November 26, 2020

Organisations not ready to scale their workforces to drive digital transformation, Aon study finds

The digital future will require a new set of skills, behaviours and ways of working, but most organisations have not defined the critical competencies needed to compete in an age of disruption and do not have a process in place to assess digital readiness in their own people, a new Aon study finds. Aon plc (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, shared insights from 1,551 senior business executives, HR leaders and employees around the world in its 2020 Digital Readiness Report.

Key findings of the report include:

  • 51% of respondents agreed that their organisation has executed/is executing an effective digital strategy across the entire firm
  • 41% of respondents agreed that their organisation knows how to identify individuals with digital potential.
  • 43% of respondents said their organisation plans to use contingent workers as part of their future talent strategy.
  • Only 11% of respondents strongly agreed that their rewards structures promote organisational agility.
  • Additionally, an Aon pulse survey shows that since COVID-19, 84% of organisations are exploring different working models, 53% are accelerating the use of virtual recruiting and onboarding tools and 55% are focusing on increasing workforce agility and internal mobility, whereas only 49% are accelerating their digital transformation agenda.

“For HR leaders, the continuous state of disruption caused by the Fourth Industrial Revolution – and now COVID-19 – will require a new, more flexible approach to workforce planning and development,” said John McLaughlin, Commercial Director for Aon’s Assessment Solutions. “To thrive in this continuously disrupted future, employers will need to transform their approach to people, jobs and rewards at the individual, team and organisational levels for constant adaptation.”

Aon’s 2020 Digital Readiness Report revealed five key insights:

  • Developing and executing an effective digital strategy remains a challenge for many organisations.
    Most respondents reported that their organisations had made significant progress toward executing an effective digital strategy, including placing digital leaders in critical roles. Confidence in digital leadership varied by region, with North American (76%) and European (65%) respondents being more likely than companies in Asia Pacific and Middle East (58%) to report having the right people in digital leadership roles.
  • HR professionals were less confident in their organisation’s digital readiness than people in other roles.
    HR professionals (47%) were less likely than their IT counterparts (71%) to express confidence that their organisation was executing an effective digital strategy across the entire firm and that digital leaders were in the right roles (63% vs. 83%, respectively). HR professionals, along with legal (both 37%), were the least likely to agree that their strategic plan incorporated contingent technology workers.
  • Globally, many organisations need to improve how they support their virtual teams, but there are notable differences by industry and region.
    The degree of flexibility varied by industry with respondents at technology and telecom companies (67%) being significantly more likely to report their teams work flexibly than respondents from finance (46%) and transportation and logistics companies (39%). North American respondents (71%) were the most likely to report being well-prepared to work in a virtual environment.
  • Most organisations have not defined the critical competencies they will need in the future, nor have they established a process to assess for them. Only 41% said their organisations knew how to identify digital talent, and 44% said their hiring process included a digital experience for candidates.
  • Most organisations are not maximising the potential of their internal talent.
    Slightly more than half agreed that identifying and developing internal talent with high potential was part of their digital strategy. Respondents at retail and consumer goods organisations were the most likely to agree that internal talent was a priority (61%).
  • Most organisations’ rewards programmes are not designed to attract and retain digital talent.
    Only 34% agreed that their rewards programme helped attract and retain digitally ready talent. Looking across industries, media professionals (42%) were the most confident that their organisation’s rewards programme supported digital talent. The public sector, non-profit, and education had the fewest people express confidence that their organisation had a digital-ready rewards strategy (22%).

“Digital transformation changes the agenda of HR leaders,” said John McLaughlin. “A flexible workforce depends on HR empowering employees to make the best of their careers within the organisation.

“Without the traditional career ladder to anchor raises to, organisations will need to find new ways to measure and anticipate which employees are going to have the biggest impact on business performance and what kinds of rewards they will value most. Organisations will need to adopt a more rigorous, data-driven approach to optimise and align a rewards programme to business objectives, market data and the needs of the workforce.”