The emergence of the functionless enterprise
The emergence of the functionless enterprise
Insight

The emergence of the functionless enterprise

HR execs lead the shift in business models to create an agile workforce able to meet market demands and increase their bottom line.

Last year, the World Economic Forum1 reported that a majority of employers expect 42 percent of their required workforce skills to shift by the year 2022 amid the proliferation of digital processes and the integration of digital and human labor. In Rise of the humans 3: Shaping the workforce of the future, KPMG wrote about how visionary leaders are working to determine the skills and capabilities needed to foster business growth and profitability. This process, known as workforce shaping, enables job structures and careers to remain agile, so they reflect the overall business strategy. The outcome is a functionless enterprise, where the skills being used—whether human or robotic—are more important than the company’s organization.

The future is now when it comes to disruption impacting the workforce. As technology continues to reshapes jobs by redefining work, HR executives can help CEOs achieve their agenda of digital disruption by creating a workforce that enables strategic growth. According to KPMG’s survey “The future of HR 2019: In the Know or in the No,” 70 percent of HR executives recognize the need for workforce transformation, and the transition has already begun.

Step-by-step integration and job evolution

As technology reshapes jobs and new roles emerge, the organization’s workforce and its traditional structure will change to foster growth and utilize resources to their fullest potential. As HR is challenged to find the right skills for tasks and projects, the process also enables HR leaders to make adjustments in accordance with the business strategy. They’ll be able to take advantage of opportunities to break down department silos and reorganize the business structure to better serve the current market needs, e.g. IT employees may no longer be housed in the IT department but embedded in other aspects of the business.

Embracing technology is not without its challenges, and 42 percent of HR leaders that responded to our Future of HR Survey believe the biggest challenge HR will face in the next five years is the integration of IA and machine learning. Less than one out of 10 feel “prepared” or “very prepared” for the changes. 

Regardless of opinions, organizations have reported similar instances with the adoption of AI and related technologies, which include:

  • Increasing agile workforce and network to foster cross-boundary connections and collaboration among roles and ranks
  • The belief that the number of people employed for any particular role will be reduced
  • More systemic and integrated roles for those who remain with employees embracing adjacent job functions
  • One clear focus for the business as decision-making becomes cognitively enabled by AI and new data-based insights.

Contingent workers & re-skilling

With the rise of the functionless enterprise, the ability to build new skills amid emerging task requirements and technologies will be imperative for current and future employees. Sixty-five percent of chief information officers (CIOs) say internal skills or “a lack of people with the right skills” is a major barrier preventing the IT department from supporting a culture of constant digital transformation (KPMG’s CIO survey).

One approach to aid in the company’s digital transformation is to employ contingent or “gig” workers. As discussed in KPMG’s “Growing pains,” 99 percent of companies that responded in that survey reported the use of contingent workers to acquire the necessary skills to enable technology.

Another proactive approach is the re-skilling of current workers. AT&T recently began a massive re-skilling of more than 100,000 workers in order to deliver “software-defined networking.” 2 With the price to rehire high and the process of finding candidates with the necessary skills difficult, AT&T decided to invest in its own employees. This method enabled AT&T to embrace the future with a modernized, skilled workforce already familiar with their corporate culture, helping to cut recruiting and hiring costs while also empowering their own workers.

HR has an essential role to play in the C-suite’s agenda of digital disruption. As the enterprise forgoes its traditional structure, HR leaders need to lead the shift in business model and create a workforce able to meet market demands and foster strategic growth. 

To learn more on how to innovate your HR department and envision a new future for your company through our series “The Future of HR.”

 

1 World Economic Forum, The Future of Jobs Report 2018, September 17, 2018.

2 CNBC, AT&T’s $1 billion gambit: Retraining nearly half its workforce for jobs of the future, March 13, 2018
https://www.cnbc.com/2018/03/13/atts-1-billion-gambit-retraining-nearly-half-its-workforce.html