Rethinking HR in a Changing World

Rethinking HR gin a Changing WorldWorld

January 2013January 2013

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We will cover three topics today

Overview & Approach01

Highlights & Insights02

Resources03 Resources03


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KPMG Overview

KPMG International is a global network of professional firms that provide audit, tax, and advisory services. � We offer the benefit of working with a “Big Four” international network

KPMG InternationalƔ Countries: 152Ɣ Professionals: 145,000+

of member firms, drawing from the skills and experiences of 145,000 colleagues in 152 countries

� KPMG’s member firms provide services to 79 percent of the Global 1200, managing large projects with global methods and standards

Ɣ Partners: 8,000Ɣ Revenue: $22.7 billion

ASPAC 5,000k

EMEA20,000k

Americas 7,000k

Global Advisory Professionals:

� Our worldwide presence enables us to leverage specific skill sets and industry knowledge for the benefit of our clients

KPMG LLP, the US member firm, proudly provides services to many of the world’s largest entities, including 75 companies in the FORTUNE 100

,,,

g , g p

Advisory

KPMG Services

Management ConsultingKPMG LLP (US)

100+ global methods and toolkits to bringthe firm’s vast knowledge to each client

Tax

Audit

x Enterprise Technology Solutionsx Technology Enablement Solutions*x Shared Services & Outsourcing*x Business Intelligence Solutions*x Change Management*

x Financial Managementx Human Resources*x Strategy & Operationsx CIO Advisory

KPMG, LLP (US)Ɣ Offices: 87Ɣ Professionals: 30,000+Ɣ Partners: 1,882Ɣ Revenue: $6 billion


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* Includes focused HR Professionals

x Change Management

Survey sponsored by KPMG’s Global HR Center of Excellence, which provides thought leadership and expertise globally

Ŷ Senior practitioners Ŷ Proven capability

Superior execution

Ŷ Broad business backgroundsŶ Deep HR domain expertise

Ŷ Supplement local resources Ŷ Sector focus and issues driven

Ŷ Globally focusedŶ Consistent delivery Ŷ Web presence

World-classHR

TransformationŶ Consistent delivery Ŷ Minimum 10 days’

training per year for all P&C practitioners

Ŷ Knowledge

pŶ BlogsŶ Specialty forumsŶ ConferencesŶ Advertisements

Transformation Services

management and knowledge sharing Ŷ Surveys

Ŷ White PapersŶ Conferences

Ŷ Outreach


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Ŷ Roundtables

Global delivery

Survey ApproachSurvey ApproachSurvey ApproachSurvey Approach

What will drive the value of the HR function in the future?

KPMG International commissioned the Economist Intelligence Unit to investigate: � The forces influencing the HR function� The forces influencing the HR function� How technology is shaping HR’s response� What HR might look like in 2023

In depth interviews with American Express, Shell, Whirlpool, and National Grid executives

Survey Approach:� 400+ executives in 45 countries� 55% respondents > 10,000 employees

Additional interviews with academic leaders Dave Ulrich and Mark Huselid

� All major industries and geographies

32%30%28%North America Europe

Asia Pacific

45 countries


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10%Latin America

Highlights and InsightsHighlights and InsightsHighlights and InsightsHighlights and Insights

Four key insights to consider for your organization

1Balancing a global, local, flexible, virtual workforce creates new challenges and opportunities

2 Attracting, retaining, and engaging top talent is crucial to business success

Selecting, managing, and developing talent locally, while creating a global-minded, mobile workforce across

lti l ti d hi

opportunitiesMaintaining sustained employee engagement in the face of increased career mobility, improved economic circumstances, and increasedmultiple generations and geographies circumstances, and increased competition

Embracing social media to access new sources of

3 Rapid changes in technology accelerates HR’s ability to transform

Delivering a unique differentiated people

4 Seizing the opportunity to transform HR into a strategic player

gtalent, increasing access to online learning and converting to cloud based technologies is driving increased efficiencies. Introducing advanced workforce analytics to provide business-critical information to measure ‘return on human capital’

Delivering a unique, differentiated people management strategy aligned to organization’s goals and focusing relentlessly on adding value to the business


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1. Balancing a global, local, flexible, virtual workforce creates new challenges and opportunities

Takeaways:� Working across borders is more common and

cross border reporting lines are becoming

Takeaways:� Working across borders is more common and

cross border reporting lines are becoming

US respondents agree that HR functions will become more globalized, centralized and uniform

50%

cross-border reporting lines are becoming more common

� Key talent is being transferred between cross-border operations and is being sourced f id h h k

cross-border reporting lines are becoming more common

� Key talent is being transferred between cross-border operations and is being sourced f id h h k

centralized and uniform

Believe their companies should increase the use 69%from outside the home market

� Virtual workspaces, flexible work arrangements, working remotely, hoteling, and contract workers are all increasing

from outside the home market� Virtual workspaces, flexible work

arrangements, working remotely, hoteling, and contract workers are all increasing

of both virtual and flexible workers

69%

gg

“There has been an idea for some time that you couldThere has been an idea for some time that you could standardize the HR function globally. Many markets today,

though, are so distinct that HR needs to focus on understanding local needs.”

Mike Westcott


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Mike Westcott, Global HR Director at National Grid

Leading practices and questions to consider

Some leading practices� Develop policies and programs that adapt to more flexible work Some leading practices� Develop policies and programs that adapt to more flexible work � Integrate global mobility into their talent management practices� Create an HR service delivery model that can be accessed

anywhere, anytimeP f l i i l diff

� Integrate global mobility into their talent management practices� Create an HR service delivery model that can be accessed

anywhere, anytimeP f l i i l diff� Prepare for multi-generational differences

Questions to consider

� Prepare for multi-generational differences

Questions to consider� How is your organization’s global presence evolving?� How is your HR team addressing these changes?� How do you adapt your policies and processes for virtual and

mobile employees?

� How is your organization’s global presence evolving?� How is your HR team addressing these changes?� How do you adapt your policies and processes for virtual and

mobile employees?mobile employees?� How does your organization prepare for successful international

assignments?

mobile employees?� How does your organization prepare for successful international

assignments?


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CPE Question #1

To what extent is your organization becoming more global in the next three years?

A Great extent

B Some extent

C Neutral

D Little extent

E Not at all


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2. Attracting, retaining, and engaging top talent is crucial to business success

Takeaways:� Talent management is one of the biggest Takeaways:� Talent management is one of the biggest

Believe HR’s #1 focus in the US for the next three years must be retaining crucial skills and

63%

topics of conversation and needs to be a top priority among business leaders

� Retaining key talent is top of mind (more so than attracting talent)

topics of conversation and needs to be a top priority among business leaders

� Retaining key talent is top of mind (more so than attracting talent)

crucial skills and experience within the business

US companies believe their company excels at 30%than attracting talent)

� Current demographic projections for the next decades point to employment shortages for most of the world’s markets

than attracting talent) � Current demographic projections for the next

decades point to employment shortages for most of the world’s markets

yretaining key talent today30%

“All companies have a strategy. Enacting it requires a set of strategic capabilitiesEnacting it requires a set of strategic capabilities

and you need to have top talent in the roles that support these capabilities.”

Mark Huselid, Professor of the School of Management and Labor Relations at


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Professor of the School of Management and Labor Relations at Rutgers University


Some leading practices� Develop contemporary employment brand and social mediaSome leading practices� Develop contemporary employment brand and social mediaDevelop contemporary employment brand and social media

recruitment strategy� Develop career paths that provide desirable developmental

opportunities

Develop contemporary employment brand and social media recruitment strategy� Develop career paths that provide desirable developmental

opportunities� Conduct engagement surveys and develop detailed action plans� Build programs that constantly “re-recruit” top talent

Q ti t id

� Conduct engagement surveys and develop detailed action plans� Build programs that constantly “re-recruit” top talent

Q ti t idQuestions to consider�How will the roles, skills and capabilities of your workforce need to

change over the next five years?�How does your company differentiate its talent management

Questions to consider�How will the roles, skills and capabilities of your workforce need to

change over the next five years?�How does your company differentiate its talent management�How does your company differentiate its talent management

strategies in different geographic markets?�Where are you seeing the greatest retention challenges, and how

are you addressing them?

�How does your company differentiate its talent management strategies in different geographic markets?�Where are you seeing the greatest retention challenges, and how

are you addressing them?


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CPE Question #2

Do you anticipate changes in your talent retention in the next year?

A Yes, across the board

B Yes, but selective areas

C About the same

D No, less of an issue this year


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3. Rapid changes in technology accelerates HR’s ability to transform

Takeaways:� As never before, technology is a primary

enabler in transforming HR

Takeaways:� As never before, technology is a primary

enabler in transforming HR

“When you arm a business partner of the future

with analytics, and they can share the facts with their teams

to help drive better decision� Increase of web-based, mobile HR and

performance management tools� HR analytics will foster even more profound

change

� Increase of web-based, mobile HR and performance management tools

� HR analytics will foster even more profound change

to help drive better decision-making, it allows you to be much

more strategic, much moreinsightful, and potentially, much

more laser-focused on where you should change� Cloud/SaaS offers potentially great benefits, but

most are still not aggressively utilizing

change� Cloud/SaaS offers potentially great benefits, but

most are still not aggressively utilizing

ybe spending your time.”

Kate Terrell, Vice President HR at Whirlpool

Web-based and mobile HR platforms

69%

Technology to capture performance reviews and other workplace reports

68%

Workforce data analytics used forbusiness intelligence

57%

Social media toreach alumni

54%

Social network sitesto recruit talent

65%

Delivering business apps via the “software as a service” and Cloud models49%


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54% 65% 49% Source: “Rethinking HR for a Changing World” 2012 KPMG International and the Economist Intelligence Unit Survey

Low satisfaction rate with HR IT systems and applications

KPMG’s 2012 HR IT Pulse Survey finds low satisfaction with the current performance of their HR IT systems and applications

How satisfied are your client organizations with the current performance of their HR IT systems and applications? (Please rank 1--5, 1=Not all satisfied, 5 Extremely satisfied)

Satisfaction with HRIT 2.82 average rating

0 00 1 00 2 00 3 00 4 00 5 000.00 1.00 2.00 3.00 4.00 5.00


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Source: 2012 KPMG LLP HR IT Pulse Survey

Cloud HR

While cloud, like social media (itself a cloud offering) offers potentially great benefits, most firms are still not aggressively utilizing it.

� Nearly one half of respondents’ client have not yet undertaken any HR cloud effortsNearly one half of respondents client have not yet undertaken any HR cloud efforts

� The rapid advance of cloud, the consumerization of IT, and the advance of “bring your own device” will only increase the role of IT to support business activities


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HR IT biggest problems, challenges and issues

Not surprising, at the top of the list is fragmentation across the organization and a disconnect across HR IT systemsand a disconnect across HR IT systems.

� This is a particularly acute issue when it comes to global talent management.

E bli HR l t d l ti i thEnabling HR related analytics is the third most frequently cited problem

Supporting social media efforts at the bottom of the list (from a limited focusbottom of the list (from a limited focus and use standpoint)


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Some leading practices� Create Social media strategy and opportunity planSome leading practices� Create Social media strategy and opportunity plan� Create Social media strategy and opportunity plan� Determine innovative people measures � Develop comprehensive HR technology roadmap� Calculate and benchmarking total cost of ownership

� Create Social media strategy and opportunity plan� Determine innovative people measures � Develop comprehensive HR technology roadmap� Calculate and benchmarking total cost of ownership� Calculate and benchmarking total cost of ownership

Questions to consider �Where are you investing in new HR related technology?

� Calculate and benchmarking total cost of ownership

Questions to consider �Where are you investing in new HR related technology?�Where are you investing in new HR related technology? �How does your technology roadmap support your organization’s

strategic priorities?�What types of measures do you use to anticipate people related

�Where are you investing in new HR related technology? �How does your technology roadmap support your organization’s

strategic priorities?�What types of measures do you use to anticipate people related yp y p p p

challenges?�How are you leveraging social media to engage your current

and future employees?

yp y p p pchallenges?�How are you leveraging social media to engage your current

and future employees?


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CPE Question #3

The most anticipated HR related technology investments in North America are data analytics and web/mobile platforms. Is your organization planning to make similar investments next year?investments next year?

A Yes

B No

C Unsure


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4. Seizing the opportunity to transform HR into a strategic player

Business leaders do NOT believe that HR excels at:� Providing insightful predictive

Business leaders do NOT believe that HR excels at:� Providing insightful predictive

Collaborating with senior management on people strategy35%

Respondents feel HR excels at:

workforce analytics (15%)� Measurably proving the value of

HR to the business (17%)� Ensuring succession planning is in place

workforce analytics (15%)� Measurably proving the value of

HR to the business (17%)� Ensuring succession planning is in place

strategy

M i t� Ensuring succession planning is in place (22%)

� Supporting an increasingly virtual and flexible workforce (24%)

� Ensuring succession planning is in place (22%)

� Supporting an increasingly virtual and flexible workforce (24%)

Managing costs39%

� Achieving operational excellence (26%)� Achieving operational excellence (26%)

“We are not personnel We have hired people from theWe are not personnel. We have hired people from the business like me to go into HR. We will have an opinion not

just about how to implement something in HR, but really about what it should look like, the strategic direction.”

Gabriella Giglio


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Gabriella Giglio, EVP HR at American Express

Executive management’s opinion of HR

Do not view HR as strategic or a business

82% of KPMG member firm HR consultants polled indicate that in many cases HR groups in their client 82% of KPMG member firm HR consultants polled indicate that in many cases HR groups in their client

strategic or a business impacting asset82%organizations are not viewed as strategic or a

business impacting asset.organizations are not viewed as strategic or a business impacting asset.


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Some leading practices� Understand how the organization makes moneySome leading practices� Understand how the organization makes money� Understand how the organization makes money� Design HR operating model to support company strategy� Stabilize HR service delivery… then broaden focus� Candidly assess HR talent support cross-functional moves

� Understand how the organization makes money� Design HR operating model to support company strategy� Stabilize HR service delivery… then broaden focus� Candidly assess HR talent support cross-functional moves� Candidly assess HR talent, support cross-functional moves

Questions to consider �How is HR perceived at your company? How do you know?

� Candidly assess HR talent, support cross-functional moves

Questions to consider �How is HR perceived at your company? How do you know?�How is HR perceived at your company? How do you know?�How do you measure and assess the value that HR drives in

your company?�What could HR do to be more impactful in your organization?

�How is HR perceived at your company? How do you know?�How do you measure and assess the value that HR drives in

your company?�What could HR do to be more impactful in your organization?p y g�How are HR goals and strategies linked to the company’s

business needs?

p y g�How are HR goals and strategies linked to the company’s

business needs?


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CPE Question #4

To what extent do you believe that HR operates strategically in your organization?

A Great extent

B Some extent

C Neutral

D Little extent

E Not at all


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There are some important variations in priorities among industries

The perception that collaborating across borders is increasing was reported by 71% of respondents

The perception that collaborating across borders is increasing was reported by 71% of respondents

Only 15% of respondents believe the HR function excels at providing insightful and predictive workforce analytics

Only 15% of respondents believe the HR function excels at providing insightful and predictive workforce analytics

It is significantly lower in the Biotechnology sector (45%) and Healthcare & Pharmaceuticals (59%)

Overall 24% of respondents indicatedOverall 24% of respondents indicated

� There was a greater degree of confidence in HR’s ability in Biotechnology (29%) and IT & Technology sectors (28%)

� The intention to invest in data analytics (31%) i ti l l id t i th E

This is much more prevalent in the Energy sector

Overall, 24% of respondents indicated that sensitive information has been leaked via social media

Overall, 24% of respondents indicated that sensitive information has been leaked via social media

(31%) is particularly evident in the Energy & Natural Resources sector (46%)

(42%) and less so in Healthcare and Pharmaceuticals (11%)

There was an overall lack of confidence inThere was an overall lack of confidence in

IT & Technology industry (43%) was more confident

There was an overall lack of confidence in the HR function to support a flexible and virtual workforce (24%)

There was an overall lack of confidence in the HR function to support a flexible and virtual workforce (24%)


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Consumer Goods (13%) much less confident

Highlights of regional differences

� Biggest appetite for further outsourcing� The “war for talent” is particularly evident

E l i t d i t l d

Asia PacificAsia Pacific

� Highest interest in virtual and flexible work arrangements

North AmericaNorth America

� Evolving towards newer more virtual and flexible ways of working

� There is overwhelming support for greater flexibility in the future

� Investment priorities: Data Analytic tools,

� Very strong growth in cross border working, but less acceptance of transferring talent from emerging markets into North America

� Investment priorities: Data Analytic tools, Web/Mobile platforms, Cloud/SaaS technologiesp y ,

followed by Cloud/SaaS technologies

EuropeEurope

Web/Mobile platforms, Cloud/SaaS technologies� Does not anticipate the HR function shrinking or

becoming extensively outsourced

L ti A iL ti A i� Evolving towards newer more virtual and flexible ways of working, primarily through videoconferencing and virtual workspaces

� Strong move towards more global working, but not for transferring talent from emerging

� Workforce planning and increasing productivity are more prominent than in other regions

� Managing an increasingly flexible workforce and

Latin America Latin America

not for transferring talent from emerging markets to home territories

� Investment priorities: Data Analytic tools, Web-based/Mobile HR platforms

� Cloud technologies are viewed less strongly

g g g yexpand into new markets are lower priorities

� Only region not forecasting growth in outsourcing

� Investment priorities: Web-based/Mobile platforms followed by Data Analytic tools


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than elsewhere, or potentially less awareness platforms, followed by Data Analytic tools

CPE Question #5

Of the four major insights presented today, which do you feel has the biggest impact on your organization?

A Changing workplace

B Crucial talent challenges

C Emerging technology

D Need to transform HR


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Resources for youResources for youResources for youResources for you

How KPMG can help you address these survey insights

Key Theme Balancing global, Balancing global, local, flexible, local, flexible, virtual workforcevirtual workforce

Balancing global, Balancing global, local, flexible, local, flexible, virtual workforcevirtual workforce

Transforming Transforming HR through HR through technology and technology and datadata

Transforming Transforming HR through HR through technology and technology and datadata

Attracting, retaining, and engaging top talent

Seizing the opportunity to transform HR into a strategic player

Approaches to consider

• Develop Workforce Planning approach

• Design policies and f

datadatadatadata

• Design and implement technology strategy business

talent

• Develop leading retention and engagement strategies

a strategic player

• Develop people strategy to drive business objectivesD l HR t tprocesses for

remote, virtual, and mobile employees

• Assess global compliance

strategy, business case, and roadmap

• Design predictive HR analytics approach

f

strategies• Harmonize global

mobility and talent management practices

• Develop HR target operating model

• Assess and design HR sourcing and service delivery

• Perform social media gap analysis

strategy

Thought Leadership available on kpmg.com

• Workforce Planning tool and methodology

• Social Media & HR whitepaper

• HR analytics white paper [coming soon]

• Talent Management methodology

• Talent Management & Global Mobility white paper

• Next Generation HR whitepaper and toolkit


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[coming soon]

HR Transformation Center of Excellence Home Page

[email protected]

� Executive summary and full report� Podcasts� Podcasts�White papers� Updated frequently

ith t twith new content

For more information, please contact P l tt l i @k K ki @k


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Paulette [email protected] or Karen [email protected]

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