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Digital transformation demands focus on work and skills

Facing the future

Compensation Strategy & Design|Future of Work
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By Hatti Johansson and Michiel Klompen | July 25, 2019

New digital technologies are rapidly disrupting traditional business models and creating an increased demand for digital talent—workers with the skills (e.g., artificial intelligence, big data, digital strategy, digital marketing) needed to support the digital transformation of an organization.

Yet, organizations indicate that full-time digital talent can be hard to find. Furthermore, the skills an organization requires may frequently change, leaving organizations with traditional, restrictive role-based job classifications that don't adapt well to the fast-evolving digital landscape.

In order to be competitive in today's digital world, organizations must go beyond simply adopting and integrating new technologies to also attract digital talent that has the right skills to support the creation of the right organizational model. To do so, it is necessary to access quality data insights that can help to inform their business strategies.

Many organizations understand that digital transformation requires breakthrough approaches in their organization, talent, and reward strategies. There is an increasing need to understand the implications, risks, and requirements of building a workforce that can thrive in an increasingly digital future.

New research by Willis Towers Watson indicates that organizations recognize the urgent need to attract the right digital talent in order to transform their business and drive results.

Many organizations are confronting the challenge of digital transformation.

According to the results of the 2018 Digital Transformations Practices Report, over 80% of organizations in North America have implemented changes to their structure to leverage the latest technologies. Over a third (37%) of organizations have added digital responsibilities to existing job descriptions or created separate digital jobs in existing functions. At the same time, less than a quarter of organizations (23%) have formed unique digital job classifications to support the changes and 12% set up a standalone digital business unit within their organization.1

Our research also indicates the top three actions organizations are currently preparing to:

  1. Address talent deficits through workforce planning and actions
  2. Assess talent to identify "skill and will" gap. This is the gap between the 'skill' needed to get work done and the 'will' needed to do the work
  3. Match talent to new work requirements

Yet, organizations still struggle to find the type of talent that have the necessary digital skills. In fact, 90% of organizations in North America are experiencing difficulty securing digital talent, and many organizations have turned towards non-traditional work sources (e.g., freelancers, talent exchanges, online talent platforms, and automation) to get work done.1

With automation helping to break jobs down into tasks and skills, there are now a multitude of ways to secure talent with the increase in use of non-traditional work sources (e.g., freelancers and automation). The use of freelancers is already fairly common, and we expect to see an increase over the next three years in the hiring of freelancers or free agents from online platforms such as Upwork, which connects clients and freelancers.

Evolution of skills

This shifting focus on skills, business requirements for a digital transformation, as well as supply and demand of talent, is driving the market for the relative value of certain skills over others. The 2018 Contingent Work Skill Premium Report – U.S.1 sourced data on more than 180,000 fixed fee and hourly projects from Upwork projects. It shows the top work areas that have the highest relative premiums for certain areas (See Figure 1). The need for freelancers with in-demand skills can drive up their rates, and the dynamic nature of the market means in-demand skills evolve and change rapidly over time.

1) blockchain; 2) cloud computing; 3) AI and machine learning; 4) cybersecurity; 5) DevOps; 6) OS, hosting, virtualization
Figure 1. Highest relative work areas where skills are in demand

Organization of the future

So what steps do we recommend organizations take to deal with all these changes?

  1. First, create an agile skills framework that is built for the future, focusing on skills that make a job — not the other way around. Organizations are re-examining their definition of a job and how to deconstruct work to identify tasks needed to get work done and to understand how they can be reconstructed into new, more optimal combinations balanced between permanent employees, contingent workers, and automation or Artificial Intelligence.
  2. Next is to rethink your survey benchmarking, concentrating more on the type of skills required to complete the work. Today, organizations match jobs to survey benchmarks based on the assumption that the work and skills required are largely comparable. In the future, instead of benchmarking jobs, we expect a resurgence of skills-based evaluation and pay. This may mean looking at the market rate of unique skills, which underpin the tasks required to do the work.2
  3. Finally, create an integrated talent ecosystem that focuses on connecting people (i.e., permanent employees or freelancers) to work, HR will become increasingly tasked with creating a talent experience that mirrors the organization's customer experience. Plan and design an "organization of the future."

Many organizations are confronting the challenge of digital transformation. So long as they understand the steps to take to attract and retain the right talent with the right skills, they are on the right path. Gain access to the information you need to navigate the world of digital talent; Willis Towers Watson's 2019 Artificial Intelligence and Digital Talent Compensation Survey is available for non-participants.

This article written by Willis Towers Watson was originally posted on Upwork.com but does not constitute the views or opinions of Upwork.


Endnotes

  1. The Willis Towers Watson Artificial Intelligence and Digital Talent Reports, North America, 2018.
  2. Navigating the new skills economy – gradual adaptation or reinvention? (The article was first published in People Matters – March 2019 Issue.)
  3. Strategies for the New Economy Skills as the Currency of the Labour Market.
Authors

Hatti Johansson
Global Innovation and Product Development Leader

Michiel Klompen
Global Product Lead SkillsVue & Artificial Intelligence and Digital Talent Survey

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