An inability to interpret and understand data is preventing organisations across the UK from predicting trends and planning for their long-term future, according to the Co-leader of KPMG’s Global HR Centre of Excellence.
Presenting his views in a white paper called ‘People are the Real Numbers (PDF 667 KB),’ Robert Bolton argues that, despite accepting the value of analytics, most HR teams continue to provide Boardrooms with generic operational measurements. The result, confirmed in a study published by the Economist Intelligence Unit and KPMG, is uncertainty and distrust, with 85 percent of c-suite executives claiming their HR teams “fail to provide insightful analytics.”
Bolton suggests that the current “rear view mirror” approach must be challenged if HR teams are to provide value to their organisation. He says: “HR’s current approach remains anchored in the present and the past. Whether it’s about staff turnover, diversity statistics or promotion rates, it’s all about what’s gone before. Yet what really matters is tangible intelligence about what’s going to happen tomorrow, next year or in ten years time – and why that will be important to the business.”
He identifies three key factors preventing HR teams from unlocking the full potential of analytics and, with it, credibility in the eyes of the Boardroom. These are:
- data fragmentation: too many systems exist, within organisations, 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
- lacking hypotheses: analysis, where it is attempted, focuses on basic workforce metrics. Too much attention is given to reporting data and unless this is linked to business outcomes and strategic goals, it will remain ‘nice to have’ rather than ‘essential for growth’
- HR’s own skills gap: in many cases HR lacks the skills required to carry out the sort of complex statistical analysis required and too few people in HR know the difference between regression and correlation. Until HR teams address their own skills gap, they are unlikely to adequately influence others across the business.
However, Bolton suggests that HR teams can tackle these issues by making better use of technology. In ‘People are the Real Numbers’ he makes a case for using cloud storage, in combination with HR management systems, to ensure all data is easily accessible and integrated with other parts of the business. He also suggests that HR should focus on the value of ‘social data’ – ensuring that any internally collected information is integrated with social media to create a more complete picture.
Bolton concludes: “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. 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.”
Mike Petrook, KPMG Press Office
020 7311 5271 (t), 07917 384 576 (m) or firstname.lastname@example.org
Notes to Editors:
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 12,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 professionals 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. KPMG International provides no client services.