CEOs and CHROs Need To Bridge the Gap on Intelligent Automation

April 23, 2019

CEOs and CHROs Need To Bridge the Gap on Intelligent Automation

It’s no secret that HR has a difficult but important role in delivering the CEO’s business strategy when it comes to technology disruption. According to KPMG’s 2018 Global CEO Outlook Study, 86 percent of CEOs say they are actively disrupting their sector, and some companies are contemplating large-scale digital transformations. Embracing technology is not without its challenges, and as reported in KPMG’s survey The Future of HR 2019: In the Know or in the No, 42 percent of HR leaders say they believe the biggest challenge HR will face in the next five years is the integration of intelligent automation (IA) and machine learning. Less than 1 out of 10 feel “prepared” or “very prepared” for the changes. 

Combine this challenge with the constantly evolving workforce—workers are living longer; organizations are using more contingent and gig economy talent; and employee behavior continues to shift toward a consumer approach due to developing technologies—and HR executives are challenged on multiple fronts. Often the urgent present is driving out the actions essential to grasp the future. 

One of the biggest disruptions to the future of HR is the emergence of IA, which has already begun to impact organizations’ workforces, providing CHROs the opportunity today to help transform the business and its workforce. By applying current and emerging IA technologies, HR leaders can transcend the supportive role and become an active driver in their company’s overall business strategy. 

Enhancing HR’s Role in the Business
What prevents HR from embracing change and technology? Workplace culture is a top concern with 41 percent listing it a top barrier to transformation, as well as 35 percent citing a task-orientated job structure that does not foster innovation or experimentation. 

Marrying analytics, digital labor, and IA with the workforce will not be easy for HR, which often faces an uphill battle against corporate culture, unpopular scenarios, and digital limitations.

Also, CEOs and HR leaders disagree about how IA integration will shape their workforce. Sixty-two percent of CEOs believe IA will create more jobs, and a majority of HR leaders (60 percent) say they believe IA will eliminate more jobs than it will create. While there is an obvious dichotomy between the CEOs’ and HR leaders’ views, the challenge for HR is to deliver against the CEO agenda, not least in predicting and creating future workforce capability and a robust culture that embraces change and disruption as well as managing digital transformation within the HR function itself.  

KPMG thought leaders anticipate that largest impact for HR from IA will be at the task level rather than replacing entire jobs. Taking small measures to automate repetitive tasks can have large organizational impacts and free HR to take a more strategic role. Almost three out of four HR executives feel that IA/machine learning can drive significant value for their department, and of the HR executives who have invested in IA to date, almost all (88 percent) feel the investment has been worthwhile. 

The time to act is now for confident CHROs. Of the HR executives who believe their department plays a strategic role in the business, 67 percent are more likely to pursue options to foster the company’s digital transformation. Even if HR execs do not share the belief of strategic inclusion, less than half believe their department’s role will remain unchanged. Over the next two years, HR leaders are planning investments in areas such as enhanced process automation (53 percent) and IA (47 percent).

While transitioning may be difficult for some HR leaders, HR should look to embrace emerging technologies and look for tasks that can be improved or completed by automation. By optimizing their departments, HR can better position itself to transform the business workforce, unlock new value in the company, and contribute to the company’s digital transformation.  

The right HR strategy can derive value from innovation and deliver growth to the business during this era of disruption. 

The Authors: 

David de Wetter is a Managing Director in KPMG’s U.S Advisory People & Change practice.