It’s Now Or Never For HR’s Digital Transformation

KPMG study finds that HR leaders who invest in emerging technology will succeed in the digital age

Change in the digital economy is inevitable. Yet, KPMG’s recent Future of HR global study reveals some of the conflicting approaches that today’s HR leaders are taking to respond to the changes redefining business and HR models across business sectors and industries.
 

The new study, “The Future of HR 2019: In the Know or in the No” shares that confident chief Human Resources officers (CHROs) are starting to invest in the future. The research found that a healthy number of the 1,200 HR leaders surveyed say they are confidently harnessing the resources and insights that will help redefine the traditional HR model and its business contribution.

Over the couple of years, many HR leaders are planning investments in areas such as predictive analytics (60 percent), enhanced process automation (53 percent) and artificial intelligence (47 percent). These HR pros boldly follow strategic plans and implement the emerging technologies of analytics, digital labor and AI and are adding the critical new skills needed to succeed in the digital age.

At the same time, the survey saw a segment of less-confident HR leaders following an unsustainable, wait-and-see approach to change,and simply sitting idle on the sidelines letting progress pass them by. Twenty four percent of HR leaders surveyed are “less” or “not confident” in their ability to transform the workplace and themselves. These same respondents say HR departments are not seen as a value-driver, are not using predictive analytics, are generally timid of AI and have no digital plan in place.

Barriers to Transformation

The research found a variety of factors that contributed to hesitancy. The good news is that HR executives who believe the function has a strategic role to play in their business were more likely to be pursuing digital transformation – 67 percent compared to the 48 percent who view the HR role as unchanged.

Workplace culture is also considered a top barrier to digital transformation for 41 percent of respondents. About one-in-three (35 percent) said their current culture is more task- oriented rather than innovative or experimental.Fully 70 percent of those surveyed recognize the need for workforce transformation, so successful HR leaders will focus on and improve this.

The survey also reveals some apparent disconnects between HR teams and their senior leaders. Sixty percent of HR leaders say they believe AI will eliminate more jobs than it creates. Conversely, KPMG’s 2018 Global CEO Outlook study revealed, 62 percent of CEOs believe AI will create more jobs.

HR leaders tell us that creating a new employee experience – or defining the right employee value propositions (EVP) to match the needs of five generations in the workforce – still seems to be undervalued by senior management. While 50 percent of HR leaders strongly believe EX is valuable to the organization at large, 25 percent rank it as a top initiative for the next year or two. And this is likely because only 16 percent of their senior management has communicated that EX should be a top focus area for HR.  

Future of HR is Now

It’s plain to see the existing,serious gap between HR leaders confidently riding the wave of change and those trailing in its wake. Organizations that don’t keep up, will find themselves behind before they realize what’s happening.

Senior leaders count on the HR function to provide actionable insights into areas such as workforce shaping, employee experience and data and analytics that will help drive the organization’s strategy and increase growth. Forward-looking HR leaders are acting boldly and consistently, viewing HR as a value-driver and utilizing data, predictive insights and artificial intelligence.

For HR teams seeking to get ahead of the digital wave and taking their rightful leadership roles, the future is now.

About the Survey

Learn more about our global survey of HR professionals and explore the findings here. During July to August of 2018, 1,201 senior HR executives from 64 countries participated in KPMG’s “Future of HR”survey, with representation from 31 industries across Asia Pacific, Europe, North America, Middle East/Africa and Latin America. Approximately half of the sample are companies with headcount of 5,000 or more employees, and 42 percent of participants were from organizations with annual revenue of more than US$1 billion.