Getting it right on talent

What people do at work and how they do it is linked to technology like never before. And as CEOs commit to hiring more people, humans will be centre stage for some time.

Business leaders in Ireland north and south, in common with their global counterparts are looking to hire like never before. In the context of a record number of people at work in both ROI and NI, 97 percent of respondents in ROI and 90 percent in NI expect to increase headcount in the next three years.

This is up from 70 percent (ROI) and 67 percent (NI) only two years ago. Notwithstanding the good news on jobs, we also asked respondents about talent risks. 90 percent of CEOs in ROI and 67 percent in NI believe that lack of talent and reskilling poses a real threat to their company prosperity in the near term in comparison with 65 percent worldwide.

Our research also confirmed generative AI as a top investment priority. Over two thirds (67 percent) in ROI are committed in this area, similar to those in NI (63 percent). We have already noted the importance CEOs attach to the upskilling of employees to meet business objectives.

However, when we asked respondents if their organisation was equipped to upskill their employees to fully leverage the benefits of generative AI, only a little over a quarter (27 percent) in ROI agreed, albeit that their NI counterparts felt better equipped at 40 percent. 

For Conor McCarthy, Head of People and Change at KPMG in Ireland, our CEO Outlook data reinforces the increasingly prevalent conundrum. Organisations are hiring, CEOs believe in the transformative power of technology, but there are deep uncertainties on how best to make the most of new tools while keeping the workforce motivated and committed.

According to McCarthy, “There has never been a better time to be in the people advisory world because some of the biggest challenges facing organisations right now are human challenges.”  

McCarthy says that the business case for adopting technology needs to be underpinned by hard metrics, and that the human side can often be obscured in vague sentiment or aspirational language that can fail to stand up to scrutiny. 

According to McCarthy, KPMG studies show “employees lack awareness of, or confidence in, their companies technology strategies. Despite the race to embrace AI for example, little more than half of respondents in one recent survey said their employer has adopted new technologies over the past three years.” McCarthy believes that this can be interpretation rather than reality and reinforces the value of communication and leadership role modelling of use cases in their BAU activities. The fact that we are endlessly asked about communications ‘suggests that many organisations are still struggling to get it right.”

The theory of the boardroom can collide with the office with often alarming, yet according to McCarthy, foreseeable consequences. He also cites recent KPMG research which shows that almost two in five workers feel that productivity improvements “are outweighed by the effect on their wellbeing and mental health. A fifth believe technology has in fact impaired their productivity.”

Reflecting on how easy it is to get it wrong when introducing new technology, McCarthy says that when employees threat responses are high, “it’s not surprising that they focus on defensive responses and this the very opposite of what organisations need. When consultation is neglected, it’s no surprise when the technology doesn’t deliver on expectations.”

When considering how best to move forward, McCarthy suggests letting your people, at all levels, be your primary source of ideas. “Pilot the technologies everyone can benefit from using, and test ideas through to business cases. This level of consultation bakes consultation in from the start and ultimately pushes adoption beyond the required tipping points.” 

Business leaders appear to be placing even greater value on accessing the best talent. We asked CEOs if they felt that chieving gender equality on their boards will help achieve growth ambitions. Whilst the global endorsement of this principle increased from 77 percent to 79 percent in the past 12 months, in ROI the jump was significant – up from two thirds (67 percent) to emphatic unanimity in 2024 at 100 percent.

Meanwhile the corresponding improvement in NI was a welcome increase from 83 percent to 90 percent. According to KPMG’s Conor McCarthy the sentiment is “welcome further shift not just on gender diversity but a recognition of its benefits, not least the broader perspectives that come with maximising the talent pool.” 

However, there is also a perceptible shift in our survey when it comes to scrutiny of diversity efforts. There was a notable year on year drop in CEOs on the island of Ireland who expect scrutiny of their diversity programmes to increase - in marked contrast to the international experience.

The shift in ROI is down to 37 percent in 2024 from 60 percent in 2023 in terms of those who expect increased scrutiny of diversity efforts. Meanwhile, in NI the figure drops from 70 percent to 43 percent in contrast to little change worldwide with a marginal decline year on year from 71 percent to 70 percent.

Ryan McCarthy of the Board Leadership Centre in Ireland welcomes the fact that our research shows that CEOs still see the obvious advantage in diversity in terms of company performance.

However, he says the race is far from run and he expects scrutiny to continue despite this year’s data. “The drop in anticipated scrutiny may be a function of some companies thinking that they have made a certain amount of progress which has had an impact.”

McCarthy sees first-hand evidence that Irish companies have taken diversity seriously. “We have come a long way, particularly in the last ten years, in terms of boardroom diversity from a gender, and to some extent, an ethnicity point-of-view.”

The progress is welcome, but he believes CEOs need to challenge themselves regarding a deeper layer to diversity that is increasingly being exposed at board level, diversity of thought.

“Do we have young people on boards? Do we have people from different educational backgrounds, different backgrounds in terms of skills, particularly around emerging areas of technology and innovation? Next time you talk about diversity, add diversity of thought to the agenda.”  

We asked respondents how they envision the working environment in three years’ time for corporate employees whose roles were traditionally based in-office. 83 percent of CEOs worldwide foresaw their teams in office compared with 90 percent in ROI and 80 percent in NI. The converse being that 13 percent of global CEOs predict hybrid models compared with 10 percent in ROI and 20 percent in NI.

Our CEO research shows that the return to office debate continues to give food for thought. Coverage regarding the future of work has highlighted issues such as the benefits of being in person in terms of building relationships, problem solving, career and skills development and the positives that come from workplace sociability.

The debate contrasts these considerations with an employee desire for continued flexibility and successful CEOs are those who have adapted well to this evolving workforce dynamic. The leaders who prosper are those who put people at the heart of their growth strategy and keep up with the evolving expectations of existing and future talent.

Seamus Hand, Managing Partner of KPMG in Ireland, says  “As the debate about hybrid working continues for CEOs, the sentiment shows that a growing number of business leaders believe that there will be a return to pre-pandemic ways of working within the next three years.”

Actions to consider
 

Make diverse teams for a diverse world your mantra. Recognise that diversity of thought is one of the hardest attributes to identify, yet in a fast paced, complex world it is increasing in importance.

Moreover, technology still requires leadership. With talent key to future success, make sure your approach to AI keeps people front and centre of your strategy.