In most organizations today, the HR function is increasingly viewed as one of the most strategic contributors to the business—a welcome and well-earned turnaround from a few decades ago, when the profession was considered a back-office cost center. Yet with this shift comes increased expectations when it comes to the impact of HR on business objectives, as well as a growing need for strong infrastructure to support talent decisions, which is still lacking in many organizations.
That’s according to a new report from HiBob, which found that ongoing data fragmentation and visibility barriers are inhibiting HR’s ability to capitalize on its full influence on business outcomes.
“While expectations have evolved, the systems supporting HR leaders often have not,” researchers say.
When data is fragmented between people and finance functions, it has a pervasive impact. HiBob found that almost 70% of the 4,700 people surveyed said they are limited in making truly fair decisions about employee pay because of data fragmentation. About 70% report running into permissions issues, and almost half spend up to four hours pulling together data from across systems to inform just one performance review.
It’s a time drain that threatens to stress an already-strapped function, and creates real threats to equity and compliance. For instance, when facing a deadline and time-consuming data access for finance-related people decisions, about two-thirds of HR professionals have made an “educated guess” to inform their decisions. They “default to approximation over precision” out of necessity.
“HR leaders are being asked to act as strategic financial partners—without consistent access to financial context,” the report says.
More than 80% say they could make people decisions that are more cost-effective for the business if they had better access to unified HR and finance data.
The report says such an approach reduces the time it takes for HR to make critical people-related decisions, while improving the quality of such decisions, trust from employees and financial predictability.
“HR is no longer operating at the edge of the business. It is operating at the core,” researchers say. “The profession has moved forward. The infrastructure has not fully caught up.”
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