KPMG names five trends reshaping the HR function

KPMG has published a new report identifying five trends it says are reshaping the HR function and forcing organisations to rethink how they design work, talent and governance.

Published in June 2026, the firm’s 40-plus‑page “HR at Full Velocity” report lays out a compact agenda for HR leaders, arguing that rapid AI adoption, skills‑led workforce strategies, employee experience redesign, operating model transformation and strengthened governance are converging to change the function’s priorities and structure.

KPMG says the first of its five trends is the growing embedding of AI across core people processes — from recruitment screening and learning personalisation to workforce planning — and that HR teams are moving from pilot projects to production deployments. The report highlights a shift in where value is expected to come from: not just efficiency gains but faster skills matching and smarter workload distribution.

The second trend spotlights a skills‑first approach to talent management. KPMG argues organisations are accelerating investments in reskilling, internal mobility and skills taxonomies to keep pace with role changes, rather than relying solely on external hiring. The firm warns that legacy job‑based operating models are a poor fit for a market where discrete skills drive business outcomes.

Third, the report places employee experience and hybrid work design at the centre of retention and productivity strategies. KPMG links renewed emphasis on manager capability, frontline wellbeing and tailored career pathways to rising competition for talent and shifting expectations about work location and hours.

Fourth is an operating‑model rethink. The consultancy says HR functions are consolidating shared services, decentralising specialist people teams and applying product management techniques to HR offerings. That combination, KPMG suggests, is intended to speed delivery while keeping capability close to business units.

Finally, the firm highlights governance, risk and ethics as core to the HR agenda. KPMG calls for clearer oversight of people data, stronger controls around algorithmic decision‑making, and an elevated role for HR in managing regulatory and reputational risks linked to automation and bias.

The report’s findings reflect wider market pressures. Regulators across the UK and EU have signalled tougher scrutiny of automated decision‑making and employee data uses, while recruiters and vendors are racing to embed machine learning into talent systems. At the same time, skills shortages and rising turnover have pushed employers to experiment with new internal mobility and reskilling models.

KPMG frames the trends as practical choices for HR leaders rather than abstract imperatives, recommending a mix of capability investment, clearer ownership of people data, and faster rollout of standardised tools. The firm points to case examples and diagnostic frameworks in the report to help chief people officers prioritise activity.

What KPMG does not disclose in the public report is a full set of metrics or independent audits validating the outcomes it cites. The document does not name customers behind the case examples, offer detailed cost estimates for model redesign, or publish third‑party bias‑audit results for the kinds of AI deployments it describes. That leaves questions for HR teams about how to benchmark progress and demonstrate regulatory compliance when moving from pilots to live systems.

For HR leaders the report’s prescription is both tactical and strategic: build skills and data governance in parallel, reconfigure operating models to deliver faster, and treat ethical controls as a business imperative. As organisations scale people analytics and automation, the practical test will be whether HR can couple technology adoption with measurable safeguards that satisfy regulators, the workforce and the board.