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Digitalisation prioritised in business strategies, but lack of leadership is hindering progress

Despite its importance in staying competitive and accelerating growth, business leaders are not seen as driving their company’s digital transformation, according to Mercer’s latest survey report, Still transforming or already performing?. While 61% of UK HR leaders confirm that digitalisation is embedded in their company’s corporate strategy, only 3 out of 5 rate leadership as the main driver of transformation. In addition to this disconnect, a lack of shared understanding of what digital transformation involves or should look like is blocking progress, and ultimately businesses’ chance to reap any commercial and competitive benefits.

Mercer’s report asked 600 HR leaders across multiple industries in seven European markets, including 121 in the UK, about their company’s digital transformation progress and their role in it. Despite being in an optimal position to help drive business-wide digital change, with the most touchpoints with employees, only 3% of HR leaders see it as their responsibility.

“Most companies realise digitalisation is key to staying competitive and accelerating growth, but the lack of understanding and agreement as to what it means, who owns it and how it should be done is slowing progress,” said Armin von Rohrscheidt, partner at Mercer Promerit. “To be successful, companies need a clear picture of what digital transformation means for all parts of the business. With transformation embedded in the business strategy clear actions are needed, then leaders can act as role models which will better drive engagement and progress.”

HR also lags when it comes to digitalising their own activities: Only 47% of respondents have a documented Human Resource Information Technology (HRIT) strategy and 44% have started implementation. UK HR functions are also slow at implementing cloud-based HRTI systems, with over half (54%) still using on-premise solutions. “Cloud-based systems are an essential tool in reducing administrative tasks for HR functions and so a great first step in a company’s digitalisation journey. However, just implementing technology has no value in itself; the output is what can release benefits and enable change. Armed with workforce data insights HR functions can elevate their own role in the transformation process and enable organisations to effectively anticipate and respond to disruption,” said Davide Pediglieri, UK HR transformation leader at Mercer.

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