The War for Digital Talent is Real and It's Here, in Latam

Currently, a battle is taking place in the world that is often invisible to us. We are talking about the war for digital talent, which is real, and a matter of survival for companies. Those winning it are finding creative ways to upskill, reskill and redeploy their existing talent. 

This in a context where the rate of digital transformation has accelerated at a record pace since the onset of the pandemic. As the world went into lockdown, the need for digital solutions grew exponentially, creating new roles and skill sets along the way. 

An Atlantico report reveals a greater perspective of these changes in Latin America, where:

• Digital adoption has transformed the everyday life of the region’s population, from watching videos, to accessing online banking, purchasing products online and using social media.

• Internet penetration has surpassed that of China and India and is approaching that of developed economies.

Both trends generate a fertile ground for digital initiatives on all fronts. Nevertheless, what companies are starting to realize is that digital transformations are not about technology; they are about talent. Namely: you can pretty much buy any technology, but your ability to compete comes down to one thing: having the right talent. 

In this paradigm shift there are three key takeaways that we at Kurios have learned by supporting multinational companies in the region and working with worldwide digital experts from global tech companies, such as Amazon, Google, Uber, Stripe and Dropbox: 

• Given the mentioned digital trends: Digital solutions are becoming the fastest-growing source of revenue for companies. 

• To fully capture the digital opportunity, companies are starting to realize that they need the right digital talent in place.

• The problem is that this talent is very scarce in the region (and worldwide), and the war for digital talent is real, fierce, and a matter of survival.

Digitalization of Companies

Depending on the level of the digitalization of the company, digital initiatives can represent up to 70 percent of total revenue. Indeed, at a worldwide level, we see the pool of digital revenue increasing every year, projected to be a plus US$60 trillion market by 2025. Many companies in the region from industries like banking and financial services, retail, CPG, food and beverages, insurance, and health are developing entirely new digital products and channels to boost the revenue contribution from digital sources versus analogues.

Some companies are going even further and developing digital ecosystems, enabling users to fulfill multiple needs on a single platform. Worldwide leading companies are increasingly offering an interconnected set of services — from Alibaba offering a broad ecosystem of lifestyle services (including retail, payments, credit scoring), to Apple launching an AppleCard with Goldman Sachs (expanding on ApplePay), and BMW/Daimler creating a shared mobility ecosystem with a number of startups (Car2Go, moovel, Mytaxi) under the Your Now brand.

But the digital ecosystem is not a strategy that can only be implemented by Amazon or Apple. It is being replicated by more nontech companies across the region. In particular in Latin America, traditional banking and retail players are developing digital ecosystem initiatives to remain leaders of highly disruptive industries. For example:

• In banking, Bancolombia’s vision is to become the marketplace of choice for financial services and products. As part of this vision, it has launched a wide range of solutions, including payments with wompi and nequi, banking and loans with A la Mano and Sufi, mobility with muverang, and marketplaces for housing and car purchases with tu360. The results of these initiatives have increased Bancolombia’s customer base, currently serving over 5 million users with A la Mano and more than 10 million clients with Nequi.

• In retail, Walmart’s vision is to become the omnichannel retail ecosystem in Central America and Mexico. To this end, it has also launched a wide range of digital solutions, including Walmart Pass, Cashi app, Walmart Connect, Sam's Club app, and an e-commerce platform. 

But … the Talent Is Scarce

So, to truly succeed in the digital era, leaders are understanding that talent is fundamental. Nevertheless, the problem is that this talent is very scarce in the region (and worldwide), and the war for digital talent is real, fierce, and a matter of survival. Seventy percent of companies in Latin America report a shortage of digital talent. Stealing digital talent across companies has become the rule across the world. However, traditional companies often fail to compete in the war for digital talent due to reputation, lack of career paths or competitive salaries, or lack of attractiveness for digital talent.

In fact, the shortage of digital talent in Latin America is 48 percent today, and it’s expected to double in the next several years. At Kurios, we believe that the problem is even bigger because reports are only taking into account digital “technical talent” but are missing the “digital business talent,” which is the other half of the problem, and something we will talk about in a future article.

Companies need to get creative to find this talent. Our customers in Latin America often share that hiring processes for business digital talent may range from six to 18 months when finding someone. Hiring managers tend to over-index on the specific industry skills and experience that a person needs to perform a role. However, companies around the world are proving that what truly determines the ability for a person to succeed in their role is their ability to learn and adapt to changing environments. The rest can be learned on the job through formal and informal training.

What Is the Solution?

Those winning the war are finding creative ways to upskill, reskill and redeploy their existing talent. Leading companies around the world are investing massively to win the shortage of digital talent and become competitive. For example, AT&T, a leading telco, is investing US$1 billion to retrain nearly half its workforce for jobs of the future. JPMorgan Chase, a leading bank, is investing US$350 million in its Global Investment in the Future of Work. Even Amazon, a digital-native tech company, is investing US$700 million to retrain a third of its US workforce by 2025.

Thus, re-deploying, upskilling, and reskilling are the new allies in the game. Nonetheless, sometimes these three terms are used interchangeably, or, in other cases, actually have different meanings and purposes. These are our definitions:

• Redeployment. When an employee's role is changing or going away and we move the person to a different position for which the person already has the knowledge.

• Reskilling. When an employee is building a new skill to move forward in their career path or to be able to perform in a different role.

• Upskilling. When an employee is improving their skills or taking them to the next level to boost the outcome in the current role.

One Final Look

The war for digital talent is real and it is not going anywhere. But, as we can see, in this phenomenon there are a series of key, strategic differentiators that can help companies in the region to go through the digitization of their talent in a good way. After all, and as we argued, the first part of a good defense system in this battle is to understand that digital transformation today is not about cold technology, but about the human talent behind it.

Thus, the question for every company today should not be what tech tools it has, but rather what alternatives it has to promote its talent,  talent that is obsessed with customers, with developing successful digital products, with boosting digital revenue and retention of their customers. Today more than ever, companies around the world are discovering that what really determines a person's ability to succeed in their role is their ability to learn and adapt to changing environments, where learning on the job through digital skills training is the best weapon. And if your company has an effective digital workforce, that is a truly competitive advantage.