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Future

of work
Shaping the workforce
of the future with AI

KPMG. Make the Difference.

Enter

December 2023

kpmg.com/futureofwork
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

The power, however, does not lie Our 2023 Future of work research delves
solely in the development of emerging into the minds of employees across the

Foreword technologies, but crucially, in how they


are regulated, integrated into society,
and guided by influential figures and
organizations. The responsibility for
globe and gauges how effectively they
feel their firm is preparing for the future of
work. It also explores what businesses still
need to do in advance of unleashing the
shaping the future — and our destiny combined power of machines and humans
— falls to those at the helm of today’s in their organization.
enterprises — big and small.
The current wave of
I hope this report supports your thinking
technological advancements As technology advances, the traditional about the future of work. There is much to
is a pivotal moment in workforce is at a critical juncture. learn as we bring humans and machines
human history. Business leaders can influence the course together like never before. It is important
of our collective future by choosing wisely that we share our learnings and support
when investing in and implementing the growth of human and artificial
Around the world, people are technology. Their thoughtful planning that intelligence, so it can deliver the good it
captivated by generative AI’s balances the synergies between artificial promises — not just for business success,
potential to heal diseases and unveil and human intelligence can define much but success of society and future for
the universe’s deepest mysteries. more than a company’s prosperity. It can generations to come.
also set the future trajectory for the role
of humans in the workforce, and how
Already AI is accelerating organizations enable the wider society
innovations in biotechnology, such to thrive.
as drought-resistant crops, that
could end world hunger. We could Leading organizations are rapidly
drastically see crime rates come positioning themselves to seize this
down, thanks to sophisticated DNA technological momentum. We believe
analysis that eliminates doubt from the first step will be to understand where
your people are today and where they
crime scenes. The world’s deepest
need to go next on their journey to the
problems could be ours to solve.
future of work. After all, an organization’s Ruth Svensson
success depends on its people being
Global Head of
ready, willing and able to support the People and HR
company’s evolution. Center of Excellence

KPMG International

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 2
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Introduction
AI and other advanced This report aims to do just this. Based
on a survey of 4,197 employees in
technologies are changing the
Australia, Canada, Germany, the UK
way employees work — what and the US, we offer a roadmap for
they do and how they do it. leaders with the four key markers
that can move you forward. For each
marker, we share employees’ views
Meanwhile, as leaders navigate the and outline specific actions to support
future, they are setting new visions your progress.
for their organizations. As they do,
they can adopt new approaches when The Future of work is intended to
embracing technology and shaping complement KPMG thought leadership
their workforce around it. They can in this space, including The Future
also rethink how they build skills and of HR: Flux to Flow and Rise of the
capabilities, while considering a new Humans. In these pages, we show that
way forward for middle managers. leaders should look to embrace the
power of AI, shape their workforce
to use it, and give employees skills-
The journey to the future of work is building opportunities on the job.
uncertain. To get started, business Upskilling middle managers may also
leaders should understand where their be crucial. With AI likely to touch every
role throughout an organization, their
employees are today to clear their
pivotal position may be indispensable
path forward.
as we navigate the changes ahead.

Here is your roadmap, and what you


can learn from today’s employees.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 3
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

01

Embrace the
power of AI
Emerging technologies — in Contributing toward these estimates,
leading organizations are rapidly
particular generative AI (genAI)
trying to identify which AI solutions
— are among the most powerful will help them deliver better service to
change agents currently shaping customers, transform their operations,
the world of work. and support their employees’ needs
and expectations. However, both
the scale of change involved and the
In the UK, genAI is set to boost GDP wealth of tools to choose from can be
by an estimated 1.2 percent over overwhelming to business leaders.
the next decade, injecting GBP 31
billion in a single economy.1 In the US, There is also confusion over genAI’s
genAI together with robotic process long-term impact, leaving organizations
automation (RPA) could overtake wondering how much of their resources
almost 30 percent of hours worked by should be redirected to harnessing its
employees by 2030.2 capabilities. Further, genAI can require
massive upskilling of employees
across the organization, as well as
sourcing of dedicated and experienced
professionals. The companies that
master this the quickest will likely have
a significant competitive advantage.

Generative AI and the UK labour market (kpmg.com)


1

https ://  ww w. mck insey .com/mgi/our-research/generative-ai-and-the-future-of-work-in-america


2

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 4
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

AI goes generative What do employees think? Yet, alongside this optimism,


our research highlights concerns
Our survey suggests that workers about feeling overloaded by new
lack awareness of, and confidence technology, and unequipped to
Unlocking the power of innovation in, their organizations’ technology fully benefit from it. The always-
strategies. Despite the race to on nature of modern working
Traditional AI and generative AI GenAI is a form of AI that
embrace AI, little more than half environments has a predictably
(genAI) differ in their functions generates original content,
of respondents (54 percent) said negative effect on employee well-
and capabilities. such as images, text, video
their employer has adopted new being and mental health.
and music, by drawing from
technologies over the past 3 years.
its vast foundation of data.
Traditional AI uses algorithms to
Such capabilities transcends 38% Almost two in five
analyze data, identify patterns
the limitations of specific task- On the plus side, almost two-thirds workers feel that productivity
and make predictions based
oriented AI systems, and can (64 percent) are happy with the improvements are outweighed
on that data. It applies these
spur innovation across roles and productivity tools and systems at by the effect on their well-
patterns to perform specific
industries. their disposal. Perhaps as a result, being and mental health.
tasks, making it an excellent
60 percent describe the impact
solution for repetitive tasks and
of technology on their jobs as 19% A fifth believe
numerical processing. No longer reserved to handle
“largely positive.” technology has impaired
routine operations, genAI has
their productivity,
the potential to be a driving force
For example, recruitment
for creative and novel solutions. Looking forward, 66 percent of
teams can use AI algorithms 31% Almost a third believe
However, to unlock the potential employees expect technology to
to screen resumes, identify that it has damaged their
value of genAI, organizations enhance their productivity over
gaps in candidates’ skills work-life balance.
should truly understand the the next 3 years. More than a third
and experiences, and match
roles and tasks that it can (37 percent) say new technology
candidates with specific job Job insecurity looms large in
augment, and the capacity and will automate as much as 30
requirements. They can also employees’ responses to
productivity gains at stake. percent of their job whereas a
scan social media for more technology-driven change. Almost
quarter (24%) think it could
information about candidates, in a third of employees (31 percent)
automate up to half of their job.
particular their behavior outside believe that new technologies, like
of work. This significantly AI, will render their jobs obsolete.
reduces selection time, allowing
HR professionals to focus on the
better qualified individuals.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 5
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Part of this anxiety comes from What does embracing AI


firms still not being completely mean for organizations? Organizations must remember that
clear on how new technologies will
change their workforces, says Ruth Employee enthusiasm for human beings are still at the core of
technology’s productivity
Svensson, Global Head of People
and HR Center of Excellence, benefits resonates with David the digital world of work.
KPMG International: Doyle, founder and CEO of AI-
powered market intelligence
Organizations must remember that Organizations should also take
platform, Forestreet. Doyle
“Many firms are learning as they human beings are still at the core care not to overload people with
believes that genAI will radically
go, due to the rapid evolution of the digital world of work. more and more technology.
shift the productivity dial, as it
of technology. This uncertainty Instead of making us more
works in a totally different way
requires more communication, innovative and productive, the
to previous technologies from a When tools are designed without
not less. If companies don’t work sheer volume of tools can have the
user’s perspective. users in mind, they no longer
quickly to close the communication opposite effect.
void seen in our survey, serve their intended outcomes.
employees’ anxiety and threat “Until now, solutions have Jennifer Howard-Grenville, Diageo
Professor in Organization Studies Microsoft found that two in three
response may only escalate.” required us to bend to their
at The University of Cambridge people struggle to find the time
processes. Users had to follow a
Judge Business School, explains: and energy to do their jobs due to
sequence of steps and commands
this ‘digital debt.’ The same people
31% believe that new to get to a desired outcome,” he
are also much more likely to find
says. “But, tools like ChatGPT
technologies, like bend to our needs. Do you need
“Technology can constrain work
innovation and strategic thinking a
if it is designed to facilitate
AI, will render their to research a sector for a meeting, ideal work practices, rather than
challenge. The root of the problem
is what Microsoft calls a lack
jobs obsolete. summarize a call, create a new actual ones. Smart technologies
of “uninterrupted focus time,”
policy or write an email? Just ask may make a lot of sense in
since much of the day is spent
genAI to do it for you, and it’s 70 the development lab, but their
“This is a real problem. When communicating (e.g., email, chat,
percent done. From a productivity use cases will be different in
employee threat responses are virtual meetings).3
standpoint, that’s transformative.” every setting. Their adoption is
high, they focus on protective
behaviors and move away from influenced by the people who
essential growth behaviors like That said, the productivity gains use them, their expertise, the
openness to new experiences, from new technologies will likely processes and practices they
innovation and collaboration. Yet depend on exactly how businesses apply — as well as what has gone
these are exactly the behaviors deploy them. on before.”
organizations encourage to thrive
in the new world of work.”
3
Microsoft, 2023 Work Trend Index: Annual Report, “Will AI Fix Work?”, pp.5-7. Used with permission from Microsoft.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 6
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

How can organizations 1. Experiment to make the most of AI


harness AI?
Let your people, at all levels, be your Engage your HR and IT functions.
If the opportunity to unlock value primary source of ideas. Both groups will be key to monitoring
and drive profitability through Define clear objectives at the ideation and planning for the outcomes of your AI
AI is enormous, so too, are the stage, without setting too many experimentation.
challenges. constraints that can prevent innovation.
Be mindful of, and mitigate,
How do businesses go about Test ideas and develop them through to potential harms.
designing and deploying solutions business cases. Carefully consider what the tools can or
around workers’ needs? How can Run pilots to determine what tools cannot do; the opportunities and risks
they create productivity gains may work and which may not. Now is for the business and its people; the risk
without jeopardizing employee not the time to select novel or popular of information bias and ‘hallucination’
well-being? How can they use AI to tools; instead pilot the technologies (where genAI ‘makes up’ answers); and
design the organization and build everyone can benefit from using. This what this could all mean for the business,
the workforce of the future? can help build excitement, enthusiasm its ethics and compliance obligations, and
and participation. its stakeholders.
Here are some of the steps leaders
will likely need to take to harness Implement robust monitoring and
the power of AI. evaluation processes from the outset.
Establish a Digital Labor Center of
Excellence to help govern, scale and
improve connectivity between teams and
functions during the ideation phase, and
harness the best innovations.

2. Get into the detail of your processes and activities across the business

Take time to understand the day-to-day Explore how genAI can benefit different
workings of your organization. steps of a process.
If you are to understand how to grasp AI and genAI can vastly improve many
the potential of AI, it’s imperative to aspects of your activities — and the
understand the processes running behind speed at which they are completed.
the business.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 7
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

3. Equip your workforce to use new tools


effectively

Do not underestimate the employee Invest in training, not only on outcomes.


Strategic intent
change journey.
AI can introduce ample and continuous
GenAI and other tools will require new
skillsets and ways of working that will take for AI skills
change for employees and teams, which
requires strong leadership throughout
time to build. Recognize and reinforce
constructive behaviors while employees not always
following through
the process. use and apply their new skills. This is as
much a behavior change exercise as it is a
Take a thoughtful approach and prioritize technology implementation.
employee well-being.
Skills analytics company, Simply
Carefully considering the humanness of Foster interest in the success of working
Get Results, examined global
your employees will allow them to bring with AI solutions.
demand for AI skills over the past
their best to work, while also reducing Promote AI tools through the lens of what 3 years. The firm found that 1.2
sick days, and avoiding ever-increasing is most important to employees to gain percent of job postings required
litigation in this area. their trust and enthusiasm. these skills, a slight increase on
0.9 percent in 2020.4 This suggests
Get your employees excited about the that organizations are not rapidly
opportunities AI offers. increasing their technological
Give your employee communication capability in line with their
campaigns the same level of thought and strategic intent.
consideration as you would to customer
marketing campaigns.

4. Prepare for your ongoing AI evolution

Hire data scientists and domain Build data sources that support the
experts. use of AI.

Bringing in such expertise can help Information must be available in


navigate the development and the right structure and format for AI
deployment of AI solutions. engines to use, and with the right
security protections.

4
Simply Get Results analyzed hundreds of millions of job posts and talent profiles, using data from Lightcast, to provide the statistics shared in this report.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 8
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

GenAI experimentation
GenAI may usher in a whole new The Center’s remit would be to
approach to change management. KPMG firms, for example, are collaborating with develop new business and service
The conventional approach to Microsoft to drive genAI innovation internally. delivery models — powered by
business transformation is to genAI — and discover which work
define a target end-state, then and which do not. From there, the
design the roadmap to get there. business can select the ones to
With genAI, however, there may adopt.
no longer be a final destination
as AI may be in an ever-evolving
The Center should also be
current state.
responsible for supporting
employees in a fluid environment,
As such, continuous and capture learnings from genAI
experimentation with AI will experimentation to rigorously
be crucial at all levels of the evaluate pilots and projects from a
organization. This experimentation data-centric perspective.
should be unstructured, but
collaborative and supported, so
KPMG firms, for example, are
employees do not feel unsettled by
collaborating with Microsoft to
ongoing uncertainty.
drive genAI innovation internally.
In 2023, firms launched an
To encourage experimentation, a extended genAI collaboration for
Digital Labor Center of Excellence clients, industries and society
can be established. This acts as more broadly. Select groups
your digital nerve center and are piloting tools like Microsoft
core governance body for genAI Cloud, Azure OpenAI Service
experimentation. and 365 Copilot, to enhance their
capabilities, and power their
creativity and analysis with AI.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 9
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

02

Shape the
workforce of
the future
New technology is We know that leaders want people in
the office — 64 percent of CEOs expect
fundamentally — and rapidly —
a full return to the pre-pandemic in-
changing the skills profiles that office working pattern, according to
organizations need for success. The KPMG 2023 CEO Outlook Survey.5
Advances in AI also means that They believe it’s better for innovation,
team effectiveness and overall
the workforce of the future will
productivity. Workers, by contrast,
likely feature AI-augmented want to preserve the flexibility they
humans, carrying out tasks in enjoyed during the pandemic.
new and different ways.
There is a growing lack of confidence
among business leaders that they have
At the same time, leaders should the right capability in house to deliver
address the ongoing tension over on their business strategy. The CEO
working patterns. Outlook revealed that talent is among
the top 10 risks to growth for CEOs over
the next 3 years.

5
KPMG 2023 CEO Outlook

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

To be competitive, traditional It seems unlikely that such a small


approaches to workforce planning When it comes to hybrid working, organizations proportion of jobs offer flexible
may no longer suffice, given the are also struggling to put clear boundaries in working. “Employers could be
need for faster and more dynamic missing a trick,” says Simon
decision-making. Organizations place for employees, and to explain the reasons Haines, founder and CEO of Simply
need to think about ‘workforce behind them. Get Results:
shaping’ — that is, iteratively
framing the shape, size and
Workforce shaping will likely When it comes to hybrid working, “The ability to work remotely, at
composition of the workforce to
emerge as a new business organizations are also struggling least some of the time, has now
meet the needs of today while
‘muscle,’ equipping leaders with to put clear boundaries in place become a leading factor in whether
projecting a few years ahead to
the data and insight to make the for employees, and to explain the people choose to join or stay with
plan for what is next.
right choices. reasons behind them. a company. Recruiters need to be
absolutely explicit that flexible
Predictive intelligence and Our survey found that 50 percent
working options are part of the
What do employees think? employment package.”
advanced analytics can help of staff are fully office-based, but
organizations consider: Workforce shaping is rising to the only 30 percent want to be. In that
top of the agenda for business context, analysis by Simply Get Such results point out that firms
macro changes that will leaders, but it is not always filtering Results suggests that less than are not executing their workforce
have the most impact on down to their teams. 10 percent of job ads tap into this shaping strategies around
workforce requirements preference. Only 6.7 percent of employee needs and wants.
More than a third (36 percent) of postings describe roles as ‘fully
optimal mix of employees, gig remote’, while a mere 2 percent
employees say their organization
workers and automation advertise hybrid roles.
does not know how its workforce
skills and capabilities that will be must change to meet future
critical to success business and customer needs.
A common reason for this is a 50% of staff are fully
incentives to motivate the lack of the necessary data and office-based, but only
technology. Indeed, 60 percent of
workforce to acquire needed
staff say their company is not using
30% want to be.
capabilities
emerging technologies to match
location where work can get done skills to job opportunities.
optimally

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 11
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

What does workforce John Doel, Go-to-market Service Doel points out that these roles A focus on becoming more skills-
shaping mean for Integration and Innovation Leader, are crucial to value creation in led across your people processes,
KPMG in the US says: a whole range of sectors: legal, and building a skills data
organizations?
professional and financial services; infrastructure, can be essential in
Technology, automation and web and product design; coding this regard.
“The assumption is that process-
hybrid working models are forcing and application development;
heavy, commoditized jobs are
us to think differently about advertising; customer service;
most at risk. Approximately 90 This upheaval in workforce
what the workforce needs to do health diagnostics; scientific
percent of these roles have already shaping makes internal talent
and when. research, and more.
been streamlined by robotic marketplaces — and their
process automation (RPA). There’s supporting technology —
Up until now, we’ve relied on an not much firms can do to automate essential. That’s because they
annual workforce planning model the rest without major upgrades to “New business and enable organizations to better
that matches people to jobs. This their enterprise platforms.” operating models match the demand for skills to
should give way to a more agile, will emerge in these the supply of them at scale. This
ongoing process of matching skills reduces the hiring requirement,
Instead, Doel sees genAI as spaces, with more tasks provides new development
to tasks. disrupting higher-value, less
delivered as an AI- and growth opportunities for
structured tasks: knowledge,
To understand the potential impact creative and technical work. enabled service.“That is employees, and has been shown
to increase overall productivity.
of an AI-augmented, partially what will likely be at the
hybrid workforce, you need great Research from Forrester affirms heart of this next wave
data and analytics capabilities this point of view, finding the of AI. Businesses should
to inform your workforce influence genAI has on jobs
shaping decisions. work out how to adopt
rises with education levels.
For example, just 2.7 percent these new models, and
Without it, firms may only of jobs needing a high-school how to use genAI to
hope to know which skills and diploma will be impacted, transform knowledge
activities can be enhanced by against up to 21 percent of those
requiring a degree.6 work. Those that do
which solutions. The job is
made even more difficult, given not, may fall behind
that conventional wisdom may the competition.”
be misplaced.
John Doel

6
Forrester, 2023 Generative AI Jobs Impact Forecast, US. J.P. Gownder and Michael O’Grady. Used with permission from Forrester.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Yet, most organizations have not


adopted emerging technologies “When it comes to
to successfully match skills to how and where we
job opportunities, losing out on
potential employee productivity
work, the pandemic
gains. Without the right showed us that
technology, firms may also lose
there’s another
out on vital visibility of the skills
they currently have, and how to way of doing
effectively match them to their things. People’s
strategic needs.
needs changed Hybrid working is inherently There are complications,
Workforce shaping is complex. and organizations inclusive. For different reasons, however. There are the obvious
There is a lot to account for: met them.” certain employee groups will infrastructure requirements.
external forces, new technologies, be more comfortable in a Plus, where people work, for how
Jennifer Howard-Grenville hybrid environment. long and the type of work they
employees’ needs and
expectations, and more. When do remotely can affect a firm’s
done well, however, it can offer They worked around the different tax and compliance obligations.
Facilitating that may only
leaders a competitive business accommodations that employees Organizations must therefore
strengthen their performance,
advantage. The employee factor had to make. We’ve opened that define policies and practices for
productivity and contribution to
is especially difficult to get right, box, and we can’t just close flexible working and set guardrails
profitability — and make them
and at the same time, is vital to it again.” to facilitate compliance.
more likely to stay.
successfully execute the strategy.
Flexible working comes with many The right balance may be different
Of course, in shaping where
The hybrid workplace is a good benefits. It can save on overhead for every organization. What
work is done, firms must
example of the need to strike costs and can draw from a wider matters is being clear about how
square empathy for employees’
a balance between employee talent pool. Plus, it strengthens employees work and aligning
preferences with business needs.
needs and wants, and those of engagement among employees decisions to current goals and
That means setting guidelines and
the business. who prefer such arrangements. those set for the future — all
empowering middle managers
of which needs to be clearly
to listen to employees’ feedback,
communicated to employees
When it comes to diversity and while experimenting with
and middle managers to
inclusion, activities such as innovative working patterns. Using
avoid confusion.
automation and outsourcing can the insights gained, leaders can
have a disproportionate impact then design an evidence-based,
on certain working groups. inclusive workplace.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

What do employees value?


Expectations for employee When asked about the most important aspects of Purpose, belonging, and well-
value propositions (EVPs) are their EVP, respondents highlighted being are also key factors of a
ever increasing. The ‘Great compelling EVP, which Qualtrics
Reconsideration’ has encouraged 50% found to be the most important
many employees to re-evaluate
47% drivers of employee engagement
priorities, goals, and ways of 34% 33% and well-being.7
working and living. People are also
reconsidering their relationship
Culture Values and Fair pay Flexible To deliver such an evolved EVP, it
with work, family, community purpose working should be shaped and governed
and the environment. They’re
in line with the functional owners’
questioning traditional notions Those who do not adapt may struggle to attract and retain
vision, while corporate HR sets the
of success, and seeking more talented individuals, while giving others good reasons to stay
overarching framework for reward,
meaning, purpose, and fulfillment with the organization.
learning, career development
in their lives and in their jobs.
Employees surveyed for this report identified and more.
the following as top reasons for wanting to leave
In response, employees should their employer: However, it can be difficult to instill in
evolve their value proposition to
organizations with large populations
meet employees where they are,
while equipping and supporting
35% 33% 32% 32% of employees, whose everyday work
may not feel directly connected to
middle managers and front-line
the company’s value chain.
leaders to engage and inspire
poor work-life non-competitive inflexible lack of career
their teams. balance pay working hours advancement
This makes the role of local leaders
In this context, the EVP is moving away from the critical. It is their job to inspire
More than half (61 percent) of
influence and control of HR, and toward employee their teams, provide recognition
CHROs said they need to update
expectations that center around the ease and and a sense of value, and find
their EVP in response to the external
enjoyment of their day-to-day working. This includes innovative ways to connect people
labor market, according to the KPMG
how meaningful their work feels, and how simple and with the company’s wider mission
The Future of HR: From Flux to Flow.
frictionless it is to get things done. and impact.

7
htt ps:// ww w. qual trics .com/ experience-management/employee/drivers-of-employee-engagement/

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

This involves addressing the

EVP in the era of AI following key aspects:

The rise of genAI and the They will likely expect to work This mindset, which is Redesigning work.
need for continuous digital for firms with modern ways of particularly prevalent in the In an AI-first world, workforce
transformation provide a wealth working and will want to work fintech sector, can be hard for shaping requires an AI-first
of opportunities to enhance the for companies that harness larger organizations to unleash mindset, one that is focused on
EVP. Advanced technologies can artificial and human intelligence — and govern — in highly capturing and using meaningful
remove mundane and repetitive to spur productivity, growth and productive ways, especially as data to redesign roles entirely.
tasks for employees, improve innovation — not just to reduce they may lack the transparency
access to information, inspire costs. These elements of the typically found in start-ups. Deciding on workforce location.
creativity and save people time EVP will take on just as much With a growing emphasis on
(which can improve their work- importance as the company’s employee flexibility, deciding
life balance). rewards package. where to base the workforce
How do organizations involves a nuanced blend of
Employees realize this. This A longer-term focus on shape their workforce? physical and digital environments,
survey found 64 percent of productivity, value and growth considering factors like cost, talent
How can firms reshape their and business needs.
respondents have seen their is not only a compelling offer for
workforces for the future, and
workload increase, while employees. It can also build a
build the optimal combination of Optimizing the workforce mix.
according to the Microsoft more successful business in the
people and technology?
Work Trend Index, 70 percent long run as organizations see a Rather than exclusively ‘buying’
are open to delegating as much multiplier effect from combining new skills, organizations should
as possible to AI to lessen effective human and artificial The answer lies in an agile, weigh the costs and benefits of
their workloads.8 Intelligence, which remains out scenario-driven approach hiring new employees against
of reach when the two work in to workforce shaping. This upskilling existing ones. The
isolation. demands a shift away from shift to skills-based organizations
Talented individuals will likely
the neat strategic workforce allows for a more tailored
demand employers equip them
planning segments where the approach, leveraging both internal
with the technology to improve Interestingly, smaller start-ups
‘five Bs’ rule: Buy, build, borrow, and external talent through
their effectiveness on the job. recognize the opportunity to use
bot and base (see more 16). talent marketplaces.
AI and supportive technologies
Organizations should recognize
to boost overall productivity,
the need to embrace flexibility in
rather than reduce headcount.
workforce management.

8
Microsoft, 2023 Work Trend Index: Annual Report, “Will AI Fix Work?”, pp.11. Used with permission from Microsoft.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Organizations will likely have the ability


to match internal and external talent to
Case study:
Delivering the workforce of the future
opportunities. More than ever, the focus can be
on the right skill for the task at hand. A multinational insurance company recognized the importance
of anticipating future disruptions beyond a five-year horizon. The
firm needed to identify and visualize potential future scenarios for
Access to deeper insights
The five Bs its operating model, workforce composition and practices, and
about their people can enable
partner ecosystem.
organizations to blend traditional Buy:
‘build’ and ‘borrow’ levers. This Recruit the right skills at the right
democratizes opportunity through levels throughout the organization, Using our workforce-shaping capabilities, KPMG worked with various
talent marketplaces and gives creating entirely new jobs where stakeholders and subject matter experts to:
organizations the ability to match required.
• Define the disruptive trends affecting the business. We then
internal and external talent to aligned its employees’ skills and the technologies they use to its
Build:
opportunities. More than ever, the changing requirements.
Redesign roles to suit new digital ways
focus can be on the right skill for
of working, and upskill and reskill • Develop a series of workforce-shaping scenarios, and assess the
the task at hand. people to perform them. firm’s end-to-end processes against them. We then examined the
implications of each scenario for the workforce, and its overall
In a world where there’s no longer Borrow: impact on the business.
an end-state operating model, Transfer people internally for specific
• Map functions and job families to the value chain. For each section
purposes, while outsourcing certain
putting these considerations at the of the value chain, we defined a series of rules that show the
tasks to third parties.
top of the C-suite agenda will likely percentage impact on the workforce, and whether capabilities will
be essential to delivering your need to be added, trained or relocated.
Bot:
desired outcomes. Companies Automate or augment day-to-day tasks
must continuously adjust the to enhance how they are carried out.
shape of their workforces, as new This helped the organization to establish and embed new
technologies emerge, business capabilities, such as intelligent automation and strategic workforce
Base:
needs change, and employee intelligence. The result was a future-ready people strategy, and a
Locate people optimally in terms of
demands evolve. geography as well as working patterns
more compelling employee value proposition.
(e.g., on-premise, remote or hybrid).

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Case study:
Transforming skills with generative AI
A global pharma company It then gives employees personalized career guidance
needed to make sure its skills and generates tailored job descriptions. These steer
landscape remained fit for an era people toward the roles and skillsets needed to meet
of dynamic change — from post- the organization’s operational requirements and
pandemic hybrid work models to strategic goals.
technological breakthroughs. Its
aim was to nurture a culture of
Career Advisor has driven many potential benefits for
continuous upskilling, which would
the business, including:
proactively address skills gaps.

empowered staff ready to develop the skills


needed to meet changing business requirements;
Using ChatGPT,
KPMG developed tailored job descriptions to align recruitment with
an innovative, the organization’s strategic goals;

generative AI- data-driven career advice that helps minimize the


powered tool, called risk of skill gaps opening up;

Career Advisor, for personalized career guidance that can improve


the company. employee satisfaction and engagement;

automated career advice and job descriptions that


This intelligent chatbot ingests
help reduce HR’s workload, allowing for greater
job data, including insight on skill
focus on more strategic tasks; and
gaps, oversaturated positions and
in-demand skills.
in-depth job data to inform workforce planning
and talent management decisions.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

03

Learn in the
flow of work
Learning in the flow of work Failing to respond can put
organizations at risk of seeing their
remains an abstract concept
workforces overtaken by progress.
for many organizations. The Mark Williamson, Partner, Head of
idea recognizes that effective People Consulting, KPMG in the
learning needs to happen on UK explains:
the job. Instead of introducing
separate training sessions, “It’s a shift that is happening not just in
small pockets, but across economies,
employees learn the specific across industries and across the world.
skills or knowledge at the time Reskilling, upskilling and continuous
they need to do their jobs. learning will be crucial to firms’ ability
to compete and grow. The need to
reskill — at scale — is massive.”
The pace and dynamism of change
affecting organizations, on top of The solution lies in delivering learning
technological advancements has in the flow of work. Powered by AI
only intensified the importance of and other advanced technologies,
evolved upskilling opportunities. organizations can now seamlessly
Learning should align with advancing integrate learning into the workday,
technologies, and be more responsive alongside more traditional,
to learning needs. structured methods.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

However, a new challenge has What do employees think? It is easy to jump to the conclusion
emerged: continuously evolving that AI will remove humans from 62% say that
Employees are optimistic that
technologies are outpacing
their current ‘human’ skills will be
work processes. In our view, investment in
employers’ ability to apply them however, the future may see less
in the workplace, let alone reskill suitable for future roles, despite job replacement, and more role upskilling influences
and upskill their people to make the speed at which at which augmentation. As already seen, whether they join,
the most of them. To keep up, technology is changing. Almost new technologies like generative
organizations should rethink their fourth fifths (78 percent) of our AI present significant opportunities
leave, or stay with
approach to knowledge transfer survey respondents believe this. for efficiency, consistency and an organization.
at scale. acceleration of work, particularly
At the same time, they recognize in knowledge roles.
What does learning
To assess if learning is currently that they cannot stand still. Some
in the flow mean for
happening in the flow of work, ask: 72 percent agree that continuous Yet, respondent to the survey
learning and upskilling will be organizations?
• How long does it take employees suggests that new skillsets may be
crucial for them to stay relevant in needed for workers to use these
to get an answer? A significant minority of workers
their field. This is reflected in their technologies to their full potential.
• How long does it take employees — just under half — say their
expectations of their employers: Around three fifths (61 percent)
to successfully complete organization is not proactively
62 percent say that investment of employees say the quality of
that task? upskilling them for the future
in upskilling influences whether reskilling and upskilling in their of work. This might signal that
• How long does it take employees they join, leave or stay with organization has improved over companies are not investing
to learn and apply a new skill? an organization. the last three years. A similar in upskilling or identifying the
number (59%) have access to emerging skills needed for the
The less time it takes, the more training for alternative careers. future. Equally, it could suggest
productive your people are — and 72% agree that a problem with how they are
the quicker they can adjust to new continuous learning Overall, employees’ responses communicating and engaging
with their staff.
requirements in their roles. and upskilling will paint a positive picture of
companies recognizing and
be crucial for them responding to employee learning
to stay relevant in needs, but there is still much
work to do. Little more than half
their field. (56 percent) of respondents say
their organization is proactively
investing in reskilling and
upskilling to bridge skill gaps.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

AI has the potential to Already there has been a shift from A note of caution, however. We
Strategic technology partners
fundamentally change what, courses to resources. However, this must keep in mind that genAI
when and how people work. For next wave of learning, powered is an enabler, not a panacea. Learning can no longer operate
example, many organizations by AI, can take learning to the Maximizing employees’ in a silo. Partnering with
now use digital assistants to next level. It puts personalized, performance and making technology can help achieve
automate certain tasks and task-specific knowledge into every learning in the flow of work learning in the flow of work
workflows. As some skills go out employee’s hands, right at the point a reality, will likely require a while reflecting the company’s
of date, new skills become more of need number of components to work wider technology strategy.
prized, including: in harmony. Look to maximize existing
investments and partnerships,
The potential benefits and intelligently target skill
digital literacy to navigate Your skills landscape gaps with vendors who can help
of AI-powered learning
the abundance of material achieve upskilling ambitions.
Fully personalized learner Build a fluid and predictive
available; representation of the skills
journeys at the point of Content and knowledge
need needed in the business. There
feeding the right prompts management
are AI tools that recognize
into AI tools to extract the Supercharged time to Content creation and curation
and understand the roles and
right knowledge; competence can be dramatically accelerated
opportunities in an organization,
Targeted and engaging and the skills needed to by AI — with a greater focus on
quality assurance learning content perform them. These can quality, relevance and alignment
to verify the content Cross-border then be matched to across with your desired learning and
produced by AI solutions; communication the workforce. business outcomes.
and
In addition to what the Consider early adoption of
curiosity and the desire to organization needs from tools that can help do this. Be
continuously learn. the workforce, employers sure to have the necessary
need to consider individual data and human checkpoints
development needs, which are to maintain quality and drive
shaped by personal learning the right outcomes from
Recent breakthroughs in genAI, preferences and career learning. The aim should be
along with its easy availability, ambitions. Aligning the two will to understand what is having
enable organizations to integrate greatly strengthen employee the most and least impact
learning into the flow of work retention. on tangible productivity and
in ways that are effective and competence metrics.
commercially viable.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

The end-to-end experience How do organizations Complete a high impact


For learning to happen in the flow AI can overlay a number of deliver learning in pilot.
of work, it must be available in technologies, while providing a the flow?
multiple locations, over multiple singular interaction mechanism 1. Identify a pilot that can make
channels, all at the same time. — providing a one-stop shop Right now, the opportunity an impact
Integrating AI into the end-to- that significantly enhancing the to step up your people’s Choose a project that people
end learning experience can help user experience. capability with learning in care about — and that can easily
remove barriers to content and the flow of work is huge demonstrate the value of learning
knowledge-sharing, and provide — and the biggest risk is in the flow of work.
Traditional training will co-exist
a dynamic, personalized view of doing nothing.
with AI-powered digital assistants
learning for every employee.
that deliver learning at the point Employee onboarding, for
of need. The experience of these Start with small, thoughtful, example, can impact speed to
“Learning experiences must be more traditional interventions incremental changes. Run competence, productivity and staff
contemporary, immersive and — whether in virtual or physical a pilot project and build the attrition. It also produces tangible
inspiring,” says Meaghan D’Arcy, classrooms — is just as essential foundations. value in the flow of work, and
Partner, KPMG Australia. important as those offered by any improvements can be easily
AI. Every interaction matters, compared to previous versions.
especially when time is precious.
Finding the right learning should
Learning and development
no longer rely on a single front- 2. Use AI to enhance a pilot
teams must design each one to
end. Work with AI specialists and
maximum effect.
functional leaders to understand
how predictive analytics can
Data and analytics continuously improve the
Using AI and advanced analytics It can also enable you to measure effectiveness of real-time learning
can help you derive maximum the impact learning is having — interventions for the pilot.
value from your data. It can allow and take action accordingly — by
you to mine numerous data aggregating your learning and In contact centers, for example,
sources, and identify trends, gaps performance data. That should static scripts can be replaced with
and opportunities relating to skills unearth trends and correlations dynamic AI-powered versions.
and learning. that weren’t visible until now. Predictive analytics can be used
You can then use your new to identify when customers are
infrastructure to adjust your AI and not satisfied with their service
machine learning models in real call, and automatically amend
time, moving from a reactive to a the script in real time to enhance
proactive and predictive approach. the experience.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

3. Measure the pilot’s impact on


productivity
Combining learning in the flow of
work with new technology offers
practical and effective measures
of learning on productivity; rather
than relying on feedback forms
and training completion rates.

A key part of any pilot, a


measurement map should identify
all the touchpoints and data points
That should create excitement, Build the essential Yet, AI tools are only as good as
confidence and trust when rolling foundations. their data inputs. The earlier you
needed to evaluate success.
it out. tackle the data, including any
Traditionally, learning assessments
1. Engage technology partners underlying quality or accuracy
happen after the fact, often
Work with solution vendors to issues, the quicker the data can
focusing on limited data points like Implementing AI and learning
understand the art of the possible. prove the value of learning in the
training completion rates. Now, as in the flow of work involves
Assess the company’s technology flow of work.
companies adopt large language industrial-scale change. It may
models, measurement maps can affect not just certain groups, landscape now to help you decide
expand to include a variety of but almost every role across the what to build, buy, enhance 3. Protect security and compliance
productivity indicators and offer organization. To achieve such and remove. Using AI to support learning
a more rounded, before-and-after widespread buy-in can be helped in the flow of work will likely
view of employee productivity. with connected, cross-functional 2. Have the data conversation require adapting security and
communities involving employees Engage with the people analytics compliance processes. Work
at varying levels of seniority. team to develop a holistic data with the compliance teams to
4. Scale the pilot
These communities can spread strategy for learning across understand the implications, and
Once the pilot is successfully
the pilot’s success story, identify the business. identify the necessary mitigations
completed and its value captured,
opportunities for future pilots, and and safeguards.
it is time to scale the solution to
get other employees excited about
the wider organization. AI solutions can be a key
the transformation to come.
component of learning in the
A key aspect of the value of a pilot flow of work, dramatically
is that it eases the transition to strengthening the ability to
scale, by presenting a real-world personalize learning at the point of
story of the value generated. need, and improve the relevance
of content.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

04

Lead from
the middle
The middle manager may or The middle manager plays a central
role in translating strategy into action
will likely be indispensable as
and outcomes for their teams. They
you pursue AI, re-shape your are the radar of their organizations,
workforce, and make learning in understanding the tasks their teams
the flow of work a reality. Often carry out in depth. They also know how
performance metrics encourage or
overlooked, undervalued, and
inhibit certain behaviors. With a finger
typically, seen as a blocker to on the pulse of employee sentiment,
change, middle managers have they can assess the impacts of change
the potential to turbocharge on employee engagement and well-
being. In short, they likely know or may
efforts toward the future
know better than others in the business
of work. where key productivity barriers exists.

Yet research suggests that


organizations are not investing in
them. A study by the Chartered
Management Institute found that 82
percent of managers had no proper
management and leadership training
— they are “accidental managers.”9

9
Better Management Report: Take Responsibility, Take Action — CMI (managers .org . uk)

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Such insights enable middle Given their proximity to everyday


managers to do three things: tasks, your middle managers can
quickly assess how effectively The new digital mindset
1. They translate the organization’s technology is being adopted, and
ambitions and transformation whether employees feel equipped Organizations have been told they need to adopt a digital mindset
goals for frontline workers in to make the most of it. This rapid for over a decade. With the advent of genAI, the stakes are higher
terms of their day-to-day jobs. feedback loop is essential for than ever.
Your middle managers are your firms to target skill gaps that could
communication bridge. hamper adoption, or to determine Combining human and machine capabilities will likely demand a
if the technology will not deliver whole new level of digital transformation. Through our work with
2. They gather real-time feedback the anticipated benefits. hundreds of organizations worldwide, KPMG professionals have
on how the strategy is being identified four key attributes that can drive this mindset shift:
implemented, which they can Middle managers are also
escalate to leadership. Connecting end-to-end.
instrumental in creating a culture
A connected enterprise reflects the impact of change and
of psychological safety — a key
3. They recognize change in the disruption on its value chain, business outcomes and
tenet of an organization’s digital
business environment, and help customer experience.
mindset. Without this, employees
the organization to rapidly pivot
are less likely to innovate and Everyone is an innovator:
in response.
experiment with technologies All employees are encouraged to innovate how tasks, roles
like AI. and delivery are carried out by a combination of humans
and machines.
“Organizations must get better at
sensing, learning and adapting to A growth mindset:
the changes happening around An innovative and flexible culture encourages agility,
them,” says Howard-Grenville. collaboration and transformation.
“That means connecting insights,
making decisions, and learning The courage to act and challenge:
from what does and does not Everyone is seen as a leader with the autonomy and
work. Nobody is better positioned freedom to act, while being accountable for meeting
to do that than middle managers.” business objectives.

Middle managers can have a big influence when it comes to instilling


these factors in the workforce. They can connect strategy and execution,
empower people to be creative, and foster a psychologically safe
workplace. KPMG has developed a tool to evaluate employees’ digital
mindset against our model — take the assessment here.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Delivering the future of work


Let’s look for a moment at middle managers’ exact role in realizing the different imperatives we’ve examined in this report.

Making AI work Workforce shaping Learning in the flow of work


In most parts of the world, organizations Managers can validate where employees Your middle managers see first-hand
promote hierarchical structures, and the should be spending most of their time, where productivity issues lie — and
behaviors associated with them. and what they are actually doing. What the skill gaps that cause them. And
is more, they can work with them to they know where learning is having
pinpoint how technology can improve the desired effect on productivity
People, therefore, need permission to
their productivity. and why. This makes them the go-to
carry out more activities than leaders
person for delivering learning in the
tend to realize. That has implications for
flow of work, operating as coaches and
how and when they use technologies They are often responsible for managing
passing on technical knowledge and
like AI to improve tasks and processes. resources, budgets and operational
lessons learned.
Employees may feel they need logistics. If every middle manager did
authorization from leadership — and this just 5 percent more effectively, the
for that to be reinforced by the support cumulative impact would be significant.
of their managers. Without this, they
will lack the confidence to experiment
Plus, to get a great team mix, middle
with AI.
managers can better understand which
roles are more effective in a hybrid
This reinforces the importance of the environment, and which talented
middle managers’ role in nurturing individuals to offer greater levels of
psychological safety. As businesses flexible working.
embrace AI’s transformative capabilities,
managers must give employees the
security to try doing things differently.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Unfreezing the middle


Not equipping managers for this role — or worse, getting rid of them
Middle management is often
described as the ‘frozen middle’
altogether — would risk staff turnover intensifying, and business
— a term to describe their objectives not being met.
resistance to change — and are
typically the first port of call when
Harnessing the power of middle Understanding the reasons for For example, if you are
organizations are cost-cutting.
managers will likely require middle management performance incentivizing managers to compete
a targeted effort that starts issues is an essential first with their team, they are highly
Yet in these unpredictable times, with holding a mirror up to the step. The solutions to then unlikely to lead them effectively.
“77 percent of employees say organization, and asking: Are improve performance are This is common in when team
support from their manager middle managers the best they can multidimensional. They may leaders and members both have
is more important than ever, be? If not, why? include a clarification of role sales targets.
according to Gartner®”.10 expectations, learning, mentoring,
Meanwhile, IDC research coaching, empowerment, conflict
This last question is likely to On occasion, new capabilities and
discovered that middle managers resolution, resource allocation,
produce a wide range of issues that energy will need to be brought into
are increasingly being “tasked recognition and performance-
need to be systematically addressed the organization. The important
to design, support, facilitate and based incentives.
— in a way that is tailored to the thing is to not make assumptions.
preserve the balance between two
needs of each individual manager Gather the evidence needed
centers of power.”11 In other words,
• Is there a skills gap, and can and get to the root cause before
they are the vital bridge between 77% of employees say making any changes.
leaders and workers. targeted training tackle it?
• Is there a lack of motivation?
support from their
Not equipping managers for this • Are their performance targets manager is more Like any problem, middle
management performance can be
role — or worse, getting rid of focusing them on the wrong important than ever improved with the right level of
them altogether — would risk things?
focus. Yet organizations that fail to
staff turnover intensifying, and • Is their workload overwhelming? Whatever the course of action,
do so will struggle to pivot quickly
business objectives not being • Are they lacking the resources shifting performance in the right
enough in the fast-changing future
met. “Reducing the number of they need? direction will mean ensuring
of work.
managers would be entirely the that every aspect of your people
• Are they properly empowered to
wrong thing to do,” says processes is working in harmony.
do what they need to be doing?
Howard-Grenville.
• Are they just not the right fit for
the role?

10
Gartner, “Managers are Cracking and More Training Won’t Help”, 2023, p.2. Gartner is a registered trademark and service mark
of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
11
IDC, “Digital Enablement and the Manager’s Role in Employee Experience”, Doc #US50791723, July 2023 p.5

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Final word
GenAI is already disrupting “There are really only a handful of
models out there — most of which
education and creative
are strikingly similar. Many of them
industries, and the incoming still look a lot like the one used
generation is quickly adapting by General Motors in the 1960s.
to make the most of these new We’re putting our children into our
grandparents’ organizations.”
tools both within and outside of
the workplace.
GenAI can change all that. The
technology can identify and
As it transforms the future of work, recommend where to improve all
genAI can drive the emergence of new aspects of the operating model, from
customer engagement and supply
operating models. Howard-Grenville
chain, through to risk management
points out that many organizations’
and product development. At the same
operating models have barely evolved
time, its capabilities and speed are such
over the decades: that it can make operating models far
more adaptive.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Evolving the Making learning in the flow of work


operating model happen may mean challenging
These include: traditional organizational designs,
With no fixed end-state to aim for, and rethinking functional
organizations must carefully plan Building a Digital Labor Centre management and specialist career
and implement the transformation of Excellence. paths.
of their operating models — to Responsible for governing and
reap the benefits of genAI, and harnessing the firm’s collective There has never been a better time
address the challenges it presents. ability to identify and unlock to be in the People and HR world
the power of new technologies because the biggest challenges
This process cannot be static: It like AI. facing organizations right now are
should continuously evolve based human challenges.
on the latest data. Executives must Adopting a skills-first approach
constantly have their finger on the to your workforce.
The future of work will likely
pulse of AI advances, changing Following the principles of a
demand access to new skills in
business needs and growing talent marketplace — ideally
real time to maximize adaptability
employee demands. And they supported by technology — total
and competitiveness. Delivering
should adapt their firms’ operating transparency of your people
that access will likely require
models in response. capability will likely be essential
organizations to embrace the
when continuously evolving the
power of AI, optimally reshape the
operating model.
Some of the suggestions made in workforce and upskill employees
this report can help businesses through learning in the flow
meet the demands of the of work.
Delivering learning in the flow
future of work through the way
of work.
they operate.
An enabler of operational
effectiveness, learning in
the flow of work drives agile,
adaptable and knowledge-
driven operating models.
As the sophistication of the
learning increases, so too,
the workforce’s efficiency
and productivity.

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Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Transformation never
stops. Neither do we.
At KPMG we believe that business KPMG firms’ suite of business transformation technology solutions
can help you engineer a different future — of new opportunities
transformation is too good an opportunity
that are designed to create and protect value.
to miss. Combining the right tech leading
teach and processes with people whose
insight is as broad as it is deep, are essential
ingredients to successfully transform. KPMG KPMG
Connected Enterprise Powered Enterprise
KPMG firms have worked at the heart of global businesses Rebuild your business, Drive outcome-driven
for many decades, helping clients realize the potential end to end, around your functional transformation.
of their people and technology and working together to customers.
achieve real-world outcomes. Because when people and
technology are in harmony great things happen.

Making a world of difference:


KPMG people can make all the difference on your
KPMG KPMG
transformation journey. Together we can help you to orient Trusted Elevate
your business around the customer, optimize functions for
Build and sustain the trust Unlock financial value
a new era, manage enterprise risk and regulation for a safer
future, rise to a new level of value creation, and create an of your stakeholders. quickly and confidently.
environment for managing ongoing change.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 29
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Future of work —
Research methodology:
This thought leadership aims Employees must have been Secondary data:
to explore the perceptions of employed full- or part-time by
employees on the future of work an organization with 5,000 or Relevant reports, research
amid post-pandemic recovery, more employees across various papers, and articles from
fast AI advancements, unstable industries such as consumer/ reputable sources, including
geopolitical instability, and a retail, government, healthcare Forrester, Gartner®, and IDC.
looming global recession. and life sciences, financial
services, technology, and others.
Expert opinions:
The research methodology
is based on the analysis of Data was collected using a Interviews of subject matter
primary and secondary data, self-administered structured experts and professionals.
as well as expert opinions from questionnaire. The survey was
leading professionals. distributed using an online
survey tool. It followed ethical
guidelines to protect the
Primary data: privacy and confidentiality of
The research targeted employees participants.
working in Australia, Canada,
Germany, the UK, and the US.
The sample size consisted of
over 4000 employees.

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 30
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Acknowledgments
We would like to sincerely thank the following subject matter professionals for contributing to this year’s research:

David Doyle Robert Bolton Mark McCarney


Founder and CEO of Forestreet Partner, KPMG in the UK Director, KPMG in the UK

Simon Haines Felicia Lyon Freneka Mumford


Founder and CEO of Simply Get Results Principal, KPMG in the US Director, KPMG in the UK

Jennifer Howard-Grenville Alex Ball Lucy Pringle


Diageo Professor in Organization Studies Director, KPMG in the UK Director, KPMG in the UK
at the University of Cambridge Judge
Business School Karla Baumler Erin Prothero
Director, KPMG International Associate Director, KPMG in Australia

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 31
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

Contacts Local contacts


Australia
Susie Quirk
Hong Kong (SAR), China
Kate Munroe
Singapore
Nicki Doble
E: squirk1@kpmg.com.au E: kate.munroe@kpmg.com E: nickidoble@kpmg.com.sg

Research contacts Brazil India South Africa


Camilla Padua Vishalli Dongrie Collins Makhado
Ruth Svensson E: cpadua@kpmg.com.br E: vishallidongrie@kpmg.com E: collins.makhado@kpmg.co.za
Global Head of People and HR Center of Excellence
KPMG International Canada Ireland Spain
E: ruth.svensson@kpmg.co.uk
Stavros Demetriou Conor McCarthy Cristina Hebrero
E: sdemetriou@kpmg.ca E: conor.j.mccarthy@kpmg.ie Rodriguez
Nermin Younes E: chebrero@kpmg.es
Global People and HR Center of Excellence China Italy
KPMG International UAE
Amis Ren Irene Sebastiani
E: nelglay@kpmg.com Marketa Simkova
E: amis.ren@kpmg.com E: isebastiani@kpmg.it
E: msimkova@kpmg.com
Meaghan D’Arcy France Japan
Partner, Workforce and HR Advisory UK
Cecile Decourtray Kazuya Oike
KPMG Australia Mark Williamson
E: cdecourtray@kpmg.fr E: kazuya.oike@jp.kpmg.com
E: meaghandarcy@kpmg.com.au E: mark.williamson@kpmg.co.uk
Germany Mexico
John Doel Anna Richter Olivia Segura
US
GTM Service Integration and Innovation Leader Lisa Massman
E: annarichter@kpmg.com E: osegura@kpmg.com.mx
KPMG in the US E: lmassman@kpmg.com
E: jdoel@kpmg.com Greece Netherlands
Georgia Kalemidou Renee de Boo
Mark Williamson E: gkalemidou@kpmg.gr E: deboo.renee@kpmg.nl
Head of People Consulting
KPMG in the UK
E: mark.williamson@kpmg.co.uk

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Future of work 32
Foreword Introduction 01. Embracing AI 02. Shape the workforce 03. Learn in the flow 04. Lead from the middle Final word Methodology Acknowledgemets Contacts

kpmg.com/futureofwork
The information contained herein is of a general nature and is not intended to address
the circumstances of any particular individual or entity. Although we endeavor to provide
accurate and timely information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be accurate in the future.
No one should act on such information without appropriate professional advice after a
thorough examination of the particular situation.
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG
International entities provide no services to clients. All rights reserved.
KPMG refers to the global organization or to one or more of the member firms of KPMG
International Limited (“KPMG International”), each of which is a separate legal entity.
KPMG International Limited is a private English company limited by guarantee and does
not provide services to clients. For more detail about our structure please visit: kpmg. Some or all of the services described herein may not be permissible for
com/governance. KPMG audit clients and their affiliates or related entities.
The KPMG name and logo are trademarks used under license by the independent member
firms of the KPMG global organization.
kpmg.com/futureofwork
Throughout this document “KPMG” refers to the global organization or to one or more of
the member firms of KPMG International Limited (“KPMG International”), each of which is
a separate legal entity.
MADE | MDE200135 | December 2023

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