Companies Fail to Adopt HR-Tech Despite Looming Talent Challenges

Despite the increasing need for digital transformation in HR, only 35% of HR professionals believe their people management functions are utilizing relevant digital technologies according to a report by Boston Consulting Group and the World Federation of People Management Associations.

The report highlights that just 30% agree that HR is effectively using data and analytics to anticipate people challenges. With 72% citing people challenges and talent gaps as the primary obstacle, the findings underscore a significant gap in HR tech adoption, hindering proactive solutions to imminent talent challenges.

Separate research from the Massachusetts Institute of Technology, found that the use of AI tools is already raising productivity, decreasing inequality between workers and enhancing job satisfaction. In fact, 75% of respondents who implemented ChatGPT saw improvements in team morale, collaboration and collective learning.

Strategic workforce planning and upskilling are crucial have become crucial arenas for tech upskilling and the use of tech itself, yet ranked only 18th and 9th, respectively, in terms of current capabilities according to the BCG study.

"Everything's going to have an effect on culture. AI is definitely going to change a lot about jobs as we know them, but it's not going to replace core human creativity, communication and connection — all of the things that make a culture." — Anny Gutknecht, CEO of Pathways, a human resources platform.

Despite the acknowledgment of these priorities, HR leaders' current capabilities in these areas are considered weak. The report emphasizes the need for proactive investment in digital and data capabilities to enhance HR's organizational impact.

The five recommendations for HR leaders include leveraging data for talent planning, improving talent acquisition, investing in upskilling, unlocking value through AI, and focusing on change management and organizational development.

BCG suggests that the impact of the pandemic has demonstrated HR functions' ability to respond to acute stimuli, but the greater challenge lies in planning for the long-term future. By shifting focus to topics that yield medium to long-term results, HR functions can build the right capabilities to shape their company's overall people agenda differentiating.