Digital transformation in Hong Kong’s workforce is imminent

By KPMG | Wednesday, 16 Jan 2019

HR executives need to focus on workforce shaping, improving employee experience and rapid reskilling of labour to prepare for the challenges

The majority of surveyed senior human resources executives in mainland China and Hong Kong recognised the need to transform their workforces, KPMG survey found. Reshaping the workforce with technology, improving employee experience and reskilling labour are top priorities.

Titled The Future of HR 2019, the 21st annual report surveyed more than 1,200 senior HR executives, including 134 from mainland China and Hong Kong. As much as 90% of mainland China and Hong Kong respondents agreed that their workforces need to be transformed in light of the changing market landscape, the survey found. Only 37% of mainland China respondents and 11% in Hong Kong were confident that their HR functions were able to respond to change, compared to 36% globally.

“HR executives need to shift from traditional work force planning to much more near term workforce shaping — align your company’s business and human resources needs — and adopt technology to enable that,” said Peter Outridge, Head of People & Change Advisory and Partner, Hong Kong, KPMG China. “They also need to focus on employee experience, looking further than the current traditional employed labour workforce and think about contingent labour and flexible forms of working. Meanwhile, rapid reskilling is a priority. Given the pace of change, organisations need to be constantly equipping and empowering people to evaluate new opportunities and issues, and embedding the required capabilities to be successful in a time of unprecedented change.”

In terms of investment in HR technologies and digital solutions, HR executives in mainland China and Hong Kong have mainly invested in “human capital management software”, “HR mobile applications” and “payroll system and/or vendor” solutions over the last 24 months. While the trend is set to continue in Hong Kong in the next two years, respondents from mainland China highlighted robotics process automation (RPA) and artificial intelligence (and/or machine learning) as upcoming priority of HR technologies.

Other key findings about mainland China and Hong Kong:

· 45% of surveyed HR leaders said they have a digital transformation work plan in place, slightly higher than global average at 40%

· At least 40% of surveyed respondents agree that preparing the workforce for a future with AI is one of the biggest challenges HR will face over the next five years

· Around two-thirds of surveyed HR leaders in mainland China which are currently undergoing a digital transformation (or completed recently) consider skill deficiencies and lack of resources to be the key barriers to moving from initial phases of the transformation to scale, around half of Hong Kong respondents said the same

· Workplace culture is another barrier to digital transformation identified by 39% of Hong Kong respondents (vs 29% in mainland China); 38% of Hong Kong respondents said their current culture is more task oriented rather than innovative or experimental

The survey also highlighted the difference in opinions between the HR teams and their senior leaders: 60% of the global surveyed HR executives believe AI will eliminate more jobs than it creates, while 62% of surveyed CEO believe AI will create more jobs than it eliminates, according to KPMG’s 2018 Global CEO Outlook.

“HR executives need to make sure they are spending more time with the C-suite, and really understanding how HR enables the business strategy of the company,” said Jonathan Lo, HR Transformation Lead and Partner, Hong Kong, KPMG China. “Organisations making limited strides could soon see today’s technology disrupt them out of existence. And those largely inactive organisations face a much shorter timeline to extinction as the digital economy quickly renders them irrelevant.”


reskilling Digital transformation