Employees have to invest in their own digital proficiency: Jean-Marc Laouchez
Even if the company is only looking for labour cost reduction, a number of employees with valuable ‘legacy’ knowledge will have to be trained for the digital era, says Jean-Marc Laouchez
New Delhi: As firms across the world go digital, job cuts are inevitable. How can employees ensure their job is secure? Jean-Marc Laouchez, global managing director (solutions) of US-based consulting firm Korn Ferry Hay Group Solutions, says employees will have to invest in gaining digital proficiency just as they would in learning a new language. Edited excerpts from an email interview:
Companies across sectors are trying to go digital. Do Indian firms have the know-how?
Yes, most traditional organizations around the world are going digital. Some were born digital, others are just starting the journey. India Inc. is on the same continuum as elsewhere, with some Indian companies shaping the digital world while others “react” to digitization and focus on low-hanging fruits, such as e-commerce, automation or cost cuts.
Does digitization necessarily mean extensive job cuts?
Korn Ferry research has identified five impacts of digitization with various degrees of risk and value creation: cost reduction, customer/employees experience, product/technology innovation, employees empowerment and networks activation, and new business models. The less digitally mature organizations see digitization as an extension of their current business: how to be more efficient and enhance clients’ and employees’ experience. More digitally mature organizations leverage their assets to develop new technologies, fundamentally rethink their relationships with clients and employees (e.g., active networks), and build disruptive business models. The development of Amazon.com from a low cost online bookstore to an open digital Web, logistics and retail marketplace illustrates these different stages, and how they radically impact the value of the company.
How can companies cut costs by destroying minimum jobs?
Recruit or develop leaders with the mindset and skills to digitalize for higher value creation. Beyond the expected understanding of digital economics and business models, these digital leaders should have the influence and courage—risk-taking is a distinctive trait of successful digital leaders—to:
•Invest in re-schooling /re-skilling their employees (e.g., assessment of potential, continuous development, emotional support),
•Empower their front-line talent to identify and execute new solutions and businesses,
•Enter into innovative and fair work and pay incentive arrangements (e.g., structured contingent workforce, individualized pay strategies).
Should companies have a re-skilling budget? What is the best way to estimate the cost?
Yes. Even if the company is only looking for labour cost reduction, a number of employees with valuable “legacy” knowledge will have to be trained for the digital era. Korn Ferry is reinventing Hay Group Job Grading—an industry standard work measurement system—to better quantify the intangible (e.g., digital) value of work (e.g., know-how, problem solving, agility, relations, experience) beyond the tangible job accountability. The investment in re-skilling—or lack of—should be assessed against this additional intangible value. As an example, the “value of an employee” who is able to fully harness years of customers’ insight or specialized expertise in a digital context is often a “multiple of the value of a new employee” who has digital training but less relevant business experience. It is important to note that companies will often get into creative arrangements to reskill employees (e.g., provide an education account as a benefit). Increasingly, the employees themselves will have to anticipate and invest in their own digital proficiency, as they would do for learning a new language.
India is among the countries to jump onto the digital bandwagon. What can we learn from the Western countries?
I am not sure that India is lagging behind other countries in terms of corporate digitization. I understand that Internet penetration is lower than in many countries. But India Inc., in a number of sectors (e.g., technology firms, BPO), is probably ahead. As per Rebuilt to Last—The Journey to Digital Sustainability—a recent Korn Ferry research white paper with some learning based on the analysis of our proprietary databases and on our observation of best practices, the best digital performers implement disruptive business models or new digital practices by developing five critical capabilities:
•Discipline and focus
•Agility—Agile leaders and organization is a must
•Connectivity—both internal and external
•Openness and transparency—probably one of the most difficult capabilities to develop as it challenges traditional command-and-control cultures
•Empowerment and alignment
Which sectors will see job cuts due to digitization?
On the short term, the sectors with repetitive physical work (e.g., manufacturing with robotization—already a mature trend) and repetitive intellectual work (e.g., services and decisions that can be performed through data and algorithms, with limited need for human experience and judgement). Digitization will also create new industries and jobs, providing attractive opportunities for the “reskilled digital worker”.
Most companies appoint marketing heads for digital initiatives, as you mentioned. Is that the right way to drive digital growth?
Companies need leaders that will inspire and drive the digital transformation of their organizations. IT or marketing heads bring a lot of the capabilities required for such transformation. Strategy professionals, CFOs, COOs, HR professionals or front-line sales and delivery talent can also lead and bring new perspectives to create and execute digital businesses or activate digital partnerships and networks.
Having the right leader is key, but the enabling ecosystem (like focused structure, digital learning culture, speed to market, analytics, partnerships) is as important, as legacy practices and infrastructure often inhibit digitization.