Becoming a digital business means more than just introducing new technologies, and it turns out that’s really important when it comes to talent retention. Deloitte Digital and MIT Sloan Management Review found that businesses that do not invest in developing digital skills and capabilities of the workforce are more than 15 times more likely to lose vice president-level talent within their first year. However, many companies struggle to see the relationship between digital maturity, and how it encourages the acquisition and retention of top talent. This has a critical impact on the health of your business—and could ultimately be the key to survival in the coming years.
Digitally mature businesses tend to offer workforce development opportunities that go far beyond traditional training—their very way of being encourages growth. As your organization takes steps toward digital maturity, you’ll likely find that the satisfaction of your workforce increases, and talent retention improves. Here are three key reasons why.
1. Better development opportunities for leaders. According to Deloitte’s 2017 Global Human Capital Trends, only 5 percent of companies feel they have strong digital leaders in place. When it comes to retaining talent, this is a problem—one of the most attractive characteristics of an employer is trust in leadership and their vision. To many, particularly Millennials, it’s even more important than a hefty paycheck.
So what are employees looking for in leadership? More than ever before, in the digital age, great leaders need to rely on their ability to predict market trends and unlikely competitors, and collaborate with partners internal and external to their organization. That includes keeping people connected and engaged, as well as driving a culture of innovation, risk taking, and continuous improvement. What’s more, they need to be able to lead their people, including the skeptics, through uncertain solutions, inspiring them to try new things that can get the business ahead of the competition.
Mature digital organizations tend to have stronger leaders in these areas, and they also do a better job of identifying and developing talent with high leadership potential. One way many companies help strengthen these skills today is getting out of the classroom and providing leaders with cross-functional, collaborative problem-solving initiatives, guided by performance coaches. This challenges leaders to build a stronger understanding of how different business functions and industries can work together with technology to drive solutions. This also breeds opportunities for innovation and growth that top talent at all levels craves.
2. Stronger emphasis on cross-functional technology know-how. Glassdoor data shows that, for Millennials, growth and learning opportunities are now one of the leading drivers of an employer’s desirability. With rapid technology change, the half-life of an individual’s skill is less than 5 years—improving skills is a matter of survival. Two key types of technology training are critical to helping your workforce and company thrive: core skills and tech fluency.
Core technology skills are most critical for traditional technical roles. Are engineers developing your business using the latest methods, applications, and platforms? Are they updating them on a regular basis? Companies that help their technical workforce build new skills also help top talent feel confident their skills are remaining up-to-date—and that they don’t need to look elsewhere to keep up. This is particularly critical for industries that are not in the technology sector vying for the software engineering or analytics talent they need to grow. For example, Capital One understood this, and made significant moves to become a more nimble learning organization.
Tech fluency is primarily geared for traditionally non-technical roles—think marketing or product design. While these roles don’t usually need to know the nitty-gritty of new technology, they do need to be aware of the possibilities available. With high tech fluency across the organization, collaboration becomes easier, in turn, facilitating innovation and creative problem solving. All of this creates a rich environment for top talent to put their skills to the best use for your organization and for their career growth.
3. Deeply invested in collaborative, agile, and risk-tolerant cultures. Digitally mature organizations more often have cultures that encourage collaboration, agility, and tolerance for risk-taking. They invest in and test new ideas quickly, which serves to breathe creative energy into employees. Less digitally mature, or legacy, businesses tend to have more risk-averse cultures or “prove it before you release it” approaches—which can lead to missed business opportunities, and to your top talent feeling stifled and disengaged.
The difference between these two scenarios is fundamentally one of culture. To invest in culture means taking concrete action to build skills your workforce needs to evolve how work gets done. It also means ensuring incentives are aligned in a way that pushes people to try new solutions, even if they don’t always succeed. This is critical, especially for R&D-based sectors such as pharmaceuticals, consumer products, health care, and banking, which rely on market testing and consumer input to introduce new products or services.
When your business embraces characteristics of a more digital culture, your employees may be more likely to pursue stretch opportunities and stay more engaged and invested in their work. This helps improve retention, especially of your critical talent. It also makes you a talent magnet for others seeking interesting growth opportunities.
Ultimately, digital organizations maintain habits that better prevent talent stagnation.
As average lifespans extend, we are on the brink of what could become the 70-year career. In that environment, what tends to be most valuable to employees is growth—to stay engaged, but also to feel confident their skills will remain marketable for many years ahead.
Both traditional and organic learning opportunities work hand-in-hand: They make your business more effective, and they help you retain your most talented people. At the end of the day, these actions demonstrate how critical HR leaders are in moving the business from doing digital to being digital—with far-reaching benefits for talent, the business, and its bottom line.
Anthony Abbatiello is a principal in Deloitte Consulting LLP’s Human Capital practice and leads Digital Leadership. He specializes in leadership development, culture transformation, and HR strategy. He has led industry and functional human capital practices, provided thought leadership, and developed practitioners to deliver business results to clients. He serves global clients as a senior advisor in leadership development, talent strategy, and digital HR.