How can digital maturity overcome the high cost of skills shortages in organizations?

Did you know the average cost to onboard an entry-level employee and hiring mistakes can cost up to 30% of an employee’s salary (≈ $4,425)? When you miss talents essential for your organization today and tomorrow, it might lead to a crisis or closure.

It encapsulates their ability to leverage technology to enhance processes, attract talent, and foster a culture open to digital transformation. As companies grapple with the complexities of the digital era, the maturity of their digital practices becomes a key factor in determining their competitiveness and sustainability.

It includes:

• Understanding the digital framework to fill vacancies with the right talent effectively
• Skill sets, thus minimizing disruptions and optimizing productivity.

This article will explore aspects of digital maturity in organizations and the workforce. It emphasizes its importance in modern technological development. It highlights the benefits of mature digital organizations, such as improved efficiency, customer engagement, and innovation, to inspire business leaders to strive for digital maturity.

The five questions outlined below are critical in the context of automation and digital maturity as they collectively address critical facets such as:

• The percentage of tasks that can be automated
• Identifying areas where technology can automate tasks
• Leveraging employees in roles susceptible to automation
• Strategic planning for reskilling and transformation
• An approach to stay competitive and innovative
• Importance of fair compensation based on skills and value brought to the organization
• Potential outcomes and scenarios resulting from a total investment in competitiveness.

Follow the link to get the answers to the previous questions.

Digital maturity goes beyond simply adopting new technologies; it demonstrates an organization’s ability to effectively integrate digital technology across all business areas, fundamentally changing how it operates and delivering value to customers. It also reflects an organization’s readiness to continually adapt and develop in response to emerging technologies and market demands. The concept encompasses several dimensions: digital tools and platforms, data-driven decision-making, workforce skills, organizational culture, and customer experiences.

Digital maturity depends on aligning digital initiatives with strategic objectives and ensuring technology investments drive business objectives. A digital culture supported by leadership fosters innovation and agility. Investing in the digital skills of the workforce ensures adaptation to new technologies. A robust digital infrastructure supports advanced technologies such as AI, cloud computing, and IoT, vital to maintaining a competitive advantage.

Data analytics and simplified digital processes further enhance digital maturity. Developing the workforce’s digital skills is critical to adopting new technologies, while a scalable technology infrastructure underpins deploying advanced solutions. Data analytics enables insightful decision-making and personalization. Process optimization improves efficiency and service delivery, which is essential for organizations seeking comprehensive digital maturity and success.

Digital maturity is vital for organizations seeking to remain competitive in the digital age. It enables them to leverage technology to innovate, improve customer engagement, and streamline operations. By becoming digitally mature, organizations can offer personalized services across multiple channels, increasing customer satisfaction and loyalty. This maturity also provides:

• Adaptability and resilience.
• Helping organizations respond quickly to market changes and technological advances.
• Ensuring their long-term success.

In addition, digital maturity empowers employees, fostering a more effective and innovative workforce that drives organizational transformation toward digital goals. It improves decision-making through data analytics and AI, helping to identify trends and anticipate customer needs. Digital technologies also support sustainability by reducing waste and optimizing the use of resources in line with environmental goals. In general, digital maturity increases an organization’s competitiveness and contributes to society’s and the environment’s well-being.

Emphasizing the impact of digital transformation (DX) on guiding future advancements, the global Digital Transformation Market, valued at $695.5 billion in 2023, is poised for substantial growth. Projections indicate a remarkable compound annual growth rate (CAGR) of 24.1% from 2024 to 2030, foreseeing a substantial increase to a market size of $3,144.9 billion by 2030.

As organizations try to digital transformation for unprecedented opportunities, they simultaneously expose themselves to high-stakes risks. A comprehensive perspective is necessary, encompassing diverse domains such as strategy, human resources, process management, and information technology. Failure to respond proactively to digital disruption places entities at risk of revenue and profit decline, making them vulnerable to more innovative competitors. The initial technological dimension becomes critical in this scenario, where slow adaptation can jeopardize an organization’s competitiveness and sustainability.

Recognizing the risks associated with technology adaptation, digital transformation emerges as a gradual yet imperative process. Organizations turn to the measurement of digital maturity to assess progress and formulate strategies for future enhancement.

According to Business Insider analysis, among ten jobs expected to be particularly difficult to fill in 2024 are:

• Qualified social workers
• Multi-skilled maintenance engineers
• Quantity surveyors
• Cyber security experts
• Energy/carbon managers
• Engineering project managers
• Special educational needs teaching assistants
• Credit controllers
• Newly qualified accountants
• Supplier relationship managers.

Out of the ten job roles listed, three are directly related to digital maturity within an organization, which is 30% of all the listed jobs. Moreover, job roles and skills across different industries in the Middle East highlight the digital maturity aspects within each sector. Particularly in the energy and oil industry, there is a high demand for job roles such as technology expert in robotics and automation, energy engineer, production engineer, and data-driven supply chain management professional. As for skills, focus on innovation, efficiency, environmental considerations, and data analytics are among the top.

In the ever-changing digital transformation framework, companies such as Citigroup, Detecon, and Kramp are pioneering strategies emphasizing digital maturity to remain competitive. Through initiatives such as Citigroup’s Bora Bora project, Detecon’s intelligent solutions, and Kramp’s workforce planning optimization, these organizations demonstrate the vital role of technology and strategic planning in achieving operational efficiency and a dynamic talent management system.

Citigroup’s bold move to launch Project Bora Bora under CEO Jane Fraser is a transformational effort toward digital maturity and operational efficiency. This project signals the bank’s intention to adapt to the developing financial industry through significant job cuts, strategic exits, management optimization, and technology investments. This initiative reflects a broader industry narrative, where adaptation and recalibration are essential in response to market dynamics and regulatory pressures.

An essential aspect of Citigroup’s transformation is its significant investment in advanced technology infrastructure, including integrating Generative AI (GenAI) technologies. GenAI is a cutting-edge technology expected to play a crucial role in enabling more strategic analysis and innovation, thereby mitigating the effects of job cuts.

Detecon aimed to revolutionize how workforce skills are assessed, job placements are done, and skills gaps are identified. The move underscores a broader trend toward using digital solutions to improve organizational performance and employee engagement. The platform’s flexible, tailored approach to skills assessment and integration of occupation and skill taxonomies represents a step forward in digital maturity, emphasizing data-driven HR decision-making.

The collaboration between Detecon and HRForecast through smartPeople has set a new standard in HR digital transformation efforts. It highlights the value of adopting innovative, technology-driven solutions to traditional HR challenges, leading to improved employee experience, organizational performance, and a more strategic approach to talent management. This case study illustrates the transformative potential of digital tools in aligning workforce capabilities with future organizational needs, driving significant progress in digital maturity and operational excellence.

Kramp, a leading spare parts supplier in various sectors, has embarked on a digital transformation journey focusing on strategic workforce planning in collaboration with HRForecast. Faced with adapting to the digital age, Kramp sought to align its workforce with its digital ambitions by leveraging HRForecast’s data analytics expertise. This partnership was critical for Kramp to overcome the complexity of integrating workforce capabilities with digital advancements, ensuring the company’s continued growth and high-performance standards.

Scenario-based planning combines internal data with external demographic and talent information to create a solid foundation for forecasting future workforce needs and costs.

The result was essential for Kramp, enabling anticipatory workforce dynamism strategies and accurately understanding future workforce needs. By combining strategic workforce planning with digital logistics, Kramp has addressed challenges such as attracting rural talent and skills gaps and ensured that it thrives in a rapidly improving digital environment.

Case studies from Citigroup, Detecon, and Kramp illustrate the need for digital transformation and strategic workforce management in today’s fast-paced business environment. Despite operating in different sectors, each organization has taken important initiatives to adapt to the digital age, highlighting the common themes of digital maturity, operational efficiency, and strategic talent management.

Among the strategic recommendations, we could highlight:

• Embrace digital transformation as a continuous process. For instance, Citigroup implemented a digital banking platform, Detecon adopted cloud-based solutions, and Kramp introduced an e-commerce platform. These organizations view digital transformation as not a one-off project but an ongoing process that requires continual adaptation and investment. It includes staying abreast of emerging technologies such as AI and leveraging them for operational efficiency and customer engagement.
• Focus on strategic talent management, which integrates advanced data analytics tools for workforce planning and skills assessment. It’s crucial as it ensures that companies develop a talent pipeline that aligns with future business strategies, thereby equipping the workforce to handle the challenges of digitalization.
• Manage organizational change with care. Citigroup’s case shows how substantial organizational changes can affect employee morale and corporate culture. It is essential to manage these changes and ensure clear communication, support for affected employees, and strategies to maintain engagement and productivity.
• Invest in skills development and digital literacy. The case studies highlight the importance of identifying skills gaps and investing in targeted training programs. Organizations should prioritize the development of digital literacy across all levels of the company to ensure that employees are equipped to thrive in a digitally transformed environment.
• Leverage data for strategic decision-making. Effectively using big data and analytics for workforce planning and operational decisions can provide a competitive edge. Companies should invest in data analytics capabilities to enhance decision-making, improve customer engagement, and optimize operations.
• Adapt to changing market dynamics. Citigroup’s strategic market exits reflect the need for businesses to continually reassess their market presence and focus on core areas of strength. Companies should remain flexible and willing to recalibrate their strategies in response to market and regulatory changes.

Achieving digital maturity is not a one-time endeavor but a continuous journey. It requires a strategic approach, starting with leadership commitment and a clear vision for digital transformation. As leaders, you can foster a culture of innovation where experimentation and learning from failure are encouraged. Investing in employee development, modernizing technology infrastructure, and prioritizing customer-centric strategies are essential. Regular assessments and adjustments ensure digital initiatives align with the changing business objectives and technology frameworks. As leaders, your role in driving digital transformation is critical, and your actions can significantly impact your organization’s digital maturity.

The digital maturity assessment, a key method for gauging the current digital transformation within organizations, brings numerous benefits. Providing a comprehensive view of an organization’s digital capabilities enables leaders to identify areas for improvement and develop a digital transformation roadmap. While multiple dimensions are crucial for evaluating digital maturity, our focus will be on core facets like:

• Strategy for digital maturity. Digital maturity in organizations relies on a well-defined digital strategy that maps out the pathway to pursue goals while considering environmental threats and opportunities. A successful digital transformation requires a clear strategy with a strong vision outlining how digital opportunities will be exploited for new business value. Research indicates that digitally mature organizations are more likely to have dedicated leadership leading the implementation of a digital strategy, underscoring the importance of clear roles and responsibilities in driving digital transformation. Successful digital strategies focus on transforming the entire business, are consumer-focused, and recognize current consumer values over time.
• Digital infrastructure and platforms for digital maturity. The foundation of digital transformation lies in the infrastructure and platforms supporting an organization’s technological assets. In digitally mature organizations, technology infrastructure is well-integrated across all aspects of the business, allowing quick adaptation to change and improving business agility. Seamless integration of new technologies with existing ones is crucial for digital maturity. Adequate funding, investment in people and culture, and technology for real-time customer insights are essential elements in the digital infrastructure and platforms checklist.
• Risk management for digital maturity. While a proactive culture that tolerates risk-taking is vital, digital maturity requires equally proactive risk management. Effective risk management, embedded within the organizational culture, enables faster and more confident innovation. The checklist for risk management includes protecting the organization from cyber-attacks, assessing risk factors in technology investment, using scalable technology, and ensuring risk management is an integral part of the organizational culture. This emphasis on risk management underscores the need for a proactive approach to risk in the digital age.
• Talent and skills for digital maturity. Digital maturity is contingent on organizations proactively attracting and retaining digital talent and ensuring all employees possess the necessary digital skills. Key digital skills required include digital fluency, interdisciplinary collaboration, resilience, information management, critical thinking, creativity, and problem-solving. In the era of digital disruption, effective knowledge management and specialization in areas like machine learning are imperative.
• Customer experience design for digital maturity. Understanding and enhancing the entire customer experience is critical for digital organizations. Real-time customer data is used to customize services and sense shifts in customer expectations. The checklist for customer experience design includes using user experience research to address customer challenges, integrating customer experience across all interactions, continuous improvement, and effective communication to resolve issues.
• Technology ecosystem design for digital maturity. Digital technology offers opportunities for improved engagement and collaboration with suppliers and partners. Organizations should aim for a digitally enabled supply chain, leveraging API sharing for successful digital initiatives. The technology ecosystem checklist includes digital connections with the business network through API sharing, a technological foundation optimizing collaboration, interoperable technology platforms, and integrating a wide range of digitally enabled devices potential for ~4.500 jobs and their tasks.