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Just as digital has allowed marketing and ecommerce teams to become more customer centric, digital is also helping HR departments to become more employee centric.

Econsultancy invited 12 senior HR and Learning & Development professionals to our London office to discuss what Digital Transformation means to them.

We wanted to find out how the industry is measuring and improving digital skills and what impact is digital having on organisational structures and procedures? Here’s what we learned.

Recruiting staff with the right mix of digital skills is difficult

While this might not be a new problem, it would seem that this issue is particularly pronounced for companies that aren’t based in or near large urban centres.

As the requirement to capture and make use of data continues to grow, so too does the need to develop the right infrastructure and talent. According to our Quarterly Digital Intelligence Briefing: 2016 Digital Trends, published in association with Adobe, only 37% of respondents indicated that they have the analysts they need to make sense of their data.

Companies are responding to the challenge in a number of ways:

Hire for behaviour and attitude, not qualifications

There was some discussion about hiring graduates, whose expectations may be too high both in terms of what they wish to earn and how quickly they expect to progress.

Because it can be difficult to attract these graduates, some companies are hiring people for behaviour and attitude and equipping them with the right skills through training.

Developing apprenticeships and school leaver programmes

Several participants noted that this approach was effective as more and more young people are developing technology skills either at school or independently.

Companies that based far from large urban centres are finding it hard to recruit digital skills.

old street

If recruiting is an issue, retention is just as challenging

Several participants spoke of what they called the “18 month itch”. So called “millennials”, particularly those working in technology and marketing related roles, may choose to move on after 18 months.

This was particularly prominent in cases where companies are using new technology tools that require training to use them effectively. Once staff become experts at using new and complex technologies, they can become more attractive to other employers so can earn more lucrative salaries elsewhere. This raises a number of issues for HR professionals:

Should companies try to retain 'itchy' staff?

Or, should companies develop a pipeline of talent to allow staff in other departments the opportunity to upskill and move laterally within the company?

Several attendees said that their companies are actively developing procedures to identify staff who traditionally worked in more traditional junior operational roles and giving them the opportunity to upskill into new roles. 

How should companies manage the leaving process?

One HR Manager in attendance said that companies should develop a “positive leaving strategy”. This just means parting ways in the best way possible. The HR Manager that suggested this noted that her company runs “alumni drinks” twice per year. This is useful for a number of reasons:

  • Staff may move to potential clients. Maintaining a positive relationship with an ex member of staff can be useful for strengthening client relationships and in some cases new client acquisition.
  • A positive leaving strategy can leave the door open to staff coming back to the company in the future when they have acquired new skills. Admittedly, there were different points of view among attendees regarding whether this should be encouraged or not.

The 'itch' is felt quicker than ever.

seven year itch

Addressing digital literacy remains an issue

When it comes to digital maturity, addressing digital skills, from the most junior employee right up to senior management remains an issue.

According to our recent research into organisational structures and digital leadership titled Effective Leadership in the Digital Age, more than a third (40%) of businesses believe that recruiting staff with suitable skills is a significant barrier to digital progress, making it a bigger problem than 'legacy systems and processes' (35%).

This is where things got tricky. Having moderated a number of roundtables on different digital topics, I have come to observe that these sessions can often raise more questions than they answer. One such question was whether digital skills should be a requirement for every position or whether digital skills should be centralised?

While digital literacy is recognised as an issue that needs to be addressed, HR Managers are unclear of what digital literacy is, how to teach it and of course how to measure it. With that in mind, there was some discussion about measuring employee performance.

Attendees did agree that what we traditionally call “appraisals” should be reframed. The following insights represent a summary of the different ideas and approaches that were discussed with regard to appraisals:

People first

Attendees noted that while there is a plethora of technologies available for managing and administering reviews, it is important to put people and not technology first.

Process driven

Performance reviews should be considered as a process and not an event that takes place once or twice per year. One HR Manager pointed out that there should never be any surprises at an appraisal.

Two way

In fact, one company now calls appraisals “quality conversations”. Appraisals should be approached as a two way conversation rather than one way feedback from a manager to an employee.

digital skills a challenge

Legacy systems and functional silos

Finally, I wondered if we’d hear the words “legacy system” and “silo” and sure enough they popped up. There was discussion among the HR Managers present that the word “digital” too often seems to be considered part of “marketing”.

One attendee noted that for organisatons to get to grips with digital, they need to develop a “digital family” by joining up IT, Marketing and HR.

At Econsultancy, we are certainly of the view that a digitally mature organisation will have digital integrated throughout the company. This is represented in our five stage model of digital maturity in our Digital Marketing: Organisational Structures and Resourcing Best Practice Guide which is outlines the following evolutionary path:

Dispersed structure

To begin with digital expertise is normally spread thinly across the organisation.

This digital expertise develops organically as employees with digital skills start to make the case for digital. These employees may sit within different departments and so may only have influence within their own team or department.

Digital centre of excellence

As digital skills mature, many organisations centralise them into what we called a centre of excellence. This centre of excellence is responsible for driving the digital agenda throughout the company. 

Hub and spoke

The next stage in this evolution is what we call “hub and spoke”. At this stage, there is still a central digital hub but digital starts to mature throughout the organisation.

This is effectively a combination of centralised and decentralised capability / resourcing / expertise whereby some key functions or capability remain centralised but local functions (think HR) or divisions can develop their own capability that links to the centre.

Multiple hub and spoke

This moves to a multiple hub and spoke model as digital gets adopted across multiple divisions or business units. Organisations that pass through this stage may have a number of divisions with discrete audiences for example and so while there may still be a central digital hub, each division may also have their own hubs.

Fully integraged 'honeycomb' structure

The final stage in this model is where digital and digital skills become fully integrated within the fabric of the company. A company at this stage within the model could reasonably be expected to have both the analysts and technology to be able to surface usable insights both from customers and also staff.

We’ve already mentioned that only 37% of companies have the analysts to make sense of their data. Based on the same research, only 41% of companies report that they have good infrastructure to collect the data that they need.

If digital is to be used for operational efficiency by HR, then clearly the term “digital” needs to be understood more broadly than as something led by marketing. For that reason, when we discuss digital transformation, we are thinking about something that encompasses the entire organisation, not simply the marketing department.

Leading the charge

Many organisations need to start somewhere and so perhaps it makes sense that until recently digital transformation has been led by either the CTO, CMO and in some cases the CDO. Is there scope for HR professionals to lead the charge? Certainly they have a key contribution to make.

Digital transformation after all needs to be successfully accompanied by cultural transformation.

I suspect that we will conduct further research into digital from the perspective of HR professionals. In the meantime, readers might be interested in our report “Effective Leadership in the Digital Age, Skills and Capabilities of Successful Digital Transformation Leaders”.Digital Transformation

Digital is changing faster and more profoundly than anyone could have predicted. Doing what you've always done is no longer an option.

----

How can Econsultancy help?

The specialist digital transformation practice within Econsultancy helps companies accelerate their journeys to digital excellence. We address the four vectors of change:

  • Your strategy - where should you be going with digital?
  • Your people - what teams, talent and skills do you need to get there?
  • Your processes - how should you change the way you work?
  • Your technologies - what platforms, software and data strategy will serve you best?

Talk to us about an initial, no-cost consultation. We’ll discuss your toughest challenges, outline our methodology and come back with a proposal.

Contact our Digital Transformation Team on transformation@econsultancy.com or call

  • EMEA: +44 (0)20 7269 1450
  • Americas: +1 212 971 0630
  • APAC: +65 6653 1911

 

Seán Donnelly

Published 22 March, 2016 by Seán Donnelly @ Econsultancy

Seán Donnelly is a Senior Research Analyst at Econsultancy. Connect via Twitter or LinkedIn.

9 more posts from this author

Comments (6)

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Gerrie Smits

Gerrie Smits, Digital Strategy Consultant at Ripple

Seán, thanks for this. Very useful.

One question: how do you or your HR-network describe 'digital literacy'? Is it tech-focused? Or does it include softer skills like empathy, ability to deal with change,...?

My reasoning: if we want to move away from 'Digital Strategy' towards 'Strategy for a Digital World', then we should also take into account the fundamental effects that digital has (user-centricity, agility, data-driven,...). And I'm just wondering if that's included in this definition of 'digital literacy'?

9 months ago

Ollie Capel

Ollie Capel, Digital Campaign Manager at Eduserv

Very interesting article. Digital thinking needs to be all pervasive, and above all requires sponsorship and support from leadership.

One of the other major findings in our recent Charity Business Transformation report is that this can be solved by getting HR involved with digital, so that technology and organisational/culture change always go hand in hand. You can read the full report here: http://www.eduserv.org.uk/insight/reports/Business-Transformation-and-the-role-of-Heads-of-Digital

9 months ago

Seán Donnelly

Seán Donnelly, Senior Research Analyst at Econsultancy, Centaur MarketingStaff

Gerrie and Ollie. Thanks for your comments. Ollie, thanks for sharing this report. I'll make sure I read this over the next week.

Gerrie, there's quite a lot in your question and so I've had to reflect on this for a few days!
Question one: how do you or your HR-network describe 'digital literacy'? Is it tech-focused? Or does it include softer skills like empathy, ability to deal with change,...?

As I thought about this question, the more I realised that an appropriate answer could expand into a full report. I am not in a position to speak for the HR professionals who attended our roundtable but I can report that digital literacy is something that we spend a lot of time spinning our brains thinking about here at Econsultancy. It is also a particular interest of mine and is something that I have done a lot of reading on in recent years.
From an organisational point of view, employees these days need to be digitally literate in order to make use of the range of communication tools and technologies that are used day to day. This extends across all functional areas within an organisation and beyond our traditional area of expertise, marketing.

In thinking about digital literacy, I decided to go back to basics and consider the definition of literacy: “Literacy is a characteristic acquired by individuals in varying degrees from just above none to an indeterminate upper level. Some individuals are more literate or less literate than others, but it is really not possible to speak of literate and illiterate persons as two distinct categories” (Source: UNESCO 1957 cited in Oxenham 1980).

With regards to digital literacy, I would suggest that digital literacy isn’t a binary thing. I think that there is a scale of digital literacy that may be context dependant. While digital literacy is “a person’s ability to perform tasks effectively in a digital environment” (Source: Connecting the Digital Dots: Literacy of the 21st century, Barbara R. Jones-Kavalier and Suzanne L. Flannigan, Educause Quarterly, 2006).

I would suggest that depending on our role, those tasks may sit along a scale of complexity. For example, one individual may need to be competent at using email and word processing technologies whereas another, say a marketing executive may need to have a good understanding of SEO, HTML and data management platforms. This is perhaps a static snapshot. I realise that while this is a static snapshot, the reality is that wherever one is positioned along that scale, the world is changing fast and we all have the responsibility to become competent lifelong learners. Perhaps that’s a topic for another day.
I think that your question regarding softer skills is an interesting one. While I can’t speak for the HR professionals that attended the roundtable, I would suggest that this goes beyond digital literacy, perhaps even beyond information literacy and crosses into the realm of organisational psychology?

As an aside, as we support more and more organisations on their digital transformation agendas, it is clear to us that digital transformation can and often does require cultural transformation. I recall a quote from Peter M. Senge who wrote The Fifth Discipline: The Art and Practice of the Learning Organisation: “People don’t resist change. They resit being changed!” Cultural transformation is much more difficult to engineer and in practice requires the full engagement of staff from the bottom up. Perhaps it’s at this point that leaders need to think about things like dealing with change and empathy?

Re digital strategy versus strategy for a digital world, I think that you are spot on. It’s not about having a mobile strategy, or a data strategy; it’s about having a single all encompassing. Everything else flows from that.

As the “customer experience” drum continues to beat, I think that this has all sorts of implications for some of the things that you’ve pointed out – becoming user centred, data driven, adopting more agile structures and procedures………..all topics that are being explored daily on the blog and via Econsultancy reports.

To bring the discussion back to digital literacy, take a look at our Digital Skills Index (https://econsultancy.com/training/digital-skills-index-lite/), an assessment that we have developed for individuals to allow them to benchmark themselves across a range of digital disciplines. The Digital Skills Index covers 10 core digital topics - select the topics that you want to focus on and the assessment will show you how you measure up against the average scores of all users, people in the same industry, and level of seniority.

Sorry for the long post gents. I started writing and kept going!

Comments and critique always welcome :)

Seán

8 months ago

Gerrie Smits

Gerrie Smits, Digital Strategy Consultant at Ripple

Seán, now that's a comment on a comment. Thanks for taking the time. The DSI test looks interesting.

But as you say, the goalposts move. Rapidly. So my believe is that smart companies (will) also hire for skills like dealing with change, empathy,... Whether that"s part of 'digital literacy' is a semantic issue, but it makes it more cross-organisation.

Your note about "people don't like being changed" rings very true. And what I find is that, if we keep talking about things like digital, innovation, technology,... it becomes very easy for people to resist. So engineering change or creating a culture will become easier if we work more user-centric, so employees get a chance to own the change. We can't be against the client, so the speak. ;-)

Thanks again!

8 months ago

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Ash Roots, Director of Digital at Direct Line GroupEnterprise

Digital Transformation is culture change or put it another way to transform anything you need to have the right mindset in the first place.

Secondly HR departments start the transformation through support of attracting the right talent. The good ones realise their role continues throughout providing support and role modelling being open to doing things differently.

8 months ago

Seán Donnelly

Seán Donnelly, Senior Research Analyst at Econsultancy, Centaur MarketingStaff

Hi Gerrie, yes, I got carried away a bit!
Your comment about being more user centric so employees can get a chance to own the change is very insightful. Thanks for this contribution. It reminds me of another roundtable we hosted a few months ago. One of the participants spoke about educating employees about their own internal value proposition. I thought this was interesting. Employees who understand their role in supporting the company's success he said are more likely to be intrinsically motivated to take ownership of that success.

Thanks for your comment Ash. Recruiting and keeping the right people is spot on.
As Jim Collins said: “Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.” - powerful in in its simplicity and logic.

8 months ago

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