Picture the start of a typical week. The CEO needs clarity on an emerging internal skills gap, the finance director wants updated workforce cost projections, and a manager is asking for help with rising staff turnover.
Requests like these are now the norm. HR has shifted from a policy and compliance function to a strategic partner expected to deliver business-critical outcomes. In fact, more than three-quarters of HR leaders globally say their role has become more strategic over the past five years, with growing pressure to influence transformation, shape talent strategy and deliver measurable results.
Yet, many HR teams still depend on outdated methods to prove value. Traditional metrics, such as headcount trends or absence rates, capture only part of the picture. They rarely show how HR decisions impact commercial outcomes. So how can HR demonstrate its real impact?
Turning everyday HR work into business intelligence
HR sits on a mountain of data, but the challenge is turning it into actionable insight. With more than half of HR leaders expecting pressure to prove measurable strategic impact within the next five years, connecting people data to business performance is no longer optional.
Leaders must translate HR workflows into insights that influence KPIs directly. Metrics like retention rates or onboarding duration should link to productivity, cost efficiency, and competitiveness. However, the issue isn’t a lack of data – it’s a lack of structured, accessible information. Across the employee lifecycle, organisations collect vast amounts of documentation, including onboarding materials, performance notes, feedback forms and exit records. Too often, this data remains siloed, static and disconnected from decision-making.
The future of HR lies in embedding automation and AI into everyday processes.
McKinsey recommends modernising HR operating models by integrating automation and generative AI. Digitised personnel files, automated workflows, and consistent data create the foundation. Once this groundwork is in place, documents evolve from passive files into active intelligence, enabling HR leaders to make timely, evidence-based decisions.
Real-time visibility helps HR pinpoint inefficiencies, flag flight risks, validate compliance, and refine processes continuously – turning everyday work into a strategic advantage.
Building a HR function designed for KPIs
Moving from reporting to influencing business outcomes requires a structured approach to KPIs. The first step is alignment. HR metrics must reflect organisational priorities, whether that’s improving margins, accelerating growth or boosting productivity.
From there, HR should set KPI across the entire employee lifecycle, from recruitment and development to engagement and offboarding. The strongest KPIs follow the SMART framework: specific, measurable, achievable, relevant and time-bound. These aren’t vanity metrics. They are operational tools that guide workforce planning, surface risks early, and inform investment decisions.
Establishing a baseline is essential. Past performance or industry benchmarks help HR contextualise results and set realistic targets. Modern business intelligence (BI) platforms make this easier by visualising trends in real time and enabling proactive fixes. Regular reviews ensure metrics stay aligned with shifting organisational needs.
For example, a global organisation struggled with inconsistent document handling across departments and subsidiaries. Without visibility into how files were imported or which types consumed the most time, they faced inefficiencies and compliance risks. By capturing and analysing data on login frequency, document uploads, and usage by location and department, HR identified where adoption was strong and where it lagged. The data exposed shadow admin work and resistance to change, enabling HR to deliver targeted support and training.
The power of KPIs comes to life when insights are shared widely. When HR presents data clearly to executive teams, it becomes easier to justify investment, redesign process and continually strengthen the employee experience.
Why this matters now
With employee expectations evolving and generative AI reshaping how work gets done, HR is no longer just a support function. It’s becoming a key driver of business strategy – and to underpin this shift, it must demonstrate measurable influence on organisational performance.
For HR leaders, that means using data to guide long-term transformation. For HR managers, it means optimising operations and elevating the employee experience.
When these capabilities come together, HR transforms into a proactive, data-driven partner that can consistently demonstrate its role in driving business results.
