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COVID-19 thrusts HR to the forefront of business productivity, workforce models, and culture mobilization

COVID-19 thrusts HR

Four in ten employees will continue to work remotely. A third of employees will require reskilling or upskilling. Two thirds of HR executives believe the HR function must be reinvented.

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Majid Makki, Director – Management Consulting and Head of IT Advisory

Director – Management Consulting and Head of IT Advisory

KPMG Advisory W.L.L.

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The majority of organizations will see their workforces change ‘shape’ dramatically over the next two years, according to the nearly 1,300 Human Resources (HR) executives who took part in the KPMG 2020 HR Pulse Survey in July/August. To deal with these changes, more than two thirds of HR executives (69 percent) believe the HR function needs to completely reinvent and transform itself to respond more effectively.

“HR must swiftly transition from putting out the fires of the immediate impact of COVID-19 and its aftermath and switch to playing the long game of shaping the workforce of the future for their enterprises. But this switch requires new mindsets, skills and priorities,” said Robert Bolton, Head of Global People and Change Center of Excellence, KPMG International. “Lasting impacts, including the fact that nearly 40 percent of employees will continue to work remotely and perhaps others in a hybrid model of attendance, means that a new reality has to be contended with. The pandemic has presented HR with a significant opportunity to transform not just the function, but the enterprise itself.”

The survey revealed that more than three in 10 employees (35 percent) will need to be reskilled in the next two years. Tellingly, talent risk is also top of mind for CEOs, rising eleven places as the largest threat to businesses according to the recently released KPMG 2020 CEO Outlook.

New problems require new approaches to problem solving

Study findings show that the priorities of the HR function reflect the enormous effects of COVID-19. The top-ranked initiatives are: 1) taking steps to safeguard the experience and well-being of employees (47 percent); 2) helping leaders develop new management and leadership skills to support remote working (38 percent); and 3) redefining or further enhancing the culture to emphasize digital mindset, virtual working, and agility (34 percent).

Lessons from the Pathfinders

An elite group of HR organizations, identified as ‘HR Pathfinders,’ emerged again this year— roughly 10 percent of the survey sample. They report stronger performance across several areas that are critical to the HR function. Pathfinders are more confident that their organization can attract and are more likely to retain and develop the talent needed to meet growth objectives (96 percent versus 81 percent). Continuing that optimism, Pathfinders rate that they are better adapting to the new reality (46 percent versus 25 percent). They are also more likely to invest in leading technologies – focusing less on replacing core systems and more on artificial intelligence and custom app development. Perhaps not surprising because of technical prowess, Pathfinders are more proficient than others in using data analytics to target and recruit the future workforce.

Robert Bolton concluded: “We should heed the lessons from the Pathfinders in this study. They often seek to own the entire employee experience for their organization, and thus they are vital in establishing the right culture. This is the model all HR leads should be following.”

Additional key findings:

Reskilling the workforce

  • More than three in 10 employees (35 percent) need to be reskilled.
  • Building talent through upskilling and reskilling is seen as one of the important factors in shaping the future workforce (72 percent).
  • Government and public sector organizations, educational institutions, and hospitality companies report the greatest reskilling needs.

Technology investments

  • The largest investment is in new or updating learning and development platforms (54 percent).
  • Collaboration tools to support remote working was a close second tech investment (53 percent).

Top three capabilities required by the HR function

  • Delivering transformational change management (44 percent).
  • Managing performance and productivity in a predominantly remote environment (40 percent).
  • Delivering on the agenda for transformational learning and upskilling/reskilling the workforce (36 percent).

About the survey

The HR Pulse 2020 survey covers 1,288 HR executives in 59 countries and territories (with majority representing from the largest economies in the world) and 31 key industry sectors (such as asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications).

A third of the companies (33 percent) surveyed are C-suite and 29 percent are HR executives such as senior vice presidents. Approximately 32 percent of companies surveyed report an annual revenue of US$1B+.

The survey was conducted in from July 21 to August 7. Note: some figures may not add up to 100 percent due to rounding.

Throughout this press release, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

About KPMG International

KPMG is a global network of professional firms proving Audit, Tax and Advisory services. We operate in 147 countries and territories and have more than 219,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Learn more at home.kpmg.

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