Decoding Digital Strategy for Human Resources

Mercer PeoplePro Blog Digital Strategy

Digital Strategy for Human Resources

Decoding Digital Strategy for Human Resources, written by Ahalya Neela, Employee Comp Consultant Mercer

Organizations are grappling with the evolving nature of work given impact of digitization, automation, artificial intelligence, and the Internet of Things. Mercer’s 2017 Global Talent Trends study highlights the urgency that leaders feel to embark on digital transformation. Ninety-seven percent of leaders stated that becoming a digital organization is important, with only 8 percent describing their organizations as digital today. Most organizations consider themselves to be on the digital journey.

As part of that journey, a number of organizations have invested in platforms, created digital teams and/or introduced self-serve models. Does that mean “digital” is a fancy word for “information technology (IT)”? Not at all. An organization transforms digitally when it uses technology to significantly change its business model such as adding new revenue streams, products, and services. In the retail industry, as one example, organizations are investing in gaining customer insights to provide customized, intuitive, and on-demand experiences like mobile ordering via the Starbucks app. Digital transformation implies leveraging technologies to blend the virtual and physical world, inherently changing the way organizations go to market, interact with customers (and employees[1]) and drive internal processes. Digital transformation has led to new and evolved jobs in the fields of data analytics, web / mobile development, cybersecurity, user experience, digital marketing, and smart product development

The gap in current and future state is an opportunity for human resources (HR) functions to make critical contributions to a key business priority and refresh the organization’s people strategy.

  1. Understand the organization’s digital strategy. As the first step, it is important to understand the organization’s digital strategy. Many organizations have created a Chief Digital Officer (CDO) reporting directly into the CEO with responsibility for driving the digital strategy. HR needs to partner with the CDO and/or executive team to collaborate on strategy discussions and derive implications for talent. HR should bring a point of view about the future of jobs and show how it may affect future workforce requirements. Then, HR can help assess the talent bench for digital skillsets, surface ad-hoc projects / teams, bring in change management expertise, and push for digital maturity (i.e., an organizations ability to leverage technology to change its business model).

 

  1. Set accountability for digital strategy. There is consensus that digital cuts across the value chain from research to sales (i.e., it does not exist in a silo). However, for successful piloting and adoption, organizations often incubate digital organizations for one to two years before rolling out enterprise-wide changes. This incubation period will help manage internal resistance given disruption in current processes and approaches. From an organization structure perspective, digital roles typically report within Corporate Strategy, Product Management and/or Marketing (note that Digital is not IT and will be limited if positioned as such).

 

  1. Build an understanding of “digital jobs / competencies”. Most job sites show an influx of digital jobs such as Digital Marketing, Digital Product Management and Digital HR. However, it is not adequate to slap a digital label on existing job titles and talent. Let us take an example of a product manager and a digital product manager in an insurance organization. The former works with businesses to define a discrete insurance product, whereas the latter seeks to build an end-to-end customer experience. Though the underlying responsibilities (such as, customer understanding, product roadmap development and release rollouts) at a high level remain similar, there are differences in technical skillsets. The Digital Product Manager is focused more on connecting product with search engine optimization, user /app design, and strengthening the social community of users. This implies different roles and talent market.

 

  1. Develop a people strategy for digital talent. As a first step, HR will need to assess the current talent bench and compare it to future role/staffing needs. Though most organizations typically leverage a “build” approach to talent, there is a sense of urgency in ramping up, which may mean that organizations will have to buy or rent instead of build. Organizations are also partnering with digital companies (e.g., Mercer/PayScale) or “acqui-hiring” (i.e., acquiring digital companies for the purpose of mass hiring). For some roles (e.g., user experience) there could be opportunities to partner with schools with specialized programs to channel talent into the digital division.

 

It is also important to understand the supply and demand dynamics, which vary by industry. Given the fierce competition, HR will need to identify the best way to differentiate its organization. For example industries such as Manufacturing and Insurance may not be enticing enough to attract talent when employees have the opportunity to work with digital-first companies such as Google, Amazon, and Facebook. HR will need to reinforce and bolster the Employee Value Proposition (EVP) to highlight purpose (e.g., working to improve healthcare outcomes), opportunities, and digital maturity.

Lastly as the future of work is coming into sharper focus, HR will need to partner with business to identify which talent pools may be malleable to develop into digital roles (e.g., re skill/up skill software developers to focus on mobile development), knowing that this approach may take some time.

In the long-term, digital will be embedded (and implied) within the organization and talent DNA –at least in the organizations that succeed in the future. To ensure that organizations are ready and leading this change, HR will need to proactively question, assess, and build the digital talent strategy.

[1] Note: This article does not address “Digitizing HR”

 

Mercer PeoplePro Blog Digital Strategy Ahalya Neela

Ahalya Neela, Employee Comp Consultant Mercer

 

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