At KPMG’s spring 2023 press briefing — the firm’s 11th such event — experts argued that becoming data-driven helps reinforce human-centered approaches in organizations. Data-driven HR offers significant opportunities and interesting technological solutions, particularly for companies that work with large data volumes and are open to change.
Workforce remains the top operational priority
KPMG’s October 2022 CEO Outlook showed that despite inflation and the prospect of recession, corporate long-term goals remained broadly unchanged. However, leaders face tension between short-term adaptation and three-year plans. The survey found that 71% of executives considered retaining talent and the long-term effects of the pandemic and geopolitical tensions among the biggest challenges. Preparing for recession, most firms had already frozen or planned to freeze hiring within six months of the report (75%), and had reduced or planned to reduce headcount (80%).
Consequently, retaining employees with critical skills has become essential for meeting three-year objectives: 25% of companies ranked the employee value proposition as the top operational priority for attracting and keeping talent.
Beyond pay: employee experience and retention
Executives see rising inflation and living costs as making talent retention harder, so many companies apply a holistic approach focused on employee experience. Because pay increases often do not outpace inflation, non-salary benefits, flexible working conditions and work–life balance measures are gaining importance for retention.
Talent attraction and the role of analytics
Methods for attracting and retaining talent are evolving. In many sectors, nearly half of leaders identify a shortage of suitably skilled colleagues as the main barrier to implementing digital technologies. According to the KPMG Future of HR study, more than half of participating leaders said their firms have invested or are investing in HR analytics platforms, and companies are collecting and using an increasing variety of data types to inform HR decisions.
Halász Erika, Director of Strategy and Operations Advisory at KPMG, emphasized that analytics drawn from across the organization help accurately understand employee needs and enable more targeted interventions. Analytics contribute to building a proactive, resilient organization rather than one that only reacts.
HR’s rising strategic role
The pandemic accelerated HR’s transformation from an administrative function to a strategic actor: crisis conditions raised HR’s visibility and integrated HR into day-to-day decision-making at a strategic level. Strategic HR links corporate vision and goals with HR strategy and processes, ideally supporting business objectives rather than merely following them. Communicating corporate ESG efforts and results to employees and prospective hires is also an important HR responsibility, since responsible, inclusive workplaces can be more attractive and supportive of retention.
Gaps between current capability and future relevance
KPMG’s Future of HR examined six thematic areas comparing current capabilities with future relevance and found notable gaps. For example, while 50% of companies see building a culture of organizational agility as a top future priority, only 19% believe they currently possess that capability. Similarly, 57% consider preparing their organization for future challenges very important, but only 25% feel they are already capable of doing so.
Other areas with significant preparedness gaps include introducing digital HR solutions, improving employee wellbeing and mental health, and developing an internal talent marketplace.
KPMG’s respondents also noted a common challenge: many leaders believe Hungarian employees find change and the associated stress harder to manage than foreign counterparts, partly because these skills are not typically taught in domestic higher education. This suggests a need both for education reforms and for employers to actively support growth mindset, resilience and stress-management with practical tools.
Internal talent marketplace and career planning
The internal talent marketplace is an increasingly important concept. By clarifying business needs and understanding the organization, companies can redefine what constitutes talent or a key employee, better assess training needs and enable more flexible deployment. KPMG participates in talent-management projects and external talent-market research. Creating and continually developing internal talent markets supports retention, boosts organizational performance and information flow, and aids career and succession planning.
Digital solutions and AI in HR
Digitalization plays a growing role in HR beyond classic administration: tools are increasingly used in recruitment, training, change management and identifying and supporting talent. Kálmán Anna, Senior Manager at KPMG, stresses the need for forward thinking: organizations must be clear about which data they connect and why, because process analytics can provide data that enables more objective decisions and reduces cognitive bias.
Artificial intelligence is already used in HR for tasks such as automating parts of recruitment background work, identifying skills gaps or answering employees’ frequently asked questions more quickly. KPMG estimates that technological progress could transform up to 1.1 billion jobs over the next decade, creating both challenges and opportunities. Proper use of digital technologies enables better allocation of employees’ time to value-creating activities, which can yield competitive advantages.
Conclusion
KPMG experts conclude that data-driven HR can strengthen human-centered approaches and raise HR’s strategic profile. However, many firms still face significant gaps between current capabilities and future needs. Investments in analytics, digital HR solutions and internal talent markets can help retain talent and improve organizational resilience, provided those developments are transparent and genuinely serve employees’ interests.
