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Evidence-based HR

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Evidence-based HR

  1. 1. Evidence-based HR The bridge between your people and delivering business strategy
  2. 2. 1© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The Time for HR is Now There has never been a better time to be involved in delivering the people agenda. “ ” Mark Spears Partner, Global Head People and Change & Global Lead for HR Center of Excellence KPMG in the UK
  3. 3. 2© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. CEO issues ■ Technology and business models are evolving faster than individuals skill sets. Ensuring you stay competitive starts and ends with talent. Talent ■ Disruption from new entrants is changing the competitive landscape and forcing new regulations. Decisions are no longer guided by just current regulations, but also potential future regulations. Regulatory requirements ■ Gone are the days of ‘traditional’ employee, we are in an age of experimentation and building a workforce that is unique to the organization. Demands of the Workforce ■ Tracking and analyzing the customer through the OmniChannel experience why ensuring privacy and security of data is an incredibly complex task. Customer Requirements
  4. 4. 3© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Disagree Intent to embrace an Evidence-based approach 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 organization. 70% 20% 9% 65%26% 9% 73%20% 7% Source: Evidence-based HR: The bridge between your people and delivering business strategy, 2015 Agree Don’t know/Not applicable
  5. 5. 4© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Defining 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.
  6. 6. 5© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Demonstrating Evidence-based HR 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. We have HR and workforce data; we need financial performance and customer data. 4 Analyse the data: what is it telling you? Think about the best visualization 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.
  7. 7. 6© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Early adopters of Evidence-based HR Through evidence-based HR, McDonalds now knows that having at least one employee over 60 dramatically improves customer satisfaction, on average by 20% and boosts performance in a fast food outlet 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.
  8. 8. 7© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Evidence-based HR still embryonic With new technology's and processes, evidence-based HR has become a viable option. Other business functions have experienced the same trend, but the adoption of evidence-based models far outweigh that of HR. It is only during the last two to three years that we have been able to produce datasets that stand up James Stringer Information Services Director, Unilever “ So why has it yet to gain momentum…
  9. 9. 8© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Skills deficit Harmful impatience Over-reliance on science Skepticism about HR Disorganized data Cultural resistance There are still bumps in the road that we must face HR is currently suffering from a perception problem. Less than half (49%) of respondents agreed that HR leaders are able to clearly demonstrate tangible correlations between people management initiatives and business outcomes. 1 Most HR functions do not possess and are not actively attracting individuals with both analytical prowess and commercial acumen, which is imperative when building an evidence-based model. 2 Organizations that operate in silos create an added layer of complexity. These silos will have different methods of operation and governance structure, meaning the data obtained will organized and stored in an inconsistent manner 3 Evidence-based HR is not a plug and play solution. There are many steps that involve transforming both the technology and culture. Once the transformation is complete patience is still required to ensure all the basics (i.e. clean data) are consistently completed. 4 If anyone understands individuals resistance to change it is HR. Cultural resistance is a massive hurdle that comprises aspects of the first 4 bumps. 5 Evidence-based HR is about gaining knowledge to make informed decisions. However, someone still has to make a decision. The data can only lead you in a direction, it can not make a decision. 6
  10. 10. 9© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Roadblocks exist Corporate culture, lack of skills and quality of data are considered major roadblocks in transitioning to an evidence based HR approach. Source: Evidence-based HR: The bridge between your people and delivering business strategy, 2015
  11. 11. HR is not a soft science anymore, it is about hard numbers, data!
  12. 12. 11© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Familiarity with data and analysis: Going beyond tracking KPIs about HR function activity and truly accessing different data sources that when analyzed will deliver predictive insight about the role of people in the business. Greater knowledge of the industry and organization: HR is not a generic practice nor industry agnostic. It must apply an HR perspective to its own industry and to the specific needs of the company, its value chain and strategic direction. Reconfiguring HR functions: Management and HR need to work together within an operating model that promotes evidence-based people management. Three critical success factors HR needs to address… 1 2 3
  13. 13. 12© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. QuestioningSkills for Evidence-based HR practitioner Persuasive Creativity Aware of the importance of visualization 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. Capable of understanding how people drive value in the organization can distinguish cause from effect, as well as able to interpret the downstream consequences of past, present and future interventions. Able to challenge the thinking of line managers and moving the debate and the process forward. Doesn’t need to be a data scientist, but will want access to someone with those skills. Ability to look at a problem in a variety of ways including visualization. Understanding that answers exist outside of basic metrics. Being able to identify hidden internal/external variables impacting people and the organization. Asking questions outside the normal realm. Industry Insight Ability to identify and understand industry benchmarks & trends, and how the organization compares to its competitors in the same industry. Systems Thinker …which requires a new set of skills
  14. 14. 13© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The route to progress is paved The sentiment towards HR is changing for the better: We are seeing a move amongst early adopters in the HR community towards embracing big data and becoming more evidence-based. It is not yet widespread but we believe that it is just a matter of time Over the same period, the proportion who say the function excels at measurably proving the value of HR to the business rose from 17% to 25%. The proportion of respondents who say their organization’s HR function “excels” at providing insightful and predictive analytics increased from 15% – in a 2012 EIU survey sponsored by KPMG-- to 23% in 2014 Source: Evidence-based HR: The bridge between your people and delivering business strategy, 2015
  15. 15. 14© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
  16. 16. 15© 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Meet Harry Ross – The HR Detective These days, business runs on evidence and evidence-based HR.“ ”Read Harry Ross’s report: Evidence-based HR: The bridge between your people and delivering business strategy Watch Harry Ross solve cases: All about the evidence – Bank Job All about the evidence – Brewing a Strategy All about the evidence – Caring Solutions Join the conversation #TimeForHR
  17. 17. © 2015 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. kpmg.com/socialmedia kpmg.com/app Contact Us: Mark Spears Partner Global Head, People and Change & Global Lead, HR Center of Excellence E: Mark.Spears@KPMG.co.uk Harry Ross HR Detective E:HarryRoss@kpmg.com

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