Digital transformation, digitalisation and digital roles are on the agenda of all companies. And whether we like it or not, these changes touch all of us – as managers and employees but also as customers. We can drive it, be part of it, or resist it, but the first step is to rethink how we define ‘digital’ in the world of work. It’s no longer a ‘thing’ that can be quarantined to the tech or marketing department, it’s a required way of working for all jobs. From farmers getting real-time recommendations on crop management based on big data to augmented reality helping surgeons to plan operations, no job will be untouched. And no company.
It takes a particular type of person to thrive in a digital world. They have a different mindset, they’re more fluid, agile and proactive in taking on risks and meeting challenges. And they’re always focused on the customer. Digital roles demand this type of person – they have fewer repetitive tasks and require more decision-making and multi-skilling. But the talent pool for filling these jobs is incredibly shallow.
To further complicate things, salary data for digital roles is not easy to come by and so finding the right package to attract and retain digital talent can feel like a stab in the dark. But it doesn’t need to.
What is the digital challenge?
It’s no secret that digital transformation is having a major impact on today’s businesses. In virtually every industry, companies are grappling with the reality that they either need to embrace digital or risk getting left behind. By 2020 it’s predicted that 41% of enterprise revenue will come from digital business.
In this environment, existing roles are changing shape to embrace digital elements, while new roles are constantly emerging. The very structure of the organisation has changed, with flatter more agile teams shifting how jobs are ‘valued’.
Alongside this, the shortage of quality talent – especially digital talent – is already starting to bite and it’s driving a salary surge. Forecasts suggest that organisations globally could add more than $2.515 trillion to their annual labour costs by 2030.
While these factors are challenging in and of themselves, most organisations are finding that the challenge is exacerbated by their existing reward structures. Highly structured, paint-by-numbers reward strategies simply aren’t equipped with the information or the flexibility to accommodate digital market demands.The digital challenge: roles are changing shape to embrace digital elements, while new roles are constantly emerging. The very structure of the organisation has changed, with flatter more agile teams shifting how jobs are ‘valued’. Click To Tweet
Rise to the challenge
Organisations urgently need to figure out how to hire and reward the talent they need to effectively meet the digital challenge.
An essential part of the change process involves developing new, more effective remuneration solutions that are flexible enough to meet the individual needs of highly valued digital talent. These needs can’t be met by rigid reward structures and systems designed to reduce risk for the organisation. Instead, companies must look beyond simply ‘how much we pay’ to a holistic reward plan that considers and rewards behaviours alongside results and also takes into account non-salary benefits. When we change the game we need to incentivise much more than just taking risks; we must also incentivise success. We are talking about the flexibility of reward packages, about equity-based compensation and embedding development into the core packages.We must incentivise success. This includes flexibility of reward packages, equity-based compensation and embedding development into the core packages. Click To Tweet
This means that digital must now be built into the DNA of your organisation’s total reward strategy. These are the questions that all reward professionals should be asking:
1. Start with digital strategy and the change you need
- What kind of change do you need to enable? Is it a digital revenue stream? Or digital transformation impacting the whole company?
- Where do people need to focus their energy?
- Should we transform the organisation we have or maybe build a separate organisation to drive digital activity?
- How will we measure progress and success? How will we cascade the strategy to individual levels through the goal setting process?
2. Know what talent you need to deliver
- What mix of born-digital, going-digital and nondigital?
- What digital talent and digital potential do you have?
- What talent will you build or buy?
- Are our current recruitment channels effective? Are we able to the attract right candidates?
- What does it take to retain digital talent?
3. Align total reward strategy to enable all employees
- Is our employee value proposition attractive to candidates? Is our reward package an important part of it?
- What do we want to pay for? How we want to incentivise the right actions?
- Should we differentiate our policy for digital talent or re-design our reward system for the whole organisation?
- What level of flexibility in rewards across the company are we willing to allow?
- What are the risks of building too diversified/inequitable pay practices internally?
To successfully execute a digital rewards strategy, access to insight is critical. Feel confident you’re making the right reward decision for digital roles, learn more about Korn Ferry’s 2019 Digital Talent Study.