Putting the “human” in HCM analytics

Powerful technologies have emerged designed specifically for HR professionals, with Human Capital Management (HCM) analytics at the forefront.

Todd Randolph

Todd Randolph

Principal, Consulting, KPMG LLP

+1 636-887-5000

In the last several years, remarkably powerful technologies have emerged designed specifically for Human Resources (HR) professionals, with Human Capital Management (HCM) analytics at the forefront. The business case for these technologies is strong—the ROI is impressive. Yet, adoption has been surprisingly slow.

HR has historically been last on the list when it comes to technology investment. But I don’t think IT is to blame, or even the CxOs who approve the budgets. I believe the inertia comes from within HR itself.

In a survey of 1,200 global HR executives we did last year, HR appears to be the most resistant of any business function to embracing digital transformation. Among ten potential HR initiatives that the survey explored, analytics ranked next to last, and only 18% of HR professionals said they were confident in conducting advanced analytics.

Intuition vs the cold, hard numbers

There’s a list of reasons why this might be so, from the difficulty companies have extracting structured or historical employee data trapped in their existing enterprise applications to mergers and acquisitions that have created multiple sources of an organization’s applications and data, making it difficult to deal with—all reasonable explanations.

But if I had to guess why, I’d say it’s because HR has always seen itself as a high-touch, extremely personal discipline. HR execs are “people people.” HR is about people and relationships, after all, not impersonal strategies that focus almost exclusively on number crunching.

The inertia inhibiting the acceptance of analytics may be magnified in HR professionals, but it’s not unique to them. In our 2018 KPMG Global CEO Outlook survey, two-thirds of CEOs said they’ve overlooked insights provided by data and analytics models because they contradicted their intuition. Intuition is a powerful seducer that we’re hardwired to trust more than almost anything else.

Except analytics isn’t a replacement for intuition—they’re ideal companions. As the Harvard Business Review once put it, we should no more ignore our instincts than our conscience when it comes to making decisions. But as it went on to say, “Detached from rigorous analysis, intuition is a fickle and undependable guide—it is as likely to lead to disaster as to success.”

Completing the circle

Analytics doesn’t make decisions for you; it makes your decisions better. It can help you quickly and easily evaluate an enormous number of options, far more than any human is capable of doing. Analytics can yield insights that no other method can. Beyond just “interesting” facts (and it will produce some amazing surprises), the real purpose of analytics is to produce actionable insights—meaningful things you can do to make a difference.

Then—and this is perhaps the most important benefit—analytics can show you if the decisions you made and the actions you took had the intended effect. Wonder and hope no more. Analytics’ ability to “complete the circle” can help steer you in directions that produce better and more consistent results, faster and more efficiently.

So, if you can make better, informed decisions that demonstrably improve people’s lives and make them proud of where they work, happier, and more efficient, then embracing analytics even for “people people” really should be a no brainer.

A persona-based approach

Given the challenge of disparate, unstructured, or siloed data, many large organizations can’t agree with certainty on things as simple as how many employees they have. So, it’s not surprising that there may be gaps in their understanding of them, lacking critically important details that could help shape decisions for improving employee satisfaction, productivity, retention, etc.

Recognizing that HR professionals are generally more comfortable with and attuned to interpersonal interactions than those in other functions, we’ve created a phased and collaborative approach that seeks to humanize the analysis and fill in those critical knowledge gaps.

To help you to identify and rationalize analytics, we use personas—fictional characters that represent groups of employees who share certain meaningful characteristics. Personas can help you better understand employee needs, experiences, and goals and make it easier for you to empathize with them by giving you a refined and nuanced perspective of them. Developing personas helps us to understand: Who needs data and what key decisions are the data driving? Where is the data? How will it be consumed? What actions can and should be taken to support employee and organizational goals?

For example, through these personas, we often implement analytic solutions focused on decreasing attrition, increasing employee engagement and satisfaction, enhancing productivity, and accelerating overall business results by putting the right analytics in the hands of those who can make a difference through action. We do this by considering the persona’s unique needs and role: are they a leader with large or small headcount? Are they responsible for a business or segment within the organization in addition to their duties as a leader? How much of their job is spent in the core HCM system versus other operational systems, and what is the best distribution mechanism to “meet them where they live” and ensure data gets in their hands when it’s needed most?

There is no one right set of personas or analytics that work for every company. Your industry sector, company size, locations, existing and desired culture, and, of course, a unique mix of employees will all determine which personas and analytics are the ones that make the most sense for you.