Are Small And Midsize Businesses Ready For A Digital Workforce?

Jenny Dearborn

Part 9 of the “Leading Through Digital Transformation” series

The level of digitization available for today’s workforce is astonishing. Anything that can be automated is automated. Insights from newly captured data and analytics tools are helping companies outperform their competition. Intelligent processes are feeding an endless cycle of improvement and feedback. And companies now have the power to identify opportunities, analyze trade-offs, and adapt in real time.

Despite these advantages and their growing influence in most national economies throughout the world, small and midsize businesses (SMBs) are trailing behind larger enterprises in adopting the ways of a digital workforce. Oxford Economics’ recently released report “Leaders 2020: The Next-Generation Executive – Leadership Matters for SMBs,” revealed that SMBs are more likely to cite shortages of skilled talent, including those who are digitally proficient, as having a significant impact on their company (21% of SMBs versus 14% of all survey respondents).

Small and midsize businesses are only as successful as the talent they attract. In response to growing workforce demands and increasing business challenges, HR executives are turning to digital technology to manage services, streamline processes, and attract the talent they need.

Emphasizing leadership: Transformation readiness

Companies that are successfully achieving their digital vision have four things in common: unwavering executive support, established trust, alignment, and leadership. If a digital journey does not begin with these four indicators of digital readiness solidly in place, the digital strategy will likely fail.

According to Oxford Economics research, for businesses with 101-1000 employees, employees and executives both indicated that senior leadership is more ready for digital transformation than their midlevel counterparts.

Executive Responses Employee Responses
How proficient are your organization’s midlevel managers in digital transformation readiness? 28% cite highly proficient 34% cite highly proficient
How proficient is your organization’s senior leadership in digital transformation readiness? 52% cite highly proficient 52% cite highly proficient

As shown in this data, it appears that some people are on board while a large percentage still is not. Until the entire workforce is ready for digitization, leadership will inevitably burn bridges of trust if it decides to move forward with its digital strategy. And worse, the credibility of the digital concept is damaged irreparably – making it difficult to revisit the initiative in the future.

Not only is digital maturity a talent lure, but it is the basis of a solid digital transformation strategy. When senior leadership and midlevel managers are knowledgeable about the advantages of digital technology that’s available, they can determine how to best invest, execute, and deliver digital transformation. And by exhibiting this sense of confidence from the top of the organization chart, leaders and managers give the entire workforce a reason to adapt and promote the digital agenda. 

Improving digital proficiency among employees

Similar to the leadership team, the workforce must reach a level of digital comfort and savvy to make the best use of technology and data. Don’t get me wrong: Companies shouldn’t fire and rehire their way through digital transformation. Rather, they should show employees how some of the most manual, labor-intensive, time-consuming, and cost-prohibitive activities can be automated to make their lives easier.

The Oxford Economics survey shows that employees need more support and training to bring them up to the level of digital proficiency that is needed to compete in today’s ever-evolving, fast-paced marketplace.

Up-to-date technology is widely available to all employees Strongly agree = 10%

Agree = 31%

Training on technology is widely available to all employees Strongly agree = 9%

Agree = 41%

My organization leverages the appropriate technologies to drive performance and meet goals Strongly agree = 17%

Agree = 39%

We have processes in place to effectively manage the introduction of new technology Strongly agree = 16%

Agree = 42%

Employees at my organization are equipped with the skills necessary to keep up with new technology Strongly agree = 10%

Agree = 38%

A critical part of any digital strategy is not just communicating the strategy and skills to the workforce, but providing the information in a way that is fun, innovative, and engaging. By establishing a workplace culture of learning, the entire workforce – from the business owner/CEO to the warehouse worker – engages in a two-way covenant of continuous professional development. Once the workforce accepts learning as the norm, the ability to embrace change follows close behind. 

Architecting a digital workforce

Through increased digitization, companies are uncovering opportunities and insights at a record pace. SMBs that continue to resist adopting a digital mindset will have limited insight into emerging talent opportunities, skill gaps that are threatening competitiveness, and potential operational improvements.

However, before any technology is purchased and implemented, firms should come to terms with the changing nature of work, the future of how work will get done, and automation as a digital approach that is in their best interest. While shifting leadership and workforce mindset is possibly the hardest step of a digital journey, the success of the overarching digital strategy depends on it. 

To learn how your business can better prepare for the digital economy, check out Oxford Economics’ recent report “Leaders 2020: The Next-Generation Executive – Leadership Matters for SMBs.” Be sure to check every Wednesday for new installments to our blog series “Leading Through Digital Transformation,” to explore the various leadership roles in today’s growing small and midsize companies.