New PwC publication addresses challenges and opportunities in digitalising HR for Middle East companies

Dubai, UAE – 27.10.2020: PwC Middle East and SAP surveyed more than 600 executives and HR professionals from different industries and countries across the Middle East for the Digital HR Survey 2020. The purpose of the study was to better understand the steps organisations need to take to transform the role of HR into a more strategic, value-adding function. The study also included a series of in-depth interviews with public and private sector representatives from organisations across the Middle East.

Key findings

  • 72% of respondents said COVID-19 has accelerated their organisation’s digital transformation
  • CEOs are 4-10 times more likely to lead company-wide digital transformations than any other C-level or senior executives
  • Only 9% of respondents believe that their HR function is leading or innovating with digital technologies. Furthermore, 55% believe HR’s biggest contribution to digital transformation is digitalising HR processes.
  • 64% think HR should evolve into a talent developer or a change leader in the organisation and 48% believe the HR function is crucial in driving changes to mindset and culture.
  • The biggest challenges to digital transformation are mindset barriers (55%), budget restrictions (51%) and lack of understanding what digital transformation means (48%).

The unprecedented measures taken by Middle East governments to suppress the spread of COVID-19 led to mass remote working facilitated by digital technology. Some 72% of survey participants said the pandemic has accelerated their organisation’s digital transformation.

CEOs were identified as key sponsors of digital transformation and were 4 to 10 times more likely to lead their organisation’s transformation efforts than any other C-level or senior executives.

That said leading from the top is not enough. Mohammad Almughrbi, General Manager of the Directorates Integration & Shared Services Establishment Program at Saudi Arabia’s National Water Company (NWC), believes that, in the context of digital transformation, HR teams must work to support the executive team of the organisation by having a financial objective as well as an operational improvement goal for their digital plans.

The survey results show HR departments have work to do to capture the full potential of digital transformation. Only 9% of participants reported that their organisations are innovating in HR with digital technologies and 55% see HR’s biggest contribution to the overall digital transformation of their organisation as digitalising HR processes. This indicates that most HR functions in the Middle East are at the stage of using technology for efficiency and automation rather than innovation.

48% of survey respondents believe that the HR function will be expected to support the digital transformation of the whole organisation by driving changes in company culture and mindset.

Furthermore, 33% think that the future focus of HR should be developing and coaching talent as well as acting as the change leader of the organisation (31%). Using digital tools to carry out repetitive administrative tasks will help shift the focus of HR in a more strategic direction and drive upskilling.

“HR is about improving the employee experience from hiring to retirement, enhancing decision-making through AI and moving from backward-looking analysis of talent data to more advanced applications such as predictive modelling,” states Andreas Binnmyr, HR Transformation & Technology Leader at Al-Futtaim.

Digital upskilling is seen as the primary enabler of digital transformation. Bringing in digital skills from the outside and flat & flexible organisational structures are also important. On the flipside, mindset barriers, organisational culture and resistance to change, are seen as the biggest obstacles to digital transformation across the organisation (55%), closely followed by budget restrictions (51%). Our interviewees also highlighted lack of skills – organisations not having enough people with digital skills who are able to support digital transformation and maintain the systems once they are in place.

David Suarez, People & Organisation Leader, PwC Middle East: “Mindsets, culture and resistance to change are likely to be the most challenging obstacles on the road to digital HR transformation. However, the COVID-19 pandemic has already taught us that we as humans are resilient and able to change habits and ways of working in an instant. Thanks to existing digital technologies and our collective ability to embrace them, the world has managed to keep going despite the challenges. We see this as a sign that adopting new ways of working and new digital paradigms is possible and can happen in record time.”

HR functions in the Middle East have a significant opportunity and an increasing responsibility to use digital technology to support digital transformation of their organisation, as well as to further automate processes such as CV screening, assessments and training.

“About two-thirds of Middle East respondents believe that HR leaders should evolve into a talent developer and change leader, which gives HR teams a major opportunity to digitally transform,”

said Adel Lafi , Director of Human Experience Management and SuccessFactors, SAP Middle East North. “Middle East organisations that enable their HR teams to digitally transform will become Intelligent Enterprises that provide the best employee experience, support talent development and retain top talent for the long-term.”

About PwC
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 155 countries with over 284,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

Established in the Middle East for 40 years, PwC has 22 offices across 12 countries in the region with around 6000 people. (www.pwc.com/me).

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