Technology innovation is ubiquitous, but adoption rates and outlook still vary
Rebecca Henderson, CEO of Randstad Sourceright
Historically, technological advancements impact business sectors and geographic markets at differing degrees. This is still the case in today’s current wave of rapid-fire innovation. From our 2017 Talent Trends survey of more than 700 human capital and C-suite leaders, we uncovered surprising results when it comes to perceptions about workplace technology and its deployment.
Sectors, such as life sciences, that have traditionally lagged in adoption show a greater willingness to embrace new solutions, while leading practitioners in IT display less enthusiasm about new HR technologies. Similarly, employers in some maturing local markets say they are increasing budgets for innovation at a higher rate than their counterparts in highly mature areas. The proliferation of technology is happening so quickly that old paradigms about early adopters may no longer hold true. In the new normal, any business anywhere can leverage innovation to gain a competitive advantage.
This is reflected in the outlook of talent leaders in various regions around the world. When asked if technology has made recruiting simpler and more efficient, a higher percentage of companies in Brazil (88%) and Asia Pacific (72%) are in agreement than those in the US (66%) or continental Europe (62%). When asked if technology leads to smarter hiring decisions, 90% of Brazilian and 75% of APAC companies believe so, while 70% in North America and 66% in Europe said the same. This is likely the result of employers in developing markets being more energised from the success of early adopters in mature markets.
A dilemma for businesses operating in more mature markets is that as early adopters, they realise the benefits of new technologies more quickly. However, that also means they are often stuck with a particular solution, even as better versions come to market.
Our research shows that companies in maturing areas of the world are highly enthusiastic about what talent innovation can do for them. For instance, 72% of Indian employers say they are investing in recruitment marketing platforms at moderate to significant levels, but just 24% of those in the Netherlands are doing so. A majority of Brazilian companies (70%) are investing in HR and analytics dashboards, but just 32% in Germany are doing so. And 69% of Chinese organisations are investing at moderate to significant levels in HR management systems, but just 33% in Sweden are spending their budgets this way.
Sector adoption rates vary
Market maturity isn’t the only determining factor when it comes to adoption rates. The nature of the organisation’s business also indicates how quickly organisations react to new technologies. Some industries, such as IT & technology and automotive & manufacturing, have been on the forefront of robotics, automation and AI for decades. Others are picking up momentum; for instance, banking & financial services companies are rapidly adopting automated trading. Still others have been slower to do so because of regulatory restrictions.
For example, among the five major sectors we examined closely, Life sciences & healthcare companies report the lowest positive outlook (73%) on the impact of AI and robotics in the next three to five years. Contrast this with employers in the IT & technology business, where 88% hold a positive outlook. This is likely due to the regulated nature of the healthcare business, which often requires local or regional authorities to approve changes in the way organisations work or report activities. In the pharmaceuticals business, good manufacturing practices (GMP) are often thoroughly vetted to ensure compliance with regulatory requirements, which can slow the adoption of new technology. In fact, regulatory bodies such as the US Food and Drug Administration in recent years have revised guidelines on data integrity for manufacturers.
Beyond regulatory considerations, today’s technological breakthroughs are having a greater transformative effect on some industries, more than others. When asked about the promise of digital resources, more than three-quarters of automotive & manufacturing companies (82%) say it provides an expanded reach and opportunities for them, but just 56% of consumer goods makers agree. Three-quarters of banking & financial Services companies think automation will impact and shift the talent needed in their organisations, but just 62% in life sciences & healthcare hold the same view.
Robotics and automation are in the process of completely changing the automotive industry as driverless vehicles become more common. Car makers are making greater investments in robotics on the production line as well; in fact, half of industrial robots sold in North America are sold to this industry. And among the major sectors we surveyed, automotive & manufacturing employers are most likely to say they plan to adopt automation and robotics to a greater extent in the next year.
Similarly, more financial services companies are using robots to conduct trades, eliminating a number of back-office roles. According to our Talent Trends findings, this sector follows the automotive and & manufacturing industry closely with plans to use robotics and automation in the next year.
The five sectors we examined report mixed results from their investments in the past 12 months. Only 34% of employers in the IT & technology industry say HR digitalisation has transformed or had a positive impact on their business, falling from 71% in 2016. A similar drop is reported by consumer goods employers in their outlook on automation and machine learning, declining from 76% in 2016 to 60% this year.
However, more than half (55%) of the banking & financial services companies say they are increasing investments in AI and machine learning, up from 33% last year. Life sciences & healthcare organisations also expect to increase spending for robotics, albeit more modestly from 36% of those surveyed last year to 41%.
While there are variations in how sectors view and adopt technologies, across the board, most are optimistic about the value it delivers. What we readily observed is that early adopters of robotics, automation and digitalisation may have reached a momentary plateau on their investment returns. This may be due to a number of factors such as the integration curve associated with new technologies, a lull in the upgrade cycle as buyers await new releases or amortise their current purchases, and uncertainty about how to leverage promising new innovations in their organisations. With so many new solutions being introduced into the marketplace today — whether they are robotics or cloud computing — employers are sure to find many offerings to support their talent strategies.
Photo courtesy of Shutterstock.com