New research finds four key priorities HR needs to focus on to keep talent top of mind.
By Mike DiClaudio
Today’s HR leaders continue to face disruption on multiple fronts. Constant technology innovation is changing the face of the workplace and the workforce. Unprecedented competition for recruiting and retaining talent is changing the balance of power between employer and employee. HR has to respond if it wants to remain a relevant and influential part of the organization.
KPMG’s recent survey, Future of HR 2020: Which path are you taking?, finds that leading HR organizations have simultaneously targeted four key priorities: shaping the workforce for the future, fostering the right company culture, enhancing the employee experience, and leveraging data and analytics.
1. Ever-changing technology is shaping the workforce for the future. The so-called “Fourth Industrial Revolution”—the convergence of artificial intelligence (AI), robotic process automation (RPA), machine learning (ML), and other cognitive platforms—is changing the nature of work at a foundational level. Having a clear grasp on how to predict and respond to these changes is perhaps the biggest challenge for HR leaders today.
It requires transforming the overall shape, size, composition, and skills needed in the workforce. HR leaders are focused on automating certain tasks and hiring or contracting a variety of worker types (permanent, gig, contingent, and robots) to ensure that their organizations are staffed with the appropriate skills and resources. Organizations also need to put programs in place to upskill workers, particularly to enhance the digital capabilities they’ll need to seamlessly function together with AI and RPA to drive business value.
Workforce shaping is not just a case of doing traditional workforce planning harder and more quickly. Traditional workforce planning tends to anchor the outcomes, but it doesn’t properly factor in the enormous disruption and potential opportunities driven by technology. Workforce shaping forecasts future business scenarios and then works backwards to frame the operational decisions that need to be made for success.
Do not underestimate the scope of what’s needed for workforce shaping and upskilling. Senior leadership needs to provide HR with adequate support and funding in order for HR’s efforts to be successful.
2. Company culture continues to be a differentiator. Company culture has risen to the top of the C-suite agenda, according to KPMG’s 2019 CEO Outlook Survey. CHROs and their teams must be prepared to play a leading role in driving, shaping, and maintaining a culture that’s aligned with organizational business strategies.
This means coming up with a variety of strategies that shape cultural behaviors, like team-based awards, promotions, individual performance awards, and training, in a way that fits in with senior leadership’s vision. For example, the 2019 CEO Outlook study found that nearly 85 percent of CEOs report that they want a culture where failure in pursuit of innovation is embraced. But there’s no one “right” culture for every organization. For example, a culture of regulatory compliance might be appropriate for one company, whereas a culture of digital innovation might be more suitable for others.
Regardless of what the right culture for a company is, HR is responsible for shepherding, facilitating, and helping drive the culture change effort. HR should also make efforts to monitor and maintain the ideal culture.
3. Enhancing the employee experience will help with recruiting and retaining strategies. With record low unemployment rates in the United States and global competition for talent, the demand for workers, particularly those with specialized skills, exceeds supply. So, it’s not a surprise that enhancing the employee experience also ranks high on the list of HR priorities in the upcoming year.
Since workers have greater leverage than ever before, organizations need to be deliberate about the design of their employee experience if they want to attract and retain the most talented individuals. In addition to offering meaningful, rewarding work, HR needs to consider everything that touches an employee or a recruit, including their digital experience, social experience, and environmental experience.
HR should scrutinize the work a person does, the tools they’re provided with, and the environment they’re surrounded by as part of its employee experience strategy. In fact, “design thinking” is now ranked as a top skill required by the HR function. In addition, many HR teams have found that working with the customer experience team can be very useful, as they use the same basic approach and methodology for designing the customer experience.
Another critical component of shaping the employee experience is measuring it. The measuring process can employ formal survey tools, pulse surveys, focus groups and town halls, in-the-moment listening posts, and digital monitoring technologies. These all allow organizations to get a real-time feel for how the employee experience initiative is progressing.
4. HR needs to take data and analytics to the next level in order to gather key insights about the workforce. Leading HR functions are also focused on utilizing the power of data science to generate insights that benefit the organization and directly inform workforce and business decisions. That’s why nearly 40 percent of survey respondents list enhancing HR technology, including analytics and automation (via RPA), as their top two technology investment areas.
Data and analytics capabilities can allow HR to understand business needs in a more sophisticated way when it comes to accurately predicting potential challenges and coming up with creative solutions to deal with them. For example, HR is already using analytics to identify the root causes of turnover, differentiate behaviors of high versus low performers, and spot potential candidates for burnout and disengagement.
These efforts tend to be more successful when HR works closely with other functions in order to gather, integrate, and analyze data from a variety of sources in real time, including internally, from the broader organization, and from external data sources like email, chat, calendar, and social media. HR must also be open to hiring individuals like data scientists with skills that traditional HR candidates don’t possess. The survey ranks this as one of the top three roles that HR executives plan to invest in over the next two to three years.
HR teams worldwide are reassessing what they are doing, what they need to do, and how they can transform to deliver needed services and be an employer of choice. But it’s also clear that this can’t be done overnight.
A good way to start is by adopting a multi-year road map that integrates changes to service delivery, people capabilities, technology, process, and data to create a more worker-centric HR function. This will lead to a more holistic, whole system approach to shaping the workplace, improving company culture and embracing an increasingly digital workforce.
Mike DiClaudio is a principal for KPMG.