The Journey to Digitization: The Executive View

The Journey to Digitization: The Executive View

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The Journey to Digitization: The Executive View
Want to Be a Better Manager? Stop Trying to Motivate Your Employees
Calendar30 August 2017

Investment in human capital management technology continues to grow, with software, most often in the Cloud, addressing the issues of ease of use and mobile access. Market research firm IDC predicts that spending on Human Capital Management (HCM) and payroll software combined will reach $23 billion by 2020, seeing a steady year-over-year growth in investment in software to both manage and reward employees. Rather than a “nice to have,” an HCM investment is now a business imperative.

Corporate executives globally recognize the importance of technology to the future of their businesses. With aging legacy systems, they face a new world of smarter, faster, and better choices ranging from thinking machines, predictive solutions, robotics, virtual reality, blockchain, voice-activated smart support, and more. They also face the burden of better securing their digital assets as hackers become more brazen and sophisticated. 

But few executives consider themselves a true “digital organization” today.

Mercer recently surveyed C-suite executives globally as part of its 2017 Global Talent Trends research. The majority of executives (61%) see technologies in the workplace as the single workforce-related trend likely to have the most impact on their organization over the next few years. The technologies they see as impactful include robotics, wearables, and AI—those imbued with “machine thinking.”

Despite the ubiquity of technology both in business and for consumers, executives often say they are lagging in this key area of commercial competitiveness. They rank their external digital presence ahead of their technology for internal operations—but just slightly. Only 8% consider themselves a digital organization in how they conduct their business externally today. The majority (97%) of global executives perceives the necessity of technology in their employees’ experience at work, yet just 7% see their internal HR organizations as capable of shaping a digital experience for their employees.

In this global study, German companies stood out for recognizing the importance of technology for their future at almost twice the rate of their peers worldwide. More companies in Asia deemed themselves a digital organization today (18%) than the global average of just 8%.

The readiness for the journey to digital varies by location. Of all the countries studied, HR professionals in UK companies see themselves as least prepared to use technology to collaborate. HR members in Australia and Japan report the least digital support for employee interaction with HR, unlike Canadian HR organizations, which report that nearly everything related to HR-employee relations is available digitally. While only 10% of executives strongly agree that their HR organizations provide a digital experience for their employees, close to one-quarter of Asian executives strongly agreed this was provided. Among US responding executives, 39% said that the digital HR experience provided to employees is “consumer-grade.” On another note, technical talent to support corporate transformational initiatives is viewed as an over-supply in India and severely under-supplied in China. 

The results of the digital effort are impressive. Mercer research of high vs. low performing HR organizations demonstrates the value from an investment in an optimal mix of HCM technologies both to procure key metrics for driving strategic decision support and delivering consumer-level HR experiences for managers and employees. These high-performing HR organizations realize significant results through analytics and technology when compared to their lower-performing peers.

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