A new study finds HR departments are significantly behind other functional departments when it comes to digital transformation. This functional gap within organizations, across industries and geographies, is creating major barriers to enterprise-wide digital transformation.
That’s according to a new report titled Leading Transformation: Shaping the C-Suite for Business 4.0 Innovation by the Association of Executive Search and Leadership Consultants. It’s based on a survey of more than 600 executive recruiters and leadership advisors from leading executive search firms. The results of the survey reveal that departmental silos within organizations, especially in HR, continue to create major barriers to enterprise-wide digital transformation.
The survey respondents, all executive-search and leadership consultants who advise organizations of all sizes and across industries, ranked the HR and legal departments the least advanced in their digital transformations, while marketing and technology departments were ranked the most digitally advanced within organizations. The findings do not vary significantly by geographic region, with HR and legal teams ranking at the bottom across all major geographies.
The survey also revealed the top-five obstacles preventing organizations from achieving enterprise-wide digital transformation, including:
- Legacy approaches
- Lack of talent
- Lack of investment
- Resistance to change
- Lack of clear definition
Karen B. Greenbaum, AESC’s president and CEO, says the study highlights the need for all of the C-suite roles to play a role in driving digital transformation, adding that the HR function has a dual challenge in terms of digital transformation: how to use technology to drive operational efficiency and, more importantly, how to create a talent strategy for an organization that is transforming its core business model because of emerging technologies.
“This new talent strategy is essential to attract and retaining the right talent,” she says, “talent that is in high demand. CHROs are moving toward the new role of chief people officer and have a leadership responsibility to assess the organization’s ‘internal brand strategy’ to see if it is relevant in a changing business environment.”
Not only must the brand be authentic, she says, but it must serve to attract and retain the next generation of talent, understand the changing needs and priorities of this digitally savvy younger generation of leaders.
“Global research has identified attracting and retaining top talent as the No. 1 business issue for CEOs,” Greenbaum says, “and HR leaders who have ‘a seat at the table’ and are respected for their ability to build the right talent strategy can be the key to successful digital transformation.”