Early adopters of evidence based HR are using data to show connections between HR and business KPIs and opening doors to new processes and people strategies that impact the bottom line of the organisation, according to an Economist Intelligence Unit research report.
It found that 85 per cent of the 375 executives surveyed for the report agree that their company’s HR function plays a strong role in meeting the organisation’s strategic goals.
However, 30 per cent cite lack of skills/resources/experience to perform required analytical activities as a major obstacle to the use of evidence in people management within their organisation.
Despite this, 82 per cent of executives expect their organisation to either begin or increase their use of big data over the next three years. You can read further on the how big data can be harnessed in HR here.
In order to make the shift to evidence-based HR, HR functions need to be reconfigured so that HR and management work together within an operating model that promotes evidence-based people management, according to Mark Spears, partner and global lead for HR Center of Excellence in the UK for KPMG, which sponsored the report.
“As much thought should go into designing the components of the operating model that will allow for the use and consumption of the evidence as is given to the actual generation of evidence,” said Spears.
The report found that the progress of evidence-based HR is hampered by a negative perception of the HR function, and 55 per cent of surveyed executives remain sceptical about the potential of evidence-based HR to make a real difference to the HR function.
One stumbling block may be the credibility of the HR function. Less than half of non-HR executives (49 per cent) agree that HR leaders are able to demonstrate tangible correlations between people management initiatives and business outcomes.
In other words, the scepticism is not about big data but about HR practitioners’ ability to use it effectively, according to the report.
“There may be concern that the HR function does not have enough of the right people in place for this new era,” said the report, which noted that about 30 per cent of all survey respondents rate lack of skills, resources and experience with analytics as the second biggest obstacle to the use of evidence in people management, behind only corporate culture.
“Whatever the obstacles, and whatever the resistance, the growth of evidence-based HR will gain momentum; companies and HR practitioners must respond urgently to avoid losing ground,” the report said.
Several factors will help ensure the progress of evidence-based HR, and the report suggested a new breed of HR practitioner, schooled in analysing and interpreting data, will slowly emerge as a consequence of this commitment.
“The real boost comes when evidence is not just used to solve or react to problems such as employee turnover, but makes a major positive business impact,” suggested Paul Sparrow, director of the Centre for Performance Led HR at Lancaster University Management School, in the report.
“Noteworthy business successes from the use of evidence-based HR, establishing clear links between aspects of people management and revenue, are already emerging,” said the report.
“To stay ahead of the competition, HR directors need to obtain the necessary commitment from company decision makers to invest in changing the skill profile of the HR function, so that it can boast a potentially powerful combination of analytical acumen and the always-crucial human insight.”
HR should also get comfortable with data, and move beyond basic HR KPIs to data that can deliver predictive insights about the role of people in the business.
To do this well, the report suggested that data scientists may be required to work within the HR function.
HR practitioners should also hone their industry knowledge. “HR is not generic nor is it industry agnostic,” the report said.
“You must apply what you know from an HR perspective to you industry and the specific needs of your company. You’ll need to know how to frame the questions that will direct and focus your analytical efforts.”
The last step recommended in the report is changing HR structures. “HR should be reconfigured so that HR and management work together within an operating model that promotes evidence-based people management,” said the report.
4 key skills required for evidence based HR
- Persuasive: Aware of the importance of visualisation of data analysis in order to lead the viewer to the required decisions. Able to tell a story with data using facts, opinion, anecdote and metaphor. Makes the analysis come to life.
- Questioning: Able to frame hypotheses with business leaders. Doesn’t need to be a data scientist, but will want access to someone with those skills.
- Systems thinker: Capable of understanding how people drive value in the organisation and can distinguish cause from effect, as well as able to interpret the downstream consequences of past, present and future interventions.
- Creativity: Ability to look at a problem in a variety of ways – including visualisation. Understanding that answers exist outside of basic metrics. Being able to identify hidden internal/external variables impacting people and the organisation. Asking questions outside the normal realm.
Source: Evidence-based HR: The bridge between your people and delivering business strategy
