Helping Employees Embrace the Next Wave of Digital Transformation

Helping employees fully embrace digital transformation creates a multiplier effect that enhances every aspect of business operations.

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Authors: Sarah Beech Steve Coco

The next wave of digital transformation at work is well underway, offering significant opportunities. Currently, however, most employers and their workforces aren't positioned to seize the opportunities that artificial intelligence (AI) presents in the workplace.

Technology is the primary enabler of work across all roles and industries. Digital proficiency is fundamental for workplace success. Poor technology experiences directly impact employee satisfaction, productivity and retention. This trend is accelerating as generative AI (GenAI) becomes integrated into work processes.

GenAI has already achieved critical mass since the first platform became publicly available in November 2022, at a much faster rate than any other transformative technology, including smartphones and tablets.¹ Organizations are moving quickly and prudently in this rapidly evolving environment to integrate AI and remain competitive, but challenges to adoption and barriers to entry remain an issue for many firms.

The risks and implications of GenAI

GenAI creates original content in response to a prompt. It relies on deep learning models — sophisticated algorithms that simulate the learning and decision-making processes of the human brain. These models identify and encode the patterns and relationships in massive amounts of data and then use that information to understand users' queries and respond with relevant new content.²

AI is becoming more broadly embedded at work through GenAI platforms and business applications like customer relationship management (CRM) systems that incorporate advanced AI capabilities. Early adopters have demonstrated the practical benefits of using AI in the workplace, from speeding the development of innovative new products and services to enhancing HR teams' ability to support talent recruitment, development and retention. AI-enabled digital transformation will continue to expand as the technology becomes increasingly powerful and organizations become more adept at deploying it to solve problems.

Yet despite the technology's significant capabilities, most employers are lagging in their approach to managing the associated opportunities and risks. Globally, only 29% of employers say their organizations offer guidance on when, where and/or how to use AI. Only one in five said their organization provided AI training or resources, and half reported that no one was assigned responsibility for AI within their organization.³

The nonlinear pattern of adoption is typical of transformative technologies. Organizations that wait for proof of impact will lag in the market while competitors, suppliers and customers scale the learning curve faster and innovate around them.

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One of the first things companies should do is build an AI strategy. Determine how your organization will adopt and integrate AI into your business. Then, you tell the story instead of the story being told for you by uninformed and anxious employees. Come out with a clear strategy and communicate it.

Sarah Beech, Canada CEO, Benefits and HR

Organizations that are slow to integrate AI capabilities are leaving their employees in the dark about what direction they plan to move in with the new technology. This lack of direction can create uncertainty and anxiety in the workforce, with staff feeling concerned that AI will replace or make their jobs obsolete and feeling overwhelmed with the need to keep up with changing technology. Such a mindset can hinder the rate and success of adoption.

Even if leadership ignores or underplays the AI-driven digital transformation, the reality is that employees are likely to still use AI in the workplace. Although increased familiarity with AI may provide an advantage, it also creates significant risks for the organization. Unguided and unsupervised, workers risk exposing sensitive information or relying on misinformation for decision-making.

Leadership's role in AI integration

Leadership's role in AI integration is to define the strategy, set and communicate guardrails, champion initiatives and educate their workforce. The goal should be to accelerate the organization's progress in the digital transformation endeavor faster than current and future competitors while helping to ensure the appropriate, safe and ethical use of the technology.

Leaders should treat AI integration as a critical strategic initiative. Start with a statement articulating the organization's AI strategy. Next, select a GenAI platform and core business tools with embedded AI capabilities that provide the optimal combination of security and productivity and make them the standard throughout the organization. Lastly, provide clear guidance and direction on AI use within the organization.

Managing change and overcoming reticence

Remembering that AI integration is only partly a technology challenge is helpful when executing an AI digital transformation. Fundamentally, it's about people, process and change management.

Information and strategy can help reduce fear of the unknown when it comes to AI in the workplace. Emphasize that although AI can significantly impact employment, it drives a transformation of roles rather than a wholesale elimination of jobs. Success lies in understanding how to effectively combine human intelligence with AI to create more value than either could produce alone.

Organizations and individuals embracing this digital transformation while developing distinctly human capabilities will thrive with AI. Nevertheless, change is coming to many roles, and employers need to help ensure their workforce is prepared.

Employers estimate that 44% of workers' skills will be disrupted by 2027.⁵ Many common job responsibilities will go away, including data entry and processing, basic customer service, routine financial transactions and simple administrative tasks. Conversely, a growing number of job functions are associated with AI system management and human-AI collaboration, including creative problem-solving, strategic decision-making, emotional intelligence and complex customer interactions.

Leaders must engage employees through information and experience to help them understand that their best strategy for this digital transformation is to embrace AI to help redefine their work and roles. They can emphasize the opportunity to elevate job roles by embracing technology for mundane tasks, which frees them up to focus on more strategic activities.

Consider the history of digital transformation in finance management. Finance teams long ago substituted calculators for manual calculations. As spreadsheets replaced calculators, finance professionals could spend more time on higher-value activities such as analyzing revenue and cost trends or evaluating strategic business opportunities. AI integration is likely to be a similar experience, though at a greatly magnified scale and pace of change.

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As a leader, it's important to understand what your business needs and how astute it is with technology. If your business is an early adopter in tools and technology and your people are comfortable using them, change management will be easier. If not, embracing technology and change must be a leadership-driven initiative. Otherwise, you'll be left behind. It's that simple."

Steve Coco, global managing director, HR and Compensation Consulting

Investing in employee technological experience

Finally, leaders need to address attracting, developing and retaining the talent pool required to thrive in the AI-enabled world. Training will be essential, aided by an emphasis on learning and development. Leaders can't expect employees to innately understand how to integrate AI into their work and leverage the new capabilities. Investing in employee training on AI literacy, change management and human-AI collaboration can help workers adapt to — and thrive in — an increasingly automated workplace.

Prioritizing the employee technology experience creates a fruitful cycle: Better tools lead to happier employees, which results in better performance, justifying further investment in technology and AI capabilities. Such a cycle creates a sustainable competitive advantage that benefits the organization and its workforce through a period of change and adjustment.

When employers fully embrace and invest in a digital transformation and their employees' technological experience, it creates a multiplier effect that enhances every aspect of their business operations. The returns on that investment include productivity gains, cost reduction, accelerated innovation and growth, plus greater employee satisfaction and retention.