Employers face an unprecedented combination of digital disruption and workplace transformation. HR functions need to redefine their roles if they’re to make the most of change. But what does the future of HR really look like?
How can HR functions get fit for transformation? That’s the question at the heart of KPMG’s latest Future of HR report, which explores the gaps between those ready to embrace disruption and those more likely to be shaped by it.
I hosted a round table of senior HR leaders in Birmingham to explore these themes in greater depth. That included workplace transformation and how HR functions should prepare for a digital future. Here’s my own personal take on the conclusions we reached.
For me, the first point to understand is that transformation is not just being triggered by technology; it’s being driven by customers. Organisations need to become far more nimble, agile and customer focused. That not only puts HR functions centre stage in helping firms to evolve; it means they need to transform themselves too. The ability to embrace change, rather than see it as a threat, is critical.
So far, so good. But few workforces are fully ready for the transformation journey. Most businesses need new skills, especially in the technology and data arenas, and need to embrace new ways of working. HR functions need to help the organisation adapt while ensuring that technology and transformation are among their own core skill sets.
The need for new skills is only part of the puzzle. It’s equally important for HR to take the lead in shaping organisational culture. Firms need a culture that views the shift to a more flexible, customer-centric culture as a genuinely exciting development. Authenticity is vital. Without it, organisations will never retain or motivate up and coming Millennials, who place a high value on personal flexibility and satisfaction.
When it comes to executing transformation, most organisations are still not making the most of their people data. A good framework for data analysis is vital to deriving decision-quality insights from an unwieldy information deluge. So it’s no surprise that many HF functions are developing new data frameworks. Our survey shows that 60% of HR functions plan to invest in predictive analytics, and 53% in enhanced process automation.
But experience shows that firms aren’t always best served by pinning their hopes – and their budgets – on a single, big system. Yes, they can perform well, but they’re costly and don’t always live up to expectations. Reliance on a single platform also carries a risk that technology defines the transformation, instead of the other way around. Some HR functions find it’s better to use specific tools to address individual data problems.
Finally, data analytic skills alone are not always sufficient. HR functions need data storytellers too. The ability to put analytic insights into a human context is crucial to integrating human and machine capabilities in the workplace.
The importance of implementing technology in a smart way means that agile transformation is becoming another vital HR competence. Courage and confidence – the willingness to try ten new tools even if only one or two succeed – is one key aspect of this. Working closely with contacts across the business is also vital to focusing on improvements that meet the needs of customer-facing teams, instead of taking a ‘because we can’ approach. And once again, culture is vital to bringing people along on transformation journeys. HR not only needs to lead by example in embracing new technology. It also needs to respond to employees’ emotional feedback, helping individuals to change and convincing them of the value of innovation.
In short, the rapid advance of digital disruption leaves HR functions needing to re-establish their value to the organisations of which they’re a part. Technology and data are clearly central to redefining the role of HR, but automation has its limits. People are best equipped to deal with complex human problems, and this will only become more important as innovation and creativity take centre stage. And HR needs to maintain its grip on the organisation’s ethical compass. Above all, HR functions need to establish a core strategic role and demonstrate clear commercial value. That means getting closer than ever to the business, understanding its needs, delivering resources and helping the firm as a whole to continually transform itself.
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