Digital transformation: engaging employees as well as customers

By Fiona Czerniawska.

One of the unexpected results of our recent research into client perceptions in the US consulting market was how well HR firms appear to be doing in the digital transformation space.

Let’s take Korn Ferry as an example: more than 90% of US clients who’d worked with the firm (as opposed to those who know it based on reputation) had positive things to say about the quality of its work in this area. The issue, though, is that there aren’t many of these people, certainly far fewer than would rate the digital transformation services of IBM, PwC, or even McKinsey, for example. On sheer numbers, it’s possible to argue that this is a bit of a blip—yet we see other HR firms doing comparatively well. So what’s going on?

As is so often the case, clients’ perceptions of quality rise where an issue is of huge importance to them. Over the last year we’ve heard a lot from clients and consultants about the way in which digital transformation—honed to help organisations find new ways to engage with increasingly tech-savvy customers—is now being applied to another, equally tech-savvy group: employees. Some of this is building on well-established self-service HR processes, but traditional employee engagement surveys are being turned into real-time apps, and multifaceted internal comms that are light-years away from the CEO’s weekly email.  

At the moment, we calculate, the HR & change management consulting service line accounts for just 2% of the broader digital transformation market, dwarfed by the amount that’s going on within the strategy and technology service lines—but it’s potential for growth is huge. Yet, who will clients turn to, to do this type of work? What we’ve seen elsewhere in digital transformation is that CIOs, anxious to assert their business-over-technology credentials in the boardroom, prefer to use strategy firms and the Big Four; by contrast, other CXOs, because they don’t want to look like techno-dullards, will bring in technology firms. That same reversal could happen here: If we go back to our client survey data, very few of the people that rate Korn Ferry’s credentials are CHROs—in fact, CHROs would appear to be more likely to use strategy firms or the Big Four, while non-HR CXOs may be more likely to think HR specialists should be involved. What we’ve seen elsewhere—and herein lies the opportunity and the challenge for HR-specialist firms and non-HR specialists alike—is that the final decision about which type of firm to use for this kind of work is usually a compromise between these conflicting views. For HR firms, this will mean not only broadening and strengthening their relationships outside the HR function, but also convincing CHROs that they can be trusted with this type of work.

Click here for more information about our report on the digital transformation consulting market.