HR Faces a Growing Digital-Skills Talent Gap

The growing impact of digital transformation on talent is undeniable, so HR executives need to start planning a strategy for closing the impending digital skills gap, according to new research from The Hackett Group.

In fact, The Hackett Group reports that dramatic changes in the nature of work as a result of rapid maturing and adoption of “smart automation” technologies actually are imminent. And that means HR and other executives must be prepared to manage the significant implications for talent or risk losing some of the potential value of increasingly digital operations–up to $82 million for world-class organizations, Hackett reports.

The Hackett Group’s 2019 Key Issues Study found that 85% of business services executives–finance, HR, information technology, procurement and global business services–surveyed said that digital transformation strategies are “high” or “critical” priorities this year alone.

Tony DiRomualdo, senior research director and co-author of the Hackett study, explains that digital transformation has had a profound influence on enterprise priorities. In order to reap the significant performance improvement benefits of digital transformation, he adds, HR functions will need to transform their workforce into with skills in several areas, including data and technology savvy, social media, creativity and innovation, and change orientation, among others.

DiRomualdo notes that, in the face of a significant global talent crunch, organizations cannot rely primarily on acquiring these new skills. Instead, employers must also invest in re-skilling existing staff, equipping them to handle new responsibilities such as working in agile ways, programming robots and managing a virtual workforce, integrating and analyzing data, and measuring and improving processes.

And while talent is a top functional priority, it is also a major concern for business services leaders. In the annual study, 39% of executives ranked access to critical talent as a “high risk” to digital transformation. Furthermore, talent is projected to be the fastest growing risk factor over the next one to two years.

The Hackett Group reports that business services leaders believe the increased focus on digital transformation, data and analytics, customer-centricity, innovation and other enterprise priorities will have increasingly significant workforce implications. Across all functions, 56% of executives polled agreed that digital transformation has a “high” or “very high” impact on the overall talent and leadership needs of the business today. Even more, 81%, expect that will be the case within two to three years, as workforces adjust to increasingly digital operations.

“The most striking finding from our research is how broadly the HR skills profile is shifting due to digital transformation and the resulting gap between the skills HR staff have today and what is required going forward,” DiRomualdo says, adding that there are several dimensions to this change. He says that this transition will require unprecedented levels of re-skilling and upskilling of 54% of employees by 2022, and that means a rapidly growing need for digital skills such as analytics and modeling, technology savviness and service design.

“These were not really on the radar screen even a few years ago,” he says, “and now they represent some of the most sought-after new skills of HR.”

DiRomualdo explains that accentuating this trend is the growth in demand for business skills such as the ability to interpret data that’s been produced via sophisticated analytics and models, as well as communicate the implications for decision making–and some behavioral competencies, including agility and change orientation, and creativity and innovation.

“We are seeing strong evidence of a dramatic change in not only the skills profile, he says, “but the behavioral one as well.”

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Tom Starner
Tom Starner is a freelance writer based in Philadelphia who has been covering the human resource space and all of its component processes for over two decades. He can be reached at [email protected].