Rethinking HR in a Changing World

Rethinking HRg
in a Changing
WorldWorld
January 2013January 2013

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1

We will cover three topics today
Overview & Approach01
Highlights & Insights02
Resources03 Resources03
2

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 International
Countries: 152
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
Partners: 8,000
Revenue: $22.7 billion
ASPAC
5,000k
EMEA
20,000k
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 Consulting
KPMG LLP (US)
100+ global methods and toolkits to bring
the firm’s vast knowledge to each client
Tax
Audit
Enterprise Technology Solutions
Technology Enablement Solutions*
Shared Services & Outsourcing*
Business Intelligence Solutions*
Change Management*
Financial Management
Human Resources*
Strategy & Operations
CIO Advisory
KPMG, LLP (US)
Offices: 87
Professionals: 30,000+
Partners: 1,882
Revenue: $6 billion
3
* Includes focused HR Professionals
Change Management

Survey sponsored by KPMG’s Global HR Center of Excellence, which
provides thought leadership and expertise globally
Senior practitioners Proven capability
Superior execution
Broad business backgrounds
Deep HR domain expertise
Supplement local resources
Sector focus and issues driven
Globally focused
Consistent delivery Web presence
World-class
HR
TransformationConsistent delivery
Minimum 10 days’
training per year for
all P&C practitioners
Knowledge
p
Blogs
Specialty forums
Conferences
Advertisements
Transformation
Services
management and
knowledge sharing Surveys
White Papers
Conferences
Outreach
4
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 functionThe 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
6
10%
Latin America

Highlights and InsightsHighlights and InsightsHighlights and InsightsHighlights and Insights

Four key insights to consider for your organization
1
Balancing 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
opportunities
Maintaining sustained employee
engagement in the face of increased
career mobility, improved economic
circumstances, and increased
multiple generations and geographies
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
g
talent, 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
8

1
opportunities
2
business success
lti l ti d hi
opportunities
competition
3
transform
4
player
g
business
9

1
opportunities
2
business success
lti l ti d hi
opportunities
competition
3
transform
4
player
g
business
10

1
opportunities
2
business success
lti l ti d hi
opportunities
competition
3
transform
4
player
g
business
11

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
12
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
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, anytime
P 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, anytime
P f l i i l diffPrepare for multi-generational differences
Questions to consider
Prepare for multi-generational differences
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?
13

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
14

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
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
Current demographic projections for the next
decades point to employment shortages for
most of the world’s markets
y
retaining key talent today
30%
“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
15
Professor of the School of Management and Labor Relations at
Rutgers University

Develop contemporary employment brand and social media
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
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 managementHow 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?
16

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
17

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 more
insightful, 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
y
be 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 for
business intelligence
57%
Social media to
reach alumni
54%
Social network sites
to recruit talent
65%
Delivering business apps
via the “software as a
service” and Cloud
models
49%
18
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
19
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
20

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)
21

Create Social media strategy and opportunity plan
Create Social media strategy and opportunity planCreate 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 ownershipCalculate and benchmarking total cost of ownership
Where are you investing in new HR related technology?
Calculate and benchmarking total cost of ownership
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 relatedyp y p p p
challenges?
How are you leveraging social media to engage your current
and future employees?
yp y p p p
challenges?
How are you leveraging social media to engage your current
and future employees?
22

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
23

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
strategy
35%
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%)
strategy
M i tEnsuring succession planning is in place
(22%)
Supporting an increasingly virtual and
flexible workforce (24%)
(22%)
Supporting an increasingly virtual and
flexible workforce (24%)
Managing costs
39%
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
24
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 asset
82%organizations are not viewed as strategic or a
business impacting asset.
organizations are not viewed as strategic or a
business impacting asset.
25

Understand how the organization makes money
Understand how the organization makes moneyUnderstand 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 movesCandidly assess HR talent, support cross-functional moves
How is HR perceived at your company? How do you know?
Candidly assess HR talent, support cross-functional moves
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?
26

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
27

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%)
28
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 iEvolving 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 AmericaLatin 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 y
expand into new markets are lower priorities
Only region not forecasting growth in
outsourcing
Investment priorities: Web-based/Mobile
platforms followed by Data Analytic tools
29
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
30

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
TransformingTransforming
HR throughHR through
technology andtechnology and
datadata
TransformingTransforming
HR throughHR through
technology andtechnology 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 objectives
D 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
32
[coming soon]

HR Transformation Center of Excellence Home Page
hrtransformation@kpmg.com
Executive summary
and full report
PodcastsPodcasts
White papers
Updated frequently
ith t twith new content
For more information, please contact
P l tt l i @k K ki @k
33
Paulette pwelsing@kpmg.com or Karen kisaacson@kpmg.com

Placeholder for infographic
34

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All
rights reserved. NDPPS 135962
The KPMG name logo and “cutting through complexity” are registered trademarks or trademarks of KPMGThe KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG
International.

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