Over the past year, the world has gone through the largest change management exercise ever, with COVID-19 thrusting human resources functions to the forefront of action on business productivity, workforce models, and culture mobilization. The challenge for the function going forward will be to ensure it continues shaping the future direction for enterprises, maintains a seat at the management table, and thinks big while “playing the long game”.
The majority of organizations will see the ‘shape’ of their workforces change 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. 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 fires from 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, we note. Lasting impacts, including the fact that nearly 40 percent of employees will continue to work remotely and perhaps others in a hybrid model, 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.
This pivot requires new mindsets, skills, and priorities.
A shift in HR priorities
There’s no doubt that the priorities for the HR function have shifted as a result of the COVID-19 pandemic. The many effects of the pandemic include the mass transition to remote working, which creates fresh challenges to organizations, such as:
Not surprisingly, employee productivity and well-being go hand-in-hand. That is why HR leaders agree that “taking steps to safeguard the experience and well-being of employees” is among the key priorities for the HR function. Reinforcing findings of the HR survey, the KPMG 2020 CEO Outlook and the 2020 Harvey Nash/KPMG CIO survey both ranked culture and employee experience among their top priorities.
Organizational leadership recognizes the need to keep people “connected, engaged and productive”. The seemingly overnight move to remote work has challenged leaders to rethink their traditional work models and permanently shifted the way they think about what it means to be connected, engaged, and productive.
With 39 percent of employees set to continue working remotely over the next two years, we expect a hybrid model of attendance. As a result, there has been unprecedented investment in digital technology to support remote employees and work and to ensure talent pipelines adapt to these new demands. Unsurprisingly, collaboration tools represent one of the biggest technology investments made as they are considered fundamental to increasing team visibility, maintaining productivity, and achieving business outcomes.
Lessons from the ‘Pathfinders’
Our research has identified an elite group of HR organizations, identified as ‘HR Pathfinders’, that account for roughly 10 percent of the survey sample. This group reports stronger performance across several areas that are critical to HR function. Pathfinders are more confident that their organization can attract talent as well as more likely to retain and develop the talent they need to meet growth objectives (96 percent versus 81 percent). Continuing that optimism, Pathfinders also say they are better at 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 their technical prowess, Pathfinders are more proficient than others in using data analytics to target and recruit the future workforce.
HR leaders would do well to heed the lessons from the Pathfinders. They often seek to own the entire employee experience for their organizations and are vital in establishing the right organizational culture. With culture and purpose becoming more important, HR leaders should be following this model.
Additional key findings:
Reskilling the workforce
About the survey
The HR Pulse 2020 survey covers 1,288 HR executives in 59 countries and territories (with the majority representing 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 executives (33 percent) surveyed are C-suite and 29 percent are HR executives such as senior vice presidents. Approximately 32 percent of companies surveyed report annual revenue of more than US$1 billion.
About the Author
Peter Outridge is a Partner in KPMG’s Hong Kong Advisory practice. He leads the People & Change Advisory team where he works with external clients to manage the people-related risks inherent in transformational change. He specializes in capability building through Change Management, Organisation Design, Talent Management, and HR Transformation, and is passionate about embracing the opportunities organizations face in the current digital era, and as they explore the opportunities emerging from the disruption created by COVID-19. Peter represents China on KPMG’s Global People & Change Leadership team, and is a member of KPMG China’s Inclusion & Diversity Council.
With KPMG since August 2005, Peter has worked across the Asia Pacific region and previously worked for a boutique consultancy and Accenture in Australia. He has extensive experience in both the design and implementation of organizational change programs, in a career spanning more than 25 years in the Banking & Financial Services, Asset Management, Energy, FMCG, and Government sectors.