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B E N C H M A R K I N G H R D I G I T A L
Still Transforming or Already Performing? Executive Summary
Mercer’s Benchmarking HR Digital study evaluates the progress organisations are making in their digital transformation programmes. It also examines which parts of the transformation companies are achieving success in or lagging behind. Insights collected from over 600 participants across Europe and the United Kingdom include drivers and barriers to digital change such as HR digital transformation, HRIT landscape and measure of digital transformation maturity based on the Mercer Promerit HR Digital Transformation Index.
F I N D O U T A B O U T Y O U R C O M PA N Y ’ S H R D I G I TA L T R A N F O R M AT I O N M AT U R I T Y
Rank yourself against our extensive benchmarks from the Benchmarking HR Digital study and compare your progress. Find out about HR’s role and contribution in the company’s digital transformation as well as HR’s own digital transformation.
T R Y T H E H R D I G I TA L S U R V E Y T O O L bit.ly/HRDigitalTool
Benchmarking HR Digital Study
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Mercer’s Benchmarking HR Digital study evaluates the progress organisations are making in their digital transformation programmes. It also examines which parts of the transformation companies are achieving success in or lagging behind. Insights collected from over 600 participants across Europe and the United Kingdom include drivers and barriers to digital change such as HR digital transformation, HRIT landscape and measure of digital transformation maturity based on Mercer Promerit HR Digital Transformation Index.
Executive Summary
What is HR’s role in digitalisation? HR still holds two roles within the digitalisation journey. The first role is to support or lead the business in building and acquiring competencies for the digital future — to ensure new work environments, to change leadership styles and to develop cultures that foster innovation and openness for change. The second role is to digitalise the HR function, to digitalise HR services, to integrate HR processes, to provide people data for decision-making and strategic workforce planning, and, finally, to own the digital experience for every employee and manager in the company. HR is the first and last touchpoint an employee has with the company and should be the main advocate for the employee’s development and ability to thrive.
Who drives digitalisation? A key finding from the study is that responsibility for driving business digitalisation has shifted. Two years ago, companies perceived IT as being the owner and driver of digitalisation, whereas today companies say that the CEO and other business executives drive digitalisation strategies and efforts. That said, companies are still in the mode of digitalising existing processes and are not yet ready to disrupt the way they do business — let alone disrupt their business model.
What drives digitalisation maturity? Companies that are farther ahead in their digitalisation journey have invested in areas such as changing the company culture to allow trial-and-error approaches and defining needed competencies for the digital future to build and attract these competencies and offer a new workplace environment. But our study also revealed that HR is not taking the lead in areas that are naturally
very close to the HR responsibility. Hence, HR is missing the opportunity to position itself as strategic partner or even take the lead to drive the company to digitalisation maturity.
What is HR doing to digitalise HR? It is surprising that many companies have just started their HR cloud journey. Comparing business digitalisation efforts with HR digitalisation efforts, HR is lagging behind in digitalising its own function. Most HR functions still focus on digitalising HR administration processes and integrating talent management processes to drive HR efficiency. Initiatives to increase the digital experience of employees and provide managers and executives with people analytics are rarely the drivers of HR digitalisation — instead, they are viewed merely as additional benefits.
What is the bottom line? Companies are evolving, and digitalisation maturity is accelerating. To determine the actual digital maturity of companies and HR, we built on our HR Digital Transformation Model. This model is used to determine the HR Digital Transformation Index, which shows companies’ rates of digitalisation maturity, and to get a sense of what challenges companies are facing in their digital transformation.
The digitalisation journey holds a great opportunity for HR to move into a strategic position and to make a real contribution to the overall success of the company. But at the moment, the digitalisation gap between the business and HR is growing. Most HR functions are still at the beginning of their transformation journey to become a strategic partner in the digitalisation of the business.
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Digitalisation is now set as a key topic on the executive level. However, top management is not yet a role model for the digitalisation.
#DigitalStrategy
59%16%
Top management has a shared understanding of digital transformation
59%
55%
17%
21%
Digitalisation is anchored in the corporate strategy
Top management acts as role model for the digitalisation
About 59% of all survey participants agree that digitalisation is anchored in the corporate strategy, top management has a shared
understanding and the fields of actions are clearly defined.
Just barely in half of the companies surveyed, the top management does not act as a role model for the digitalisation.
58% 17%
The fields of action for the digital transformation are clearly defined
Key Findings
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HR on the way to the cloud
HR is on its way to the cloud. But most companies still have a long way to go. HR cloud transformation will be a big topic in the coming years.
HR is not in the lead in digital transformation and does not see itself as having the responsibility to take the lead either.
#DriversofDigitalTransformation
39% 21% 14% 10% 7% 6% 3%
Top Management
Business Development
IT Research Chief Digital Officer
Marketing HR
80% of participants use on-premise solutions
45% in the cloud
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Companies show a higher maturity in human digitalisation — those levers that are driven primarily by the business. The field of HR digitalisation is lagging behind.
State of the Digitalisation Journey
In this survey, we set the spotlight on HR and whether digitalisation is on its agenda. The good news is that 98% of the companies have already started their digital transformation journey. However, only 2% stated that they are completely done.
#DigitalMaturityIndex
H U M A N D I G I T A L I S A T I O Nfor the whole organisation
max. score 5
3.7 3.2
H R D I G I T A L I S A T I O Nfor HR
D I G I T A L S T R A T E G Y
D I G I T A L M A T U R I T Y 3 . 5
Digital HR services 2.9
Digital HR organisation 3.3Digital
HR processes 3.5New work and collaboration 3.8Agile
leadership 3.7
Digital culture 3.9 Digital
workforce 3.6
Not started yet Just started In the middle
57%20%1%
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The distribution of HR services equals a pyramid. With increasing digital maturity, it becomes a diamond shape. Those who started their digitalisation realise their first returns with less time to spend on administrative work and more time for core services and strategic work.
#HRServices
High HR Digital Transformation Index
(highest 10%)
Low HR Digital Transformation Index
(lowest 10%)
54% 46%
27%30%
19% 24%
Completely doneNearly done
20% 2%
Percentage spent on HR administration
Percentage spent on HR core tasks
Percentage spent on HR strategy and consulting
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Copyright 2019 Mercer LLC. All rights reserved. 6009858G-CR
Interested to find out more? Contact our experts:
FRANCE Bruno Rocquemont [email protected]
GERMANY Armin von Rohrscheidt [email protected]
ITALY Alberto Navarra [email protected]
PORTUGAL Marco Gomes [email protected]
UNITED KINGDOM Davide Pediglieri [email protected]
