Dive Brief:

• Employers' digital transformation efforts for 2019 are being hindered by reduced budgets and sluggish talent acquisition, according to a new report by The Hackett Group. The IT service company's survey of 150 executives in the U.S. and abroad found HR operating budgets could shrink by 0.2% year-over-year, with headcounts potentially seeing a similar decline by 0.4%. However, a majority of respondents nevertheless expect to see digital transformation make an impact within the next two to three years.
• Most HR operations are behind in developing executives who can lead workplaces in flux, the report said, and development areas like resolving skills shortages and retaining employees may not receive the attention they need. Moreover, only about one-third of respondents said their organizations have used digital transformation to improve their performance and service delivery.
• Executives in the survey expect the speed of technological adoption to increase, with the greatest gains being in enterprise resource planning platforms, robotic automation, and virtual digital assistants and chatbots. Respondents' priorities for improvement include recruitment and development, supporting enterprise digital transformation, supporting customer-centric initiatives and addressing critical skills.

Dive Insight:

The Hackett Group's report is one of many on HR's priorities for 2019 and, taken together, these reports indicate several challenges lie ahead for the profession. For example, HR leaders are aware of the evolutionary impact a digital transformation will have on their organization but recognize they are set back by the lack of sufficient resources. This might explain in part why one-third of employers in a recent Telstra study don't have a digital transformation plan.

Talent shortages could also strain employers well into 2020. An XpertHR study said finding quality talent will be HR's biggest priority this year, yet 64% said sourcing such applicants was "very or extremely challenging." Efforts to solve the problem include upping benefits workers say they value, like flexible work schedules and paid family leave. Of course, some employers are also offering higher pay, but workers in several surveys have cited factors other than pay as reason to take a new job.

The Hackett Group pointed out in its report that HR professionals can't execute enterprise initiatives alone. As previous research has shown, digital transformation initiatives require support and buy-in from many levels of an organization in order to be successful.