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      HR leaders are under increasing pressure to deliver strategic value in a rapidly changing world. With AI, demographic shifts, and evolving workforce expectations, traditional HR models are no longer fit for purpose. Many organisations have moved to cloud-based platforms but further transformation is needed to meet the pace of change.

      This guide outlines practical steps to redesign the HR operating model, embed ethical AI and build a digitally-enabled workforce, helping HR become a true strategic partner to the business.

      The evolving HR landscape

      Today’s workforce is more diverse than ever, with five generations working side by side. Skills needs are shifting fast and AI is transforming how organisations recruit, develop, and retain talent. Yet many HR teams still operate in silos, with outdated systems and limited cross-functional integration.

      Common challenges include:


      Mohammed Bari

      Partner, Powered HR

      KPMG in the UK

      • Skills gaps and lack of strategic workforce planning
      • Technology that doesn’t meet evolving business needs
      • Managers overwhelmed by change
      • Resistance to transformation across teams


      Building a future-ready HR function

      Effective HR transformation starts with a clear vision and alignment to business strategy. Organisations must rethink their operating models, prioritise employee experience, and invest in digital skills across the workforce.

      Agentic AI is emerging as a powerful enabler—automating workflows, personalising learning, and proactively managing engagement. When integrated responsibly, AI can drive up to 50% productivity gains and significantly reduce time-to-hire.

      Key focus areas

      • Align HR strategy with business goals
      • Design adaptable, integrated operating models
      • Embed AI and automation to enhance performance
      • Build digital skills and close capability gaps
      • Prioritise ethical use of data and technology

      Why KPMG and Workday

      KPMG and Workday bring together transformation expertise and advanced HR technology to help organisations build agile, AI-enabled HR functions.

      KPMG offers deep experience in HR operating model design, process optimisation and change management, supported by proven accelerators like 250+ KPIs and 140+ dashboards. Workday provides a unified, intuitive platform powered by automation and real-time insights.

      Together, we enable faster transformation, improved employee experience, and long-term value, helping HR teams stay future-ready and aligned to business strategy.


      Our advisory insights

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