Talent Enables Mid-Market, Private Companies to Capitalize on Technology and Develop New Lines of Business With Gig Workers, Deloitte Survey Finds
Thursday, August 9th, 2018
Amid the tightest labor market in years, mid-market and private companies are placing a premium on talent as being a critical factor in technology deployment, according to a new Deloitte report, "Technology in the mid-market: Embracing technology." Focusing on talent as a strategic differentiator can help private enterprises increase productivity, enhance customer engagement, and develop entire new lines of business.
In its sixth annual report, Deloitte Private explores the technology trends that drive mid-market and private companies in the U.S. economy. Deloitte surveyed 500 executives in this segment and found that 46 percent plan to hire more people than before emerging technologies came on the scene. Only one-quarter (26 percent) see digital disruption as shrinking the workforce.
"Mid-market and private companies understand they don't have to compromise between investments in technology and talent," said Chris Jackson, senior manager, Deloitte Consulting LLP and Deloitte Private technology leader. "As an engine of economic growth, the segment is augmenting the workforce with technology and driving businesses in new ways."
Reskilling and recruitment strategies are key to unlocking technology potential
When it comes to digital disruption, operations (54 percent), customer service (46 percent), and marketing (41 percent) are expected to see the most workforce-related changes. To prepare workers for this shift, 61 percent of mid-market and private companies surveyed are reskilling employees, and 57 percent are redesigning jobs to seamlessly integrate people and machines. Consequentially, 58 percent of business leaders anticipate a boost in worker productivity, and 55 percent expect a reduction in operational costs.
Mid-market and private enterprises also are taking advantage of the gig economy. Sixty-two percent of respondents say it has allowed their companies to become even more agile in product and service development, while half of companies surveyed are leveraging gig workers to develop entire new lines of business.
Given high demand for talent, mid-market and private companies are developing strategies to attract the next generation of workers. To meet the demands of the digital native Generation Z, the segment is putting an inclusive workforce (64 percent), enhanced experiential learning and development (58 percent), and a focus on well-being (55 percent) at the heart of their recruitment strategies.
Collaborative leadership takes center stage but information technology governance strategy stalls
The pace of technological adoption — and talent strategies needed to sustain it —necessitate a collaborative approach to leadership. Technology decisions are no longer the sole responsibility of the CIO; 87 percent of executive leaders are leading the charge or remaining actively engaged. Underscoring the importance of C-suite involvement, more than half of respondents (57 percent) are spending more on technology this year than last. Furthermore, mid-market and private companies are using the savings from the December 2017 passage of U.S. tax reform legislation to invest in emerging technologies (42 percent) and hire new talent to expand digital capabilities (37 percent).
Despite increased collaboration, a third of respondents report having little to no formal IT governance processes in place. A lack of resources (26 percent), cost (21 percent), and a lack of understanding of its importance within the C-suite (19 percent) are holding companies back. This becomes more important when privacy and ethical concerns are considered given the pace of technological change.
"Technological disruption brings with it both risks and opportunities, none of which can be properly addressed without rigorous IT governance practices," said Doug Beaudoin, principal, Deloitte Consulting LLP and Deloitte Private consulting leader. "Given technology's proliferation across business operations, it is crucial for the C-suite and boards to have an active role in IT as it relates to overall governance."
Information security weighs heavily on the minds of mid-market leaders
Information security continues to be an investment priority for mid-market and private companies, as illustrated by our survey results. Organizations view information security as the No. 1 trend impacting businesses, the workforce and customers. To bolster defenses, 64 percent of companies are focusing their IT security spend on threat prevention, 64 percent on educating employees about risks, and 63 percent on investing in advanced security hardware.
Given the segment's security concerns, companies are continuing to advance their foundational security by adopting emerging technologies like artificial intelligence (AI) and cognitive computing; for example, 47 percent of respondents are considering the use of blockchain technology for storing and securing digital records.
Customers and employees are at the heart of technology trends
Almost 60 percent of respondents say they use analytics for sales and customer management activities. Consistent with the segment's focus on talent, 57 percent are using HR analytics for performance and productivity, and 56 percent leverage it for talent sourcing and acquisition. Companies are using mixed reality for employee training; education and learning (46 percent); and two-thirds of respondents use robotic process automation to handle high-volume, labor intensive tasks.
"These types of AI and cognitive technologies that are readily available demonstrate the sector's commitment to maximizing workers' use of technology, more specifically leveraging technology enhancement to increase productivity while also expanding workers' capabilities, opportunity and reach," said Jackson.