What HR Needs to Do to Not Get Left Behind

KPMG research explores the impact of new emerging technologies on employers.
By: | February 28, 2019 • 3 min read
HR transformation

A new survey of 1,200 global HR executives exposes a clear gulf between action and inertia when it comes to making an organization’s digital transformation. KPMG International’s Future of HR global study reveals that HR leaders have conflicting attitudes and approaches to the challenge.

The findings suggest forward-looking HR leaders are confidently harnessing the resources and insights that will redefine the traditional HR model and its contribution to the enterprise by following strategic plans and implementing new technologies such as analytics, digital labor and artificial intelligence.

But they also highlight a much larger segment of less-confident HR leaders who are demonstrating either a wait-and-see approach to change or doing nothing.

And that’s too bad, because the quantitative and qualitative business case for digital transformation “is incredibly strong,” according to KPMG U.S. Advisory People & Change Managing Director David de Wetter.

“Virtually every organization we have helped to transform has quickly recognized significant financial savings and other efficiencies,” he says. “Fewer assets are required to perform tasks that effective technologies can deliver—often more quickly, consistently and accurately.”

Perhaps most important, he says, is the idea that digital transformations free up resources to focus on delivering higher value through added work to the organization.

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Yet despite this, only 41 percent of survey respondents said they recognize the need for workforce transformation. Why haven’t more HR leaders recognized this need yet?

It’s because the typical HR function focuses on the basics—performing required administrative and operational activities—while only giving some thought to more strategic thinking, de Wetter says.

“Many HR functions have not yet focused on the larger, more strategic challenges driven by rapid change,” he says. “By not understanding and analyzing the new capabilities required by organizations, HR has not fully recognized the need to transform the workforce.”

HR actually is struggling to understand the profound shift in needed skills and capabilities, he says, while remaining wedded to supplying the “hot skills” of today.

Additionally, a fear of change may be holding some HR organizations back, he says.

“There may be a certain inertia among organizations to lead them to sit on the sidelines and take a ‘wait and see’ approach to understand where all of this change is going.”

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But the main HR takeaway advice for HR leaders from this report, according to de Wetter, is simple: “Get moving or get out of the way!”

The magnitude and pace of change cannot be overstated, he says, adding that 72 percent of CEOs say that rather than waiting to be disrupted by competitors, their organization is actively disrupting the sector in which they operate.

“People play a significant role in defining and driving this disruption,” he says, “and HR is responsible for building the capabilities, delivering the talent, and shaping the culture of the organization needed to prosper in the disrupted environment.”

However, while digital transformation may be many things, de Wetter cautions, one thing it is not is instantaneous.

“If you begin work today, you may begin to experience some benefits next year, but only accrue significant gains starting in 2021,” he says. “How long do you want to wait?”

Web Editor Michael J. O’Brien has been with HRE for more than a decade and holds a degree in economics from Boston College. He can be reached at [email protected]