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The COVID-19 pandemic has rapidly made people the number one priority in nearly every organization around the world. As a result, HR leaders are now at the forefront of reshaping the way work gets done. This has created a new opportunity for the HR function to switch from firefighting immediate pressures to strategically engineering a successful future.

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KPMG HR Pulse Survey Global Results

Our KPMG 2020 HR Pulse Survey reveals that the workforce will change ’shape’ dramatically over the next two years. To deal with these changes, more than two-thirds of HR executives (69 percent) believe the HR function needs to completely transform itself to respond effectively.

Reshaping the work force: in the next 12-24 months

3 in 10 will likely need to be reskilled
39 % will continue working remotely
Almost 2 in 10 will be made redundant

As a result, the priorities of the HR function have shifted.

KPMG!
47 %

taking steps to safeguard the experience and well-being of employees


KPMG!
38 %

helping leaders develop new management and leadership skills to support remote working

KPMG!
34 %

redefining/further enhancing the culture to emphasize digital mindset, virtual working, agility, etc.

   

Reskilling for the future

COVID-19 and remote working have dramatically changed the required skill sets for both employees and leaders. The C-suite now sees talent development as key to future success. Pre-COVID-19, CEOs ranked talent risk behind 11 other risks to long-term growth. In the recent KPMG 2020 CEO Outlook survey, “talent risk” has risen to the number one threat. Similarly, in the KPMG post-COVID-19 CIO survey, 62 percent say skills shortage is preventing their organization from keeping up with the pace of change.

72 percent and 33 percent

Significantly, the HR survey revealed that 35 percent of employees are expected to need to be reskilled in the next two years—much of it is likely due to the implementation of advanced technologies. This is not going to be easy, as traditional face-to-face learning formats are no longer an option. It requires HR leaders to embrace digital learning solutions and learning in the flow of work, and to invest in technology platforms. Fifty-four percent of HR respondents plan to make their biggest investment in learning and development platforms.

Top areas for HR investment

The role of HR

While 88 percent of respondents agree that HR has played a leading role in their organization’s response to the impacts of COVID-19, a striking finding from the survey shows disagreement between CEOs and CHROs about the role of HR. About 60 percent of CEOs and executive vice presidents (EVPs) surveyed say that their organizations consider HR to be an “administrator” rather than a value driver; 74 percent of CHROs disagree with that statement.

What they both agree on though is the need for the HR function to completely reinvent and transform itself in order to respond more effectively to future disruption.

Close to 7 in 10 HR Executives - Infographic
CEOs and EVPs - Infographic

What is particularly interesting is how an elite performing group of HR organizations—we call them Pathfinders —emerged again this year—roughly 10 percent of the survey population. They have reacted differently across areas that are critical to the HR function, despite facing similar environmental and economic challenges as others.

 

Harnessing the power of analytics and technology

There is no doubt that the priorities and investments of the HR function have shifted as a result of COVID-19. As employees transitioned to a predominantly remote work environment, HR was faced with fresh challenges. Not surprisingly, maintaining employee productivity and safeguarding their well-being were among the top ones.

Thirty-two percent of respondents ranked adopting digital technologies to support remote working and collaboration as one of the most important initiatives to manage the implications of COVID-19.

As a result, investment priorities in technology have shifted to focus on enabling employees to work in a remote environment.

2020 investment priorities in technology
2019 investment priorities in technology

Surprisingly, the survey data also showed that HR functions are less confident in their ability to use data and analytics compared to 2019. Additionally, while “Conducting workforce forecasting” and “managing performance and productivity” continue to rank among the top five skills required by the HR function, “applying analytics and data science” is now a much lower priority.

21 percent in 2020
24 percent in 2019

This could have costly implications. If HR does not continue to invest in workforce analytics, it may hinder the success of their near-term investments. Technology to support learning and remote working is key to addressing current demands, but HR needs to be able to monitor the impact of those efforts. Data and analytics will also help the function to identify which activities to automate and what skill gaps it will need to fill through new hires or partnerships.

Using evidence-based HR

Evidence-based HR uses data, analysis, and research to understand the connection between people management practices and business outcomes, such as profitability, productivity, customer satisfaction and quality. Using this approach is vital for the HR function to ensure that is focused on activities that deliver the most value to the organization.

 

Key insights

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