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A leader’s guide to tech-powered people management

Leading Off

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Leading Off

Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

The future of work is being shaped by a number of disruptions, from new technologies and hybrid working models to generational shifts in the workforce and geopolitical risks. As leaders think about how these forces may affect their employees’ roles and productivity, it’s important to consider how their approaches to managing people will also need to change. What role will human-centered leadership play in a more tech-powered work environment? This week, we look at a new operating model for people management that reflects a growing focus on employee engagement and development, the fluid allocation of skills, and “humanness” in the workplace.

An image linking to the web page “A new operating model for people management: More personal, more tech, more human” on McKinsey.com.

AI and other emerging technologies can enable organizations to automate more functions across their workforce—and, in turn, help make their employees more satisfied and productive. McKinsey Partners Asmus Komm, Fernanda Mayol, Sandra Durth, and their coauthors say that now is the time for companies to embrace a tech-enabled approach to people management that delivers more personalized employee experiences and enables organizations to be more proactive, data-driven, and fluid in matching skills to tasks. “Furthermore,” the authors note, “automation through these new technologies should free up managers’ time so they can provide more of a ‘human touch’ when interacting with employees—that is, more individualized attention as well as guidance and coaching.” Technology also can transform the people function itself, empowering HR teams to focus on more strategic work tied to business needs as many of their current tasks become automated.

An image linking to the web page “Why being in HR is getting tougher—and how to break through” on McKinsey.com.

With so much change in the workplace in recent years—including the transition to remote work during the pandemic, followed by the “Great Resignation”—times have been tough for HR teams. “The HR function lives in the friction between caring for the employee and caring for the organization,” Wendy Miller, a McKinsey partner and chief people officer for North America, says on an episode of the McKinsey Talks Talent podcast. She explains that during volatile times, the tension between those two responsibilities grows and puts more stress on HR teams. Two other McKinsey talent experts, Senior Partner Brooke Weddle and Partner Bryan Hancock, also observe that companies need to build more trust in HR across the business—in both day-to-day activities and senior-level strategic matters.

An image linking to the web page “The human side of generative AI: Creating a path to productivity” on McKinsey.com.

Some tech leaders worry that employees will become too reliant on AI and lose other vital skills, such as empathy and deep thinking. But McKinsey research shows that the workplace’s regular AI users actually want to become more human. McKinsey’s Aaron De Smet, Bryan Hancock, Sandra Durth, and their coauthors report that heavy gen AI users “overwhelmingly feel they need higher-level cognitive and social-emotional skills to do their jobs, more than they need to build technological skills.” Their survey of nearly 13,000 employees in Canada, the United Kingdom, and the United States also reveals that 88 percent of workers who frequently use AI are in nontechnical roles, including middle managers, healthcare workers, educators, and administrators. The desire among both technical and nontechnical respondents to build stronger cognitive skills is an important consideration for employers trying to attract and engage talent. “Organizations are on the cusp of gen AI pushing either positive or negative change when it comes to the nature of work,” the authors say. “Leaders have an opportunity to humanize that work by deciding where, when, and how their teams use gen AI so that people are freed up from routine tasks to do more creative, collaborative, and innovative thinking.”

Lead by fostering both tech and human skills.

— Edited by Eric Quiñones, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:16 - 5 May 2025