The use of data is perceived as increasingly important in driving business performance through the performance of its people, says Mark Williamson 

We’ve never before had such a rich variety of data available to help HR practitioners make the right decisions. Decisions can, and are, now being made using robust evidence rather than intuition.

Research recently released by KPMG, and conducted by the Economist Intelligence Unit, shows that one in five C-Suite executives (19 per cent) think their HR strategy doesn’t currently take into account hard data relating to their business or staff.

The new report, Evidence-based HR, also shows 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 per cent) surveyed stating that they can’t see tangible correlations between the HR function and business outcomes.

CEOs are grappling with people-related issues such as regulatory change, increasing customer requirements, talent and the demands of the workforce – and my view is that the HR function has a massive opportunity to redefine the value it adds to the delivery of business objectives.

Only a minority of organisations currently employ advanced data analytics within their HR functions. Although many expect to adopt a more evidence-based approach in the coming years, HR leaders will need to ensure they have the required skills to do this. This may require hiring more data-literate professionals in people management roles, as well as ensuring that existing staff are capable of communicating the business relevance of their findings to senior leaders. HR will need to know how to frame the right questions (the hypotheses) that will direct and focus the analytics effort. Without the right hypotheses to test, the effort expended on analytics is just a fishing trip.

The use of data is perceived as increasingly important in driving business performance through the performance of its people. The research conducted by the Economist Intelligence Unit shows that of those firms that utilise data analytics to do this gain significant advantage. And nothing will generate more momentum than the sight of competitors reaping the rewards of an evidence-based people strategy, using it to make or save money.

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. Being able to predict attrition is a valuable skill for any business operating in a competitive market place. Mark Sullivan, vice president, HR insights and analytics at McGraw Hill Financial, explained:  “Armed with that information, we can then decide whether to intervene to prevent key individuals who fit that profile from leaving, whether this be through offering compensation, career development or opportunities in the global mobility program. This is one of hundreds of such tools at our disposal which we didn’t have a year or two ago.”

Some industries will be a more natural home for those with the requisite skills and perspective, thereby accelerating the impact of evidence-based HR. It is worth noting, for example, that nearly two thirds of respondents in the IT and technology sector (64 percent) expect the increasing use of data-driven insights in their HR function to boost profitability by more than 10 percent in the next three years, a substantially greater proportion than in any other sector. But measurable successes from the use of evidence will help to spur the much-needed enthusiasm of senior executives across the business community and encourage investment in developing and recruiting the skills that will cement progress.

Admittedly, the management of people will never be an exact science, but I think HR leaders can, and should, create a better line of sight between what they do and how business objectives are met. Over the next five years, HR practitioners will need to embrace a more evidence-based approach to their work in order to achieve this and enable the wider business to realise the full potential of its people in delivering business results.