26th Feb 2013
HR risks losing boardroom credibility as their “rear view mirror” approach to analytics fails to provide useful business insight, a KPMG white paper warns.
Too anchored in the present and past, too generic and too operational - these are just some of the charges outlined against HR’s application of analytics in the white paper, People are the Real Numbers.
These shortcomings create a level of “uncertainty and distrust” with 85% of c-suite executives claiming their HR teams fail to provide insightful analytics.
“The problem is that, today, CEOs think their HR teams are long on info but short on insight. The hope must be that, tomorrow, well thought out, predictive, HR analytics will become as important to the CEO as the balance sheet and P&L statement,” said report author Robert Bolton.
He identified three common mistakes that HR must put right to gain boardroom respect:
data fragmentation: organisations have too many systems for recording employee activity. Unless training records, reward programmes and absence data are housed together and updated in uniform fashion, data will continue to be disjointed and meaningless
a lack of hypothesis: analysis tends to focus on basic workforce metrics. Rather than simply reporting data, the analysis needs to be linked to business outcomes and strategic goals if the insight is ever to be seen as essential for growth.
HR’s skills gap: HR often lacks the skills needed to carry out the complex statistical analysis required and too few people in HR know the difference, for example, between regression and correlation. Until HR teams address their own skills gap, they are unlikely to adequately influence others across the business.
Technology could be a huge help to HR teams in tackling these issues, Bolton suggested. Using cloud storage in conjunction with the HR management system would ensure data is easily accessible and well integrated with the business. He also recommended HR should focus on pulling together internally collected information with social media.
“Most organisations now possess a wide range of quantitative and qualitative information, but it isn’t being connected and as a result is nothing more than a well kept secret. That needs to change if HR is to gain a seat at the Boardroom table but, more importantly, it must change if organisations are to be able to plan for the future effectively,” said Bolton.