“Disruptions driven by digital transformation are re-shaping business models and human resource structures in just about every industry.”
Businesses around the world are entering an age of disruption. Starbucks, for example, is changing its business model to accommodate payments made via mobile devices, which now account for 30% of transactions in U.S. stores. Disruptions driven by digital transformation are re-shaping business models and human resource structures in just about every industry.
Mercer’s 2018 Global Talent Trends Study – Unlocking Growth in the Human Age revealed that businesses that self-identify as a digital organisation are twice as likely to report high scores on change agility as a differentiating organisational competency.1
A continent of different nations
While the world embraces a shared and on-demand economy, many countries in Africa continue to grapple with an old and entrenched world order. In fact, many African countries prefer familiarity over change. This mindset prolongs the influence of legacy issues that impede the advancement of labour policies in Africa, and impacts the continent on every level, from political and economic to cultural and legislative.
Interestingly, the legislative policies and culture of individual countries and nationalities shape important factors such as employee compensation and reward structures. Throughout Africa there are two distinct payment structures: Francophone (which involves multiple cash allowances) and Anglophone (which is a consolidated approach including a salary, bonus and benefits).
If you compare Nigeria to Kenya, for example, the payment structures differ vastly. Nigeria’s Francophone-style market demands various allowances and remunerations based on existing practices and employee expectations, even though the nation attempted to implement legislation that would consolidate compensation through a structure based on tax benefits. Kenya, in contrast, offers few cash allowances and can be characterized as Anglophone in nature, where the salary and other benefits are consolidated.
Africa’s labour market
How will disruption affect Africa’s labour market? Ultimately, it is vital for employers to take cultural nuances into account in order to hire with purpose. According to our 2018 Talent Trends study, embedding a higher sense of purpose into the Employee Value Proposition (EVP) unlocks individual potential and spurs people to be change agents. To find purpose, employees crave professional development, learning opportunities and experimentation. If employees do not experience these motivating forces, they will look for inspiration elsewhere. In fact, 39% of South African employees satisfied in their current jobs still plan to leave due to a perceived lack of career growth and opportunity.1
Embracing the pace of change
Some countries in Africa are embracing disruption better than others. For example, Ethiopia—the second most populous country in Africa—has seen massive growth since it opened up its borders twenty-five years ago. By creating more investment opportunities, Ethiopia has attracted foreign investors who now recognise the tremendous potential that lies within the consumer market, as well as the benefits of lower labour costs throughout the country. Rwanda is another notable example of an African nation embracing digital transformation, as it continues to make significant investments in technology and transitions towards smarter cities.
According to the report, the African countries at the forefront of disruptive technologies are all being transformed by the speed at which businesses are adopting change. In fact, 96% of these businesses are planning an organisational redesign in the next two years, and 46% of HR executives are planning to reskill current employees for new roles.
Aligning skills with opportunities
The intention and ability to embrace change is vital to business ecosystems. Fifty-three percent of executives believe at least one in five roles in their organisation will cease to exist in the next five years. However, only 40% of those executives are increasing employee access to online learning courses, and only 26% are actively rotating workers within their business.1
To take advantage of opportunities that arise from disruption and transformation in Africa, nations should invest in the potential of other revenue-driving industries. For instance, previously war-torn Liberia could develop more tourism-related businesses and enterprises—following Dubai’s example, which transitioned from a primarily oil-based economy into a tourism-based economy.
Innovation and workforce skills development are critical to the future of Africa. The human capital resource strategy of “managing a pipeline of talent” is becoming obsolete as employees seek new, aspirational approaches to developing skills that are aligned with the future of business in a digital age.
Though Africa faces a number of legacy challenges, it understands the need for change. By focusing on digital transformation, the continent—and the nations that comprise it—could usher in a new era of prosperity for their economies, businesses and people.
1 Global Talent Trends Study 2018: https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html