Recruiting, Talent

Digital Skills Investment Impacts Talent Management and Talent Acquisition Efforts

Business leaders who have completed digital transformation projects across their entire organization report significant increases in employee engagement compared to those with more limited initiatives.


So finds a new study, conducted by the SAP Center for Business Insight, a research arm of SAP, a market leader in enterprise application software, and Oxford Economics, a global advisory firm, which surveyed more than 3,100 global business decision-makers to examine the priorities driving digital transformation projects.

Study Findings

There are stark differences between organizations that have completed transformation projects and those that have yet to fully adopt digital strategies.
Sixty-four percent of executives with broad-ranging digital initiatives say their employees are more engaged, compared with 20 percent among organizations that have completed transformation projects in single business areas.
Research finds successful transformation depends on people, highlighting the importance of workforce investments in driving digital business performance.
What’s more, digitalization is rapidly impacting the business landscape—and talent management, in particular.
Eighty-three percent of digital transformation leaders expect digitalization to change talent management over the next two years. That figure compares with only 37 percent of organizations that have yet to begin digital transformation.
The change is driven in part by its impact on talent acquisition and employee retention.
Respondents who completed digital transformation projects across their business have a more crystallized vision of the potential benefit across their HR processes, with 71 percent saying digitalization will make it easier to attract and retain the best talent, compared with 54 percent of other respondents.
Additionally, digital transformation creates new jobs.
Approximately 52 percent of the businesses that have undergone digital transformation projects say they plan to create new roles to reflect technological imperatives over the next two years, compared with only 32 percent of companies that have yet to undertake digital transformation.
“Today’s leading businesses are putting their employees at the heart of their digital transformation strategies,” said Greg Tomb, president of SAP SuccessFactors. “This research shows successful digitalization depends on people, with the most innovative and forward-looking companies committed to investing in their workforce to ensure they are properly equipped to meet the challenges of tomorrow.”

Also of Note

Other key findings from the study include:

  • More than one-third of global companies believe that talent management and development are key drivers of digital growth. Some 31 percent agree that investment in employees’ digital skills would be the most important factor in increasing revenue in the coming years.
  • The banking sector shows the greatest commitment to increasing investment in digital skills over the next two years. Forty-eight percent list it as the most important factor to driving profit growth, while 45 percent of the professional services sector rate improving employee engagement as the most important profit-driving factor.
  • Digital transformation has had a greater positive impact on talent retention and development on U.S.-based organizations than on those of many of their global counterparts. About 19 percent of American businesses surveyed say technology updates have completely or somewhat transformed their talent management processes, compared with only 8 percent of UK businesses, 7 percent of German organizations, and 5 percent of Mexican businesses.

Additionally, the study shows that a commitment to digital transformation pays off. Compared to other companies surveyed, digital leaders have stronger revenue growth and profitability today – and expect that advantage to continue over the next two years. In fact, digital leaders expect 23 percent higher revenue growth than all others in the next two years, and 80 percent of leaders say transformation efforts have increased profitability versus 53 percent of all others.
“Digital transformation is about more than investing in the latest technology,” says Edward Cone, technology practice lead for Oxford Economics. “People matter most – how they work, what they know, which skills they need in a changing workplace. Most companies have only begun to address these human factors, and those that fall behind may never catch up.”