors…

Familiarity with data and analysis

Greater knowledge of the industry and Organisation

Reconfiguring HR functions

1

2

3

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

…which requires a new set of skills

Source: Economist Intelligence Unit Study, commissioned by KPMG International: Evidence-Based HR: The Bridge Between your People and Delivering Business Strategy, 2015.

QuestioningSkills for Evidence-Based HR practitioners

Persuasive

Creativity

Industry Insight

Systems Thinker