The key to digital transformation: a parallel reinvention of the workforce
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The key to digital transformation: a parallel reinvention of the workforce

Rae Ritchie and Kenny MacIver — January 2020

Digital transformation is high on the agenda of almost every organization. But new research suggests that successful outcomes are linked to an equally profound shift in the workforce.

Expectations surrounding digital transformation are running high across all industries; but so are disappointments, with as many as a third of companies reporting wasted investments. However, a new survey by the Economist Intelligence Unit suggests that organizations can dramatically enhance their chances of success by engaging in a parallel transformation of the workforce.

The research, sponsored by global technology partners Fujitsu and Citrix, shows that organizations that remodel, re-equip and reskill their workforces are more likely to succeed at digital transformation.
The interdependence of digital and workforce transformationThree-quarters of the 200 senior executives questioned across North America, Europe, Oceania and Japan agreed that the objectives for both their digital and workforce transformations were intertwined.

As Andrew Davis, head of Strategy and Growth for Future Workplace at Fujitsu, observes, “One of the strongest findings from the Economic Intelligence Unit study is that three in four firms agreed or strongly agreed that workforce and technology transformation share common objectives — as employers look for increased digital and high-value skills.

“When you take into account the additional training and better technology that employers and  employees benefit from, post workforce transformation, there are compelling reasons for workforce transformation both for an employer and an employee.

However, for organizations that had already undertaken extensive transformation of their work environments, a remarkable 92% said the same goals underpinned both workforce and technology transformation initiatives.

Moreover, among those who had “significantly exceeded” their strategic transformation objectives, 87% recognized the connection, indicating an intrinsic relationship between workforce and digital transformation success.



A geographical breakdown underscores the trend further, with North America leading the way. While 38% of all respondents said their organization had undertaken extensive transformation of their workforce in the past three years, among respondents in North America 68% talked of taking transformation to that level.

And that showed among those who strongly believed in the interdependence between the workforce and digital transformation efforts: 54% of North American respondents were convinced of the link compared with 30% within the global group.
The challenges to transformationDespite that broad consensus, the report – which was the focus of a recent Economist Intelligence Unit webinar — recognizes that successful workforce transformation is not without significant investment challenges. Those surveyed cited a range of increased costs that included one-off project expenses, reskilling costs and salary inflation.

Respondents also reported a rise in staff turnover, the need to overcome a lack of engagement in new processes and the difficulty of attracting employees with the required new capabilities. Donna Kimmel, EVP and Chief People Officer of Citrix, states: “Those that have not implemented workforce transformation are going to find it increasingly harder to attract and retain the right caliber workforce — needed for the business challenges they face in today's market.” 



But the challenges were not just around costs. Respondents also offered valuable insights into the most common operational barriers to workforce transformation. Thirty-eight percent mentioned resistance to change among employees, and around one in three cited a weak business case, legal hurdles, a lack of leadership/engagement among senior executives and absence of data to inform decisions.

Similar numbers reflect a lack of understanding of what an ideal workforce would look like.



Overcoming the challengesEncouragingly, there are clear pointers as to how organizations are overcoming such challenges and barriers.

More than 80% of those surveyed highlighted the necessity to invest more in workplace technologies. Among survey participants, 38% stated that the shift has required extensive modernization of their company’s technology infrastructure. As the report observes: “The more successful organizations have been at transforming their workforce, the more likely it is that they’ve upgraded their infrastructure significantly.

Of 14 tactics cited by organizations to transform their workforce in the past three years, investment in technology is top, with 45% of survey participants reporting a significant increase and a further 38% reporting a moderate increase.

More than three-quarters of the respondents also mentioned investment in workforce digital skills and an increase in the cost of salaries.   



Who’s leading the changes?Another key finding from the report is that senior business leaders have a significant role to play in ensuring successful workforce transformation.

When asked which, if any, C-suite executive led their workforce transformation initiative, 29% of respondents pointed to their CEO, while 25% said their technology head and HR chiefs at 19%. In Europe and North America, as well as in larger organizations, the CIO is more likely to lead — “further highlighting,” notes the report’s Executive Summary, “the intertwining of workforce and technology transformation.”




As all of these findings demonstrate, there is considerable overlap between digital transformation and workforce transformation. Furthermore, organizations need the former to achieve the latter, with digital transformation providing one of the primary routes to workforce transformation.

Download the survey report Work in progress: aligning workforce transformation to business strategy.

Watch the webinar: To gain further insight into workforce transformation strategy, watch the Economist Intelligence Unit webinar here.

First published January 2020
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