Charted: Talent Drives Digital Success

Karie Willyerd , Steven Hunt and Michael S. Goldberg

Any discussion about the impact of digital transformation on the workplace elicits worries about job loss due to investments in new technology. But a new SAP Center for Business Insight study conducted with Oxford Economics finds that successful digital transformation depends on people. Workforce investments are becoming central to driving both revenues and profits from digital business.

say investing in digital skills and technology is most important to driving revenue

The global survey of over 3,100 business decision makers reveals that a lack of workforce skills is the top challenge to companies’ digital transformation initiatives. Among digital leaders (companies that have completed transformation projects that cut across the enterprise rather than projects limited to a single business area), 48% say investing in digital skills and technology is most important to driving revenue, compared to 30% of other respondents. Among all companies, two-thirds report that their investments in digital technology will lead to a need to retrain the workforce.

All Hands on Deck

Respondents in most industries report that they are as concerned about retraining managers as they are about retraining the general workforce. In some industries, one group is more likely to be a priority due to the nature and the pace of the disruptions they are facing.

The survey shows, for example, that in industries that face disruption from many angles, such as retail and healthcare, companies are somewhat more likely to invest in retraining the general workforce than in retraining managers. Meanwhile, professional services companies, where project leaders oversee client engagements, are more likely than any other industry to invest in retraining managers.

Skills for the Future

It’s no wonder that companies see the urgency in retraining their people. Consider the retail executive responding to increased competition from digital channels: not just mobile and online but also augmented reality. She must ensure that her digital storefront delights visitors and that it seamlessly merges all the steps in the purchasing process, from the buying decision to the point of sale and delivery systems. She needs to update physical spaces to make the shopping experience easy and enjoyable. And she needs to invest in training for a multigenerational workforce that has to execute all of the above. The executive may be a member of the Millennial generation herself; these rising professionals, whose oldest members are in their 30s, are reaching positions of responsibility and pressing their colleagues to accelerate their enterprise digital transformation efforts—now.

As part of its eight-year transformation program begun in 2012, AT&T’s Workplace 2020 initiative offers online training and tuition subsidies for workers who want to be ready for future changes to their jobs—changes that top executives warn are coming for everyone. Long-established firms and disrupters alike, including Mercedes-Benz, Pitney Bowes, Google, and PayPal—train their workforce in using data and other digital skills.

The bottom line: To succeed as a digital company, you must have a strategy for ensuring that your people—and therefore your enterprise—remain current with skills that matter in an increasingly digital marketplace.

To that end, the SAP Center for Business Insight study also finds that leading firms understand that digital transformation alters their approach to HR. Among the leaders, 83% say they expect digitalization efforts to change talent management in their organization, compared with 37% of other respondents. Digitalizing human capital management processes provides companies with more effective tools to find candidates, engage employees, learn about their interests and capabilities, and promote and enable employee learning and development.

of executives say their digital transformation efforts had improved engagement

Investments in people pay off in workforce engagement. Among leading companies, 64% of executives say their digital transformation efforts had improved engagement, compared to 20% of other respondents. And among all respondents, 54% see their companies’ digital transformation efforts help them find and keep good people.

Respondents at the top firms were even more bullish: 71% say they saw transformation programs as helping recruiting and retention. These are the executives whose companies are championing the changes in their workplaces—and supporting their managers and frontline workers along the way. The quality of that support is likely to determine how their people perform. But the fact that so many business leaders are committed to the human element of digital change sends a positive signal that they are focused on the right things: on the transformations they need to make and the people who will have to make them work.

It Really Is All About People

48%

of the top 100 leaders say that investing in digital skills and technology is most important for driving revenue in the next two years, compared with only 30% of others.

71%

of the leaders say that digital transformation efforts make it easier to attract and retain talent, compared with 54% of others.


5x

more leaders than others report that digitalization has already changed their talent management efforts.

83%

of leaders expect talent management in their organization to be changed by digitalization in the next two years, compared with 37% of others.


64%

of leaders say that their employees are more engaged, compared to 20% of other respondents.


Source: SAP Center for Business Insight

 


Karie Willyerd

About Karie Willyerd

Karie Willyerd is the Workplace Futurist at SAP. She is a learning executive, speaker, author, blogger, researcher and advisor on the topics of excellence in workplace learning, social collaboration, employee engagement and the future workplace.

Steven Hunt

About Steven Hunt

Steven Hunt is the Senior Vice President of Customer Value at SAP. He is responsible for guiding the strategy and deployment of knowledge, tools and process improvements that increase the value customers receive from SuccessFactors & SAP Cloud software as a service solutions.

Michael S. Goldberg

About Michael S. Goldberg

Michael S. Goldberg is an independent writer and editor focusing on management and technology issues.