Why HR functions must modernize

By Andreas Marathovouniotis

Fifty seven percent of human resources (HR) professionals believe that if the HR function does not modernize its approach to understanding and planning for the future needs of the workforce, it will rapidly become irrelevant within the modern organization, according to KPMG’s new Future of HR 2020 global survey of more than 1,300 HR executives in 55 countries.

“HR functions are facing a number of challenges due to disruption brought about by rapid technological advances and shifting consumer expectations,” said Mike DiClaudio, a principal with KPMG LLP. “Certain HR leaders show a pattern of addressing four discrete areas of priority – which the report called ‘Pathfinding HR’ capabilities – that mutually reinforce each other and are connected. To do this, these leaders are leveraging automation to incorporate data driven insights and tackle challenges such as building a meaningful employee experience.”


The survey identified four Pathfinding HR capabilities: 

1     Shaping the workforce of the future: Pathfinding HR organizations recognize that existing workforce structures are being disrupted by new technologies and business models. They are seizing opportunities to reshape the workforce and leverage the full benefits of humans and machines working together.

—   Three-quarters of Pathfinding HR organizations (76%) agree the HR function needs to actively challenge what the future workforce composition looks like (who to ‘buy’, build, borrow, bot) in order to meet the future needs of their organizations.

—   Seventy four percent say they are prioritizing the upskilling of the workforce to manage the impact of artificial intelligence (and related technologies) on the workforce.

2     Designing the employee experience: Employees today want meaningful, rewarding work, on-demand customer service, and instant access to information. To meet those expectations, employee experience is on everyone’s agenda, especially for Pathfinding HR organizations.

—   Ninety five percent of all respondents are prioritizing employee experience as a focus area; and Pathfinding HR organizations were three times more likely to ”strongly agree” that employee experience is a strategic priority for the entire organization (64% vs.19%).

—   Three-quarters of Pathfinding HR organizations (75%) also have a strategy in place to design employee experiences that mirror and support what employees receive outside the organization in terms of customer experience; and Pathfinders also rank design thinking as a top skill needed within the HR function.

3     Cracking the data code through workforce insight: Pathfinding HR organizations believe in the power of data science to generate actionable insights that create value for the whole organization - and are investing in technology and talent to enhance their capabilities.

—   Almost half (45%) of Pathfinders rank data modeler/scientist within their top three roles to invest in over the next two to three years; and Pathfinders are almost twice as likely to invest in this role compared to their peers (45% vs. 24%).

—   35% of Pathfinders are also planning to experiment with new technologies such as AI within two to three years (vs. 20% of their peers).

4     Shaping a purpose-led culture: Pathfinding HR organizations understand that HR plays a vital role in shaping and maintaining enterprise cultures that are aligned with business strategy.

—   They are six times more likely to “strongly agree” that they have a strategy in place to maintain the right culture for their organizations (43% vs. 7%).

—   They are five times more likely to “strongly agree” that they have dedicated roles in HR that focus on purpose and culture (40% vs. 8%).

“The path forward for HR calls for fundamentally new thinking about HR’s function and how it is structured to deliver the workforce of the future,” DiClaudio said. “The next generation of HR needs to create a holistic and universal system approach.”

To view additional information about the study please visit read.kpmg.us/FutureofHRSurvey. You can also follow the conversation @KPMG_US on Twitter using the hashtag #Future of HR.

About KPMG’s Future of HR survey:

The Future of HR 2020 survey covers 1,362 HR executives in 55 countries and 31 key industry sectors. The survey was conducted from June 27 - August 4, 2019.

To learn more about the findings of the Future of HR 2020 report or to arrange an interview with KPMG’s Mike DiClaudio, please contact Andreas Marathovouniotis

Andreas Marathovouniotis

Andreas Marathovouniotis

Associate Director, Corporate Communications, KPMG US

+1 201-307-7608

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Mike DiClaudio

Mike DiClaudio

Principal, Human Capital Advisory , KPMG US

+1 313-230-3120