AI's impact in reshaping organizations and workforces

AI's impact in reshaping organizations and workforces


According to one senior HR leader at a large global bank: “The HR function is moving from a world where it used to match people to jobs to a world where it matches skills to work.” 

AI's impact in reshaping organizations and workforces

This atomization of jobs – an unprecedented division of labor between bots and employees as AI takes on not only tedious, repetitive, low-value job functions but also increasingly cognitive tasks such as medical diagnosis or financial loan approval – holds significant implications for organizations and their workforces, among them:

1.    The emergence of ‘boundary-less’ functions and, in time, functionless enterprises.

AI affects tasks not jobs. Job atomization opens the possibility of reconfiguring organizations and radically transforming their job functions and processes. If organizations want to achieve productivity gains from deploying AI, they need to reorganize work at the task level, otherwise it will have a fractional ‘arms and legs’ impact from AI which likely won’t deliver productivity gains. Our work with businesses in today’s insurance sector, for example, illustrates this fast-emerging fluidity in work structures and the way tasks are performed as AI technology enters the workplace. Traditional insurance underwriting can be highly automated by AI but, as one multinational insurer observed, any reduction in traditional underwriting work has coincided with the emergence of a new role embracing both underwriting and adjacent disciplines such as risk consulting and product development.

Similarly, an engineering firm described an emerging discipline that’s focused on engineering information integration. This new role draws on a systems-thinking mindset and disciplines and connects traditional engineering disciplines underpinned by such technologies as ‘digital twins. They also commented on the fact that these skills and capabilities are not adequately covered in the training and education of engineers, which was seen as too narrow and not oriented toward a systems-thinking mindset and capability.

We will witness similar changes affecting jobs in all sectors and industries in the future – from HR, IT and finance managers to professionals in journalism, medicine, engineering, law, accountancy and beyond. Business leaders all describe similar dynamics at play amid the adoption of AI and related technologies. They can be summarized as follows, based on the conclusions of a major global bank that explored the impact of AI on their work structures and organization:

— the belief that there will be a reduction in the number of people employed for any particular role

— bigger, more systemic and integrating roles for those who remain

— roles evolving to embrace adjacent job functions

— the need for organizations to be increasingly agile and networked to deliver greater cross-boundary connections and collaboration among job roles and tasks

— decision makers having access to ‘one source of the truth’ as decision-making becomes cognitively enabled by AI and new data-based insights.

2.    The need to reinvent the way work gets done in order to realize productivity gains

The unfolding reinvention of work is a historic opportunity. Yes, AI will have both a disruptive and a disturbing effect on workers, especially in the short term. But it will also deliver remarkable new opportunities for skilled employees to play to their strengths, while unleashing new levels of productivity and value to employers. This is particularly significant when you consider that business productivity has not boomed in proportion to the untold billions of dollars invested in technology in the last 10 years, notably in non-manufacturing sectors.

Research by the KPMG Data Observatory and the Data Science Institute at London’s Imperial College suggests that the productivity puzzle will continue even amid AI’s introduction unless we inherently rethink work. Why? Because AI will, at least initially, affect tasks within jobs, not whole jobs. Therefore, potentially significant productivity gains will be realized only if work, processes and organizations are reinvented to assign, integrate and optimize the roles performed by machines, humans with machines, and humans alone.

The gig economy offers a perfect example of how work will be transformed in the future, how the global workforce will be impacted, and why workforce shaping is vital for the future. More skilled professionals are rejecting the 9-to-5 working life and choosing the gig economy as a long-term career and lifestyle choice. Some 54 percent of independent workers have embraced flexible work by choice to meet their personal needs and goals, according to research by Adecco and LinkedIn. Only 36 percent of respondents regard gig work as a stopgap between direct, permanent roles. Flexible working is becoming an attractive part of the status quo, rather than a temporary solution.

This phenomenon poses a new ‘innovation imperative’ for modern organizations and there are early signs that forwardlooking leaders are finally waking up to this reality. The Economist 6 magazine recently suggested that perhaps the lingering ‘productivity paradox’ is slowly becoming extinct. Whether there will be less work for humans to do in the future is the subject of much debate – but not the point of our discussion. What we do know for now, however, is that if business leaders embrace the need to strategically reinvent their organizations via AI investment, the impact on how efficiently, productively and profitably tomorrow’s workforces can operate will be unprecedented.

In just about any industry, the use of AI will affect how humans in evolving roles interact with each other. Consider healthcare around the world, which is under intense strain. Productivity gains arising from AI and new technologies can bridge the current productivity gap and help the sector meet soaring future demand for health services as the global population ages.

In this scenario, more people will be needed in healthcare. But as Mark Britnell, Global Chairman of Infrastructure, Government and Health at KPMG points out in his forthcoming book Human: Solving the Global Workforce Crisis in Healthcare, 7 health sector workers will need different skills within redefined roles that relate to each other in diverse new ways. Pharmacists will operate wellness centers, treatment and consultation will move to virtual interaction supported by AI, and care pathways will be completely redesigned via cognitive AI augmentation.

© 2024 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.


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