HR ‘faces crisis of credibility in the boardroom’

Nick Elvin

HR leaders are facing a crisis of credibility among their senior peers, due to an over-reliance on instinct when making decisions.

That’s according to new research by KPMG, which shows that one in five C-Suite executives (19%) think their HR strategy doesn’t take into account hard data relating to their business or staff.

The report, entitled “Evidence-based HR”, also indicates that HR leaders are failing to prove the value of their work in the context of wider business, with another one in five C-Suite executives (21%) surveyed stating that they can’t see tangible correlations between the HR function and business outcomes. The findings are based on a global survey of 375 executives.

The use of data is perceived as increasingly important in matching talent to business strategy, says KPMG. McGraw Hill Financial, one firm that took part in the research, explained that in order to forecast attrition within their workforce, they employed a profiling system that helped the company predict those members of staff most likely to leave the organisation.

Mark Williamson, partner in KPMG’s People Powered Performance team, said: “CEOs across the globe are grappling with issues such as rapidly changing customer needs, increased regulatory requirements, a dynamic competitive environment and the introduction of new disruptive business models.

“Deciding how best to respond to this and win through their workforce has never been more critical. HR has a massive opportunity to demonstrate the value it adds to the delivery of this. However, C-Suite executives remain sceptical and perceive that much of what happens in the name of talent management, performance and reward does not provide the solutions that they need.

“Although management of people will never be an exact science, HR leaders must try to create a line of sight between what they do and how business objectives are delivered. Over the next five years HR must deploy a more evidence-based approach to their work in order to achieve this and demonstrate to business leaders that people performance is at the heart of driving business performance.

“Only a minority currently employ advanced analytics and big data approaches within their HR functions. Although many expect to adopt a more evidence-based approach in the coming years, HR leaders need to ensure they have the skills to drive workforce analytics across their organisations.

“This may require hiring more data-literate professionals into the function, as well as ensuring that existing HR professionals are capable of communicating the business relevance of their findings to senior leaders.”