CIOs are no stranger to the HR department. In the past three years alone, some 70 per cent of HR functions say they have increased their use of mobile or web platforms and nearly half say they now use cloud services within their core operations.

Yet, for the most part, recent technology investments within HR departments seem to have been focused more on efficiency gains (i.e. cost savings) than the pursuit of greater effectiveness. Self-service models improve service efficiency and allow HR professionals to refocus on less transactional activities; online development and training programs have reduced the cost of classroom activities; global IT systems and connectivity have enabled the off-shoring of repeatable processes.

According to Hugh Mitchell, Chief Human Resources Officer at energy giant Royal Dutch Shell, technology has been key in reducing the HR function’s cost base. “From about 2007 to 2011, we took some 40 per cent from the cost base of HR, predominantly on the back of technology,” he noted in a recent KPMG report, adding that technology has “been a big efficiency play”.

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HR 2.0

But while efficiency will continue to be a key focus on the HR agenda, a growing number of people leaders are starting to consider how they might leverage data analytics to deliver more effective HR services to their organisation and – in turn – drive greater value out of the function.

In a recent research study conducted by KPMG International and the Economist Intelligence Unit [1], we found that almost a third of respondents plan to invest in data analytics over the next three years – more than any other investment area.

 We believe that the incorporation of analytics into the HR function will mark a new era in the relationship between HR and the business. Analytics will allow HR to collect clearer information on its ‘talent supply chain’ and will provide hard quantitative evidence to support HR decision making. In other words, data analytics gives HR departments the long-overdue chance to become more empirical, thereby gaining much-needed credibility at the highest levels of the business.