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Living with a robotHow intelligent automation is changing the talent ecosystem

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© 2018 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. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 714084

Intelligent automation and robotic labor are triggering an unprecedented, monumental change in the nature of work. Current technologies of this “second machine age” have the potential to impact nearly half of all work activities in the United States by 2025.1 And while many jobs will be replaced by automation, many experts believe that technology will create at least as many jobs as it displaces.2

Living with a robot

1 Clarity on Digital Labor, https://assets.kpmg.com/content/dam/kpmg/ch/pdf/clarity-on- digital-labor-en.pdf

2 Aaron Smith and Janna Anderson, “AI, Robotics, and the Future of Jobs”, Pew Research Center, August 6, 2014, http://www.pewinternet.org/2014/08/06/future-of-jobs/.

© 2018 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.

The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 714084

3Living with a robot

Leading in a digital ageWhile many organizations are evaluating or implementing automation, few organizations are sufficiently retooling their talent strategies to keep up. As robotics moves beyond the early adopter phase, the pace of change will accelerate, leaving unprepared organizations behind.

This fast-changing talent landscape requires companies to update their talent strategies to align to the business strategy, including the digital strategy. Since most talent strategies are rooted in a pre-digital human resources model, updated talent strategies that embrace intelligent automation and robotics will set the foundation for a successful talent ecosystem.



Technology economicsDigital labor is on the rise due to improved performance and lower cost of digital technologies. Cloud processing and storage, cognitive technology, Data and Analytics, the Internet of Things, mobile technologies, and social media are converging to create effective alternatives to labor at lower costs.

Demographic impactDespite a decline in labor, productivity and economic growth is expected to continue as a result of the positive effects of digital labor.

Service provider impactThe $1.2 trillion outsourcing space is experiencing declining growth. Labor arbitrage is giving way to digital technologies, which makes location less relevant. For instance, top-tier service providers have introduced cognitive platforms as an alternative to labor.

Labor impactIt is estimated that digital technologies will change the landscape of knowledge workers, with technology performing the equivalent of approximately 120 million employees by 2025. Reskilling will be key for both employees and employers.

million workers3

130

The pervasive impact of intelligent automation

Economic impactThe current knowledge worker economy is estimated to employ 240 million with a cost of $9 trillion.

It is estimated that digital technologies will automate almost half of tasks by 2025—with the productivity of $5.5–6.4 trillion in equivalent labor.

trillion3

$6

3 KPMG’s Clarity on Digital Labor, 2017. https://assets.kpmg.com/content/dam/kpmg/ch/pdf/clarity-on-digital-labor-en.pdf© 2018 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. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 714084

https://assets.kpmg.com/content/dam/kpmg/ch/pdf/clarity-on-digital-labor-en.pdf

Talent to advance the digital agendaLeaders often overlook or underestimate the talent changes required for success with intelligent automation and robotic labor. According to KPMG’s 2017 CIO Survey, 62 percent of IT leaders report a technology skills shortage with data analytics as the most in-demand skill.4

But addressing recruiting is only a small part of the solution. New talent strategies, competency models, career paths, and workforce plans are key. Additionally, companies need to invest in talent technologies and train or hire talent team members who can advance the digital agenda.

Workforce shaping Adaptive workforce realignment for

evolving digital labor needs

Talent impactsHiring, reskilling and

exiting talent

Changing behaviorsAdopting and adapting the

new ways of working

Organizational & people impacts

Culture shift Need for agility and

innovation

Leadership vision Agreeing on future state vision

for the organization

Unique characteristics of digital labor implementations

Speed of implementationThe rate of changes is faster than traditional

process and system implementations

Constant changeDigital labor implementation will be iterative to

continuosly improve productivity and ROI

4 2017 Harvey Nash/KPMG CIO Survey https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2017/07/harvey-nash-kpmg-cio-survey-2017.pdf

of IT leaders report a technology skills shortage with data analytics as the most in-demand skill

62%




The digital agenda reveals the need for a modern talent management strategy more than ever. One that is deliberate but agile enough to withstand the rapidly evolving workplace disrupters.


Does human resources have a strategy to have the right people, in the right places, working on the right initiatives to drive the organization’s business strategy?

As roles and responsibilities are redesigned, updated capability, skill, and competency models will be required. New competencies like digital competence may be required, while others like analytical skills, strategic mind-set, results orientation, and talent development may take on greater prominence. Some organizations may need to redefine their core competencies.

Updating competencies will lead to updates in career paths. By redesigning and communicating new career-progression opportunities, organizations can reinforce their commitment to the workforce and better engage and retain talent. Moreover, updated career paths will help organizations attract and develop a pipeline of the talent needed in the future.

Updated talent strategies, competency models, and career paths will improve workforce planning. Strategically driven workforce planning can help bridge potential talent gaps, which is especially important with the rising demand of digital skills. Intelligent automation also has major cost-saving implications, allowing companies to put those savings towards hiring more strategic roles and reinvesting in other key talent management strategies.



Intelligent automation is not so much a threat to the human workforce as it is the next evolutionary step toward ever smarter, productive, and innovative employees.

—Cliff Justice, Principal and Lead for Cognitive Automation Initiatives, KPMG LLP

When KPMG worked with a leading gas and electric company to streamline processes, the introduction of a Robotic Process Automation uncovered potential savings of $6.6 million over three years. In addition, the agile, scalable business services operation model that KPMG developed for the client could save them around $30 million a year. At a large telecommunications company, KPMG introduced multiple rollouts of Robotic Process Automation and the client has saved millions of dollars, expecting a return on its investment within 15 months.


Shifting to higher value work like strategy and analytics, from repetitive, manual tasks, will be essential to remain relevant in the marketplace.Additionally, having more strategic advisory roles can lead to higher job satisfaction and better retention. Beyond strategic roles, intelligent automation can help professionals work faster with much greater throughput and efficiency.

In addition, talent acquisition will need to be retooled to align with the updated talent strategy and workforce plan. Succession and retention approaches will likewise need to be revisited to minimize talent risk.


So, how do we retool talent management for the digital age?

Redesign career paths – Career paths reflect the organization’s vision for talent and are one of the most visible features of talent programs to new hires and employees. Career paths need to be realigned to reflect the firm’s updated talent strategy for a digital future.

Align leadership vision – This is the first critical step to support an update to talent management programs. HR and business leaders need to own an updated talent strategy. In addition, more frequent talent strategy sessions will provide the best return on investment, reducing the risk of missing any significant labor market shifts.

Require digitally savvy leadership – Technology is no longer IT’s business; it is everyone’s business. Don’t settle for leaders hiring for tech skills they don’t comprehend. Make digital competence a core leadership competence and create a digitally savvy leadership pipeline. Revisit competencies for business leaders, tech workers, and human resources. HR teams need to be ready to recruit, develop, engage, and retain top tech talent.

Ensure tech and HR are sitting at the same table – Tech savvy leaders need to be involved in talent strategy and workforce planning. HR needs tech savvy leadership. As significant digital strategies are planned, HR needs to be engaged and ready to make frequent adjustments to its talent plan. Talent impact needs to be part of every tech strategy discussion.

Update workforce plans – Effective strategies, competency models, and career paths, along with business strategy and planning inputs, will point the way to improved workforce plans. Knowing how many employees of each new job family are needed in each location by specific dates will be key to preparing the organizations for the future.

Retool Talent Acquisition to hire for learning potential – Technologies change fast, and employees with strong problem-solving skills, analytical competence, and excellent learning potential can quickly adapt to new technologies. Your current workforce may not be skilled in Hack, Julia, Dart, iOS/Swift, Google Go, and Alexa, but having people who can learn new technologies will reduce risks and costs.

Investing in such a wholesale update to a talent program is a major undertaking that can provide significant rewards and reduce the risks posed by intelligent automation and robotic labor. Companies that postpone or avoid these changes will find themselves far behind their competitors.

In addition, talent acquisition will need to be retooled to align with the updated talent strategy and workforce plan. Succession and retention approaches will likewise need to be revisited to minimize talent risk.



Questions to consider:

—What opportunities are there to improve your employee value proposition to be more attractive to workers with high-demand digital skills?

—What is your strategy to grow your digital capabilities including analytics?

—What will be your organization’s workforce structure 3, 5, and 10 years from now?

—How engaged is your talent team in evaluating the impact of technology strategies?

—How engaged is your tech team in contributing to talent planning?

—Is your digital and analytics team involved in decisions across sales, marketing, supply chain, customer experience, and other core functions?

—How robust is your training capability to enable workers to embrace the digital age?

—How detailed are your plans to reskill, upskill, or move some of your workforce?

For more business insights, analysis, and perspectives from KPMG’s Future of Work series, visit kpmg.com/us/FutureofWork

11Living with a robot © 2018 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. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 714084

http://www.kpmg.com/us/FutureofWork


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living with a robot - kpmg · living with a robot 5 technology economics digital labor is on the...

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