A global pandemic. Increasing demand for globalization. Climate change. The rise of generative AI.
Since 2019, business leaders have faced an unprecedented high rate of change—183% over the past four years and 33% in the last year alone, according to the Accenture 2024: Pulse of Change Index C-suite survey. The Accenture survey reveals that 88% of C-suite leaders expect an even faster rate of change in the future. And this has some CEOs worried. In fact, 45% of CEOs fear their businesses won’t be economically viable in the next decade, as highlighted in the 27th Annual PwC Global CEO Survey.
So, what’s been the top strategy for handling these changes while creating value for customers and shareholders? Digital transformation (DX).
TEKsystems’ State of Digital Transformation 2024 report shows that 84% of business leaders use digital transformation to navigate change, lower costs, and improve customer experience. Companies invest big bucks to enhance efficiency, agility, and resilience while gaining a competitive advantage amid evolving business conditions and economic uncertainty. Worldwide expenditures on digital transformation are expected to reach $3.4 trillion by 2026 and $3.9 trillion by 2027.
But digital transformation can only get you so far.
Moving beyond digital transformation to total business transformation
Most of these efforts fail to achieve lasting results. Only 31% of businesses that invested in digital transformation (DX) achieved the anticipated revenue boost, with the cost savings being only a quarter of what was forecasted. Just 12% show long-term success, a statistic that hasn’t changed in 20 years.
So, what sets the leaders apart? Integrating digital transformation into a broader business transformation strategy to drive ROI and breakthrough value.
Seventy percent of CEOs believe business transformation is essential for their company’s future survival. Harvard Business Review reports that over a third of large organizations are always running a transformation program, starting new initiatives frequently, and 89% of large companies worldwide are currently pursuing digital and AI transformations.
Yet Accenture’s Total Enterprise Reinvention report shows that just 8% of companies dive into total reinvention. The majority—86%—only tackle bits and pieces, treating transformation like a one-time project rather than an ongoing journey.
Even so, most companies neglect to transform one area key to catapulting a culture of business reinvention: human capital management (HCM).
A successful business reinvention strategy starts with human capital management
Creating a corporate culture capable of responding to market changes, continuous business reinvention, and pivoting to new business models requires a flexible talent model capable of expanding your workforce beyond borders. Human capital management as a whole, with its processes, workforce models, and overall spend, is the last area leaders consider requiring total change. Yet, according to Accenture, a robust digital core powered by an agile talent and people impact strategy should be the heart of your business strategy.
So, what do you need to do to reinvent HR so you’re ready to pivot your reinvention strategy?
1. Make change management a core competency
To effectively implement reinvention as a corporate strategy, you will need the expertise of your CFOs and CHROs. Their skills are crucial for developing a smooth and efficient change management process, which is increasingly important as companies are forced to pivot to new operating models and launch new revenue streams. CHROs can help you drive an agile workforce strategy capable of upskilling current employees, quickly bringing on new talent, and keeping costs low. Your CFO will help you find the optimal balance between reducing costs and investing in growth.
2. Bring in expertise and forward-thinking talent
To reinvent how you go to market, operate, partner, and create value, you’ll need skilled professionals capable of enhancing your organization’s decision-making and agility. Whether your reinvention strategy involves bringing in AI, big data, or cloud expertise, you need a proactive approach to finding the right talent to enhance your team’s skills. Recognize that this may mean recruiting individuals with technical, analytical, and strategic abilities to benefit your team and the entire organization.
However, skills shortages are a top challenge for many companies. Eighty-three percent of HR leaders report difficulties finding talent with the necessary skills, while 57% believe that skills shortages hinder their capacity to maintain corporate performance. What’s the solution? Going global to expand your talent pool.
Most companies hire contractors through local agencies or set up their own entities to accomplish this. But, forward-thinking executives know there are faster and lower-risk ways to expand their workforce. They rely on human capital management platforms, like Velocity Global’s Employer of Record (EOR) solution, to compliantly hire, pay, and manage talent and employee benefits without setting up and managing a local entity. This can help CHROs deliver HR value at a lower cost to meet financial demands and give executives the talent pool they need to achieve the company’s reinvention goals.
3. Evolve infrastructure for the borderless workplace
Gartner reports that 70% of employees will consider leaving their company if it doesn’t offer flexible work options. To stay relevant, companies must explore and invest in ways to attract and retain high-performing employees and talent.
Global mobility has become vital to creating international business success. Providing employees with opportunities to work abroad helps companies attract top talent, enhance workforce diversity, and secure a competitive edge, especially during economic uncertainty.
One example of global mobility is when your company temporarily assigns an employee to a foreign branch office to train local staff in specific skills or practices. Another example could be sending talent overseas for long-term projects or permanent relocations. Your company reaps the benefit of having proven, experienced talent tackle business challenges locally while your employee or consultant enjoys life abroad.
Yet, according to Vialto research, only 45% of companies have an infrastructure set up to support hybrid or remote-work arrangements. Of those surveyed, 51% are using an infrastructure that can have potential misclassification risks.
Managing global workforce mobility requires navigating convoluted immigration, employment, and tax regulations across various jurisdictions, each carrying substantial compliance risks. This can hamper other employment incentives, such as global mobility.
With expert talent in high demand, companies must be adaptable to diversified work contexts and look for ways to think creatively and optimize their employee experience.
Hire anyone, anywhere, with a world-class partner
Hiring across borders, boosting your total rewards offerings, and setting up a distributed workforce may seem like no small feat—especially during these uncertain times. Having the right partner makes all the difference.
Velocity Global has helped over 1,000 brands hire, pay, manage, and offer benefits to talent in over 185 countries since 2014. With the right mix of easy-to-use global HR management technology and unmatched human support, we have the expertise and solutions to help you hire anyone, anywhere—during uncertainty and beyond.
Reach out today to find out how we can help you hire the world’s top talent and keep them happy—without adding to your workload.
