Digital Talent Capability: Developing the Talent Needed for Digital Transformation

December, 2022

Enterprises and IT service providers across industries are facing talent shortages. This is leading enterprises and service providers to invest in digital technology-related capabilities and initiatives to develop relevant skills in their workforce. The push for faster digital transformation has forced companies to increase their IT and digital spending, with more than 71% of enterprises increasing investment across digital technologies. With a surge in IT outsourcing, service providers are supporting enterprises by growing their digital talent pipeline. However, multiple talent-related challenges continue to persist.

These emerging trends are covered in Avasant’s Digital Talent Capability 2022–2023 RadarView. The report provides a view into major technology, outsourcing, and talent-related trends shaping the market and presents recommendations to service providers on how to build digital talent capabilities to support enterprises in their digital transformation agendas. It takes a close look at the leaders, innovators, disruptors, and challengers in this market.

Avasant evaluated 34 providers using three dimensions: digital strategy and talent capabilities, talent transformation, and talent investments and innovation. Of these, we recognized 20 as having brought the most value to the market during the past 12 months.

The report recognizes service providers in four categories:

    • Leaders: Accenture, HCLTech, Infosys, TCS, and Wipro
    • Innovators: Capgemini, Cognizant, IBM, NTT DATA, and Tech Mahindra
    • Disruptors: Atos, DXC, LTI, Mindtree, and Zensar
    • Challengers: Birlasoft, Coforge, Happiest Minds, Mphasis, and Stefanini

Figure 1 from the full report illustrates these categories:

MoneyShot Digital Talent Capability 2022 2023 RadarView 1030x687 - Digital Talent Capability: Developing the Talent Needed for Digital Transformation

Avasant defines digital talent as skills, skill sets, roles, and profiles spanning the next generation of skills that help in implementing a successful digital transformation program.

“The need to harness digital skills to sustain with the rate of digital transformation is pushing enterprises and service providers to reinvent the current workforce,” said Renée Lahti, distinguished Avasant fellow. “The key is to offer continuous skilling and build new talent streams to fuel innovation and drive business agility.”

The full report provides a number of findings and recommendations, including the following:

  • Tap into diverse talent pools using newer ways of hiring digital talent:
    • Service providers should scout for new mechanisms to hire digital talent and tap into diverse talent pools to fulfill project-based requirements.
    • They should focus on building sustainable alternative talent streams to help bridge the digital skills gap.
  • Enhance the digital skills of the workforce through continuous reskilling/upskilling:
    • According to the World Economic Forum, 94% of business leaders expect employees to pick up new skills on the job by 2025, compared to 65% in 2018. Reskilling and upskilling remain cheaper options than external hiring.
    • Providers should create a skill map and resource plan to reskill and upskill their existing tech talent for digital roles and prioritize skill testing for applicants and new hires.
    • They should use new learning and development tools that utilize microlearning and immersive learning to improve learning experiences.

“There is a need to effectively address the unprecedented demand for digital skills,” said Shwetank Saini, Avasant research leader. “Service providers must reconfigure their talent strategies by tapping into new talent pools and developing local talent and scale up their reskilling and upskilling initiatives to maintain a competitive edge.”

The full report also features detailed RadarView profiles of the 20 service providers, along with their solutions, offerings, and experience in assisting customers in digital transformation.

This Research Byte is a brief overview of the Digital Talent Capability 2022–2023 RadarView™ (click for pricing).