Half of the change programs in India lack a HR business case

26 October 2017 Consultancy.in 3 min. read

According to a study by KPMG, nearly 60% of Indian firms have reported that they lack an established business-case for HR transformation. The survey has a specific focus on technology based industry disruptors, and how firms are adapting to constantly shifting circumstances.

Technology has brought about disruption in businesses across the world. As a result, firms have had to introspect and engage in reorganisation in order to keep pace with technological advancement and all that it has to offer. Most firms have automated a large portion of their processes, enhancing efficiency and cutting costs. However, one segment that remains highly under-developed with respect to technological advancement is that of HR.

On a yearly basis, Big Four consulting firm KPMG conducts an HR Transformation Survey to track the progress of the HR segment in light of technological advancements. This year, the firm interviewed 887 executives from 48 countries for the survey. While the results of the survey were more or less a mixed bag, the report revealed that 59% of organisations across the world did not have a business case in place to evaluate the impact of HR initiatives.

The numbers in India are reflective of this trend. A business case is essentially an evaluation of the current status, and an elucidation of the desired status of any given business problem. Within India, 59% of the firms surveyed appeared not to have a business case for HR initiatives, despite the number of initiatives themselves being on the rise. The absence of a business case may also be leading to dilution of impact, with 85% of the surveyed executives reporting that HR restructuring efforts did not produce the desired Return on Investment (ROI).

State of HR change programs in India

109 of the surveyed executives were from India. While the numbers above reflect a challenging scenario, the overall trends in the HR segment appeared promising. In general, spending on HR increased substantially over the last year. While 43% of the firms spent around the same amount on HR as the last year, 39% spent higher (up to 20%), and 7% spent much higher (more than 20%) in 2017. Only 4% had spent lower (up to 20% reduction) this year and 7% much lower (more than 20% reduction).

In July this year, KPMG released a report predicting an increase in the amount of HR investment in the Indian automotive component industry in years to come. Consistent with the HR segment across industries, the report highlighted the importance of data analytics as well as the transition of key processes to a cloud platform in order to increase efficiency and cut costs. The report also highlights how technological investment can help with talent management, as geographical and connectivity barriers no longer exist.

The importance of these areas is also reflected in the investment patterns within the HR segment in India. The largest area of investment in India, as per the report, was talent management at 56%. This was followed by HR data and analytics at 44%, onboarding at 38%, payroll at 36%, and transformation of the HR portal at 33%. Respondents agreed that the same areas are set to grow even further as they remain the most attractive areas for investment.

Commenting on the survey results, Partner for BPS-People and Change for KPMG in India, Vishali Dongrie said, “Most respondents are currently involved in HR transformation. Overwhelmingly, most of them have a modest and traditional view of projecting HR transformation with systems and processes.”

Related: Indian automotive sector to focus more on HR technology.