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Workforce shaping is HR's defining challenge

Workforce shaping is HR's defining challenge

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First, what do we mean by “workforce shaping?”

— It’s taking a scenario-based approach to defining the required workforce in 5–8 years’ time.

— It’s understanding how digital disruption and AI will change the overall shape, size, composition, and skills in the workforce and how humans and machines will work together to drive business value and a high-performing workforce.

workforce shaping is HRs defining challenge

The impact of the Fourth Industrial Revolution — the term used to describe the convergence of AI, RPA, Machine Learning (ML), and cognitive platforms — is forcing teams to shape their workforces to consist of all worker types, including permanent, gig, contingent, and machine. To use the 4Bs vernacular: buy, build, borrow, and bot.

This Fourth Industrial Revolution has irreversibly altered the genetic make-up of the modern workforce. Indeed, the Big Innovation Centre estimated that 65 percent of our jobs will not exist or will be done in totally new ways within 10 years.3 Three in five HR executives from our survey agree, as they did last year, that AI will eliminate more jobs than it creates. Yet, the 2019 Global CEO Outlook, in contrast, confirmed again that CEOs continue to be more optimistic on the matter, with close to 70 percent expressing that AI will create more jobs than it eliminates. Regardless of what might happen, we must prepare for it, one way or another.

Over half (56 percent) of the respondents to our HR survey agree that preparing the workforce for AI and related technologies will be the biggest challenge for their function. And while most (87 percent) are prioritizing efforts around how to identify the future workforce composition (the 4Bs) HR leaders still seem uncertain about the best approach to do that. Some organizations have started replacing the debatable certainties of supply and demand forecasting of traditional workforce planning with workforce shaping to deal with the impacts of automation and AI.

Committing to workforce shaping

The importance of using workforce shaping to break down and rethink traditional roles is largely understood by HR functions across the globe. For example, Kristie Keast, Chief People Officer at steel-maker BlueScope, confirms that the transformation is in full swing within her business and that it is a normal outcome of constantly challenging the status quo to do things better. “We are currently grappling with what the industrial revolution 4.0 means in terms of the displacement of the workforce, and the workforce planning we need to implement around this,” she says. “While the automation of processes such as crane machinery within BlueScope has given us the opportunity to bring down costs and improve productivity, we do need to take into account the potential for the displacement of workforce or jobs. Workforce shaping is central to this aim, in order to accommodate new roles that might become apparent, and enabling employees to move seamlessly between vocations wherever possible,” says Keast.

To meet the future needs of their organizations, HR needs to actively challenge who — or what — carries out the majority of traditional tasks. Ninety percent of Pathfinding HR organizations cite that identifying the future workforce composition is a strategic priority, and approximately 80 percent believe they are largely prepared to do so. However, over half of their counterparts report they are either not particularly, or not at all, prepared.

“Workforce shaping is not a case of doing traditional workforce planning harder and faster. In fact, workforce planning still has a role to play in many organizations. But from discussions with clients who are at the forefront of digital disruption, we find that workforce shaping should generally come first. It frames the more operational decisions and creates the context for action. It is, many clients argue, a new discipline for HR,” elaborates Paul Lipinski, Principal and Head of Human Capital Advisory at KPMG in the US.

© 2020 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with 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.

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