There are three main ways to address the shortage of DX human resources:
・Develop internal human resources
・Recruit DX human resources from outside the company
・Use external DX human resources as a service
In Japan, as DX promotion is progressing at a rapid pace under the initiative of the Ministry of Economy, Trade and Industry, there is currently a shortage of human resources with the specialized knowledge needed to promote DX in companies and other organizations.
For many companies, “lack of human resources” is a more serious issue than “funding” in DX.
As the “cliff of 2025” approaches, DX initiatives are essential to avoid economic losses and strengthen competitiveness both domestically and internationally.
Therefore, in this article, we will introduce ways to deal with the shortage of DX human resources.
table of contents
- Once again, what is DX (digital transformation)?
- Reasons why there is a shortage of DX human resources
- How to deal with the shortage of DX human resources
- summary
Once again, what is DX (digital transformation)?
I think the number of opportunities to see and hear about “DX” in the media has increased considerably, but let’s once again review what DX (digital transformation) is.
Digital transformation is the concept of “transforming” products, operations, customer experiences, employee experiences, etc. by making full use of the latest digital technology. In Japanese, it is translated as “digital transformation.”
The key point is not just to introduce technology, but to utilize it to transform something that already exists.
DX is essential to avoid the “2025 cliff”
The “2025 cliff” was mentioned in the ` `DX (Digital Transformation) Report – Overcoming the IT system “2025 cliff” and full-scale deployment of DX” released by the Ministry of Economy, Trade and Industry in 2018.
The “2025 cliff” refers to the economic loss of up to 12 trillion yen every year from 2025 onward, as a result of not being able to realize DX due to various IT-related issues that will be concentrated around 2025, including the aging of legacy systems. It is the possibility of occurrence.
DX initiatives are essential to avoid economic losses and to strengthen competitiveness both domestically and internationally.
Reasons why there is a shortage of DX human resources
To tackle DX and realize change, human resources who can take on leadership roles are essential.
However, in organizations that have not yet started working on DX, there are many cases where there is a lack of DX human resources to promote it.
So, why is there a shortage of DX human resources?
The following three points are cited as reasons:
Because manpower is required to extend the life of legacy systems
Many Japanese companies spend a great deal of effort updating and maintaining legacy systems that have been in use for a long time.
Legacy systems have been used for many years with added functionality, and as a result, they often become overly complex and become “black boxes” whose structure is unclear to both users and vendors.
For this reason, even if you want to renew it, you cannot afford it.
Additionally, low compatibility with new technologies hinders technology adoption.
Due to these circumstances, the lifespan of legacy systems is being extended and hindering DX.
Additionally, maintaining legacy systems is complex, difficult, and time-consuming. This takes a lot of effort from engineers, which takes up the time and effort spent on DX.
The aforementioned report also points out that a major factor behind the “2025 cliff” is the amount of manpower required to maintain legacy systems.
Supply is not keeping up with the rapid growth in demand for DX human resources.
The wave of digitalization is progressing rapidly, and the demand for DX human resources is increasing rapidly.
However, the number of DX human resources has not increased rapidly in line with this, so the supply is not keeping up.
In particular, DX personnel are required to have advanced digital and business knowledge that goes beyond information system operation, which is required of traditional information systems departments.
For example, there is an overwhelming shortage of digital human resources who know of cutting-edge technologies such as data science, AI, and cloud computing, as well as business knowledge that allows them to participate in the management strategy stage.
In Japan, IT human resources and DX human resources are unevenly distributed in the IT industry.
In Europe and America, many IT engineers belong to user companies. This is because many companies in Europe and the United States position digital technology as the core of their business strategy and use it as a source of competitiveness, and are actively working on in-house production of DX, software development, etc.
In other words, in Europe and the United States, DX talent is widely distributed among user companies, and each company is also active in recruiting and training, creating an environment that facilitates the production of DX talent.
On the other hand, in Japan, IT engineers are unevenly distributed in specific IT industries, and their mobility to other industries tends to be low.
This is because Japan’s corporate culture often relies on external experts and has not made much progress in the in-house development of digital technology.
Reasons include limited career paths across industries and a low level of understanding of digital technology in non-IT companies.
For this reason, many user companies are looking for DX human resources, but are unable to acquire them.
How to deal with the shortage of DX human resources
So, what can we do to overcome this situation and acquire DX talent?
There are mainly three methods:
If possible, use a combination of methods instead of just one.
Develop internal human resources
One of the most basic ways to address the problem of DX talent shortage in Japan is to actively develop existing employees.
Specific methods include:
– Enhancing in-house training programs
– Encouraging participation in external online courses
– Encouraging the acquisition of qualifications
.
The advantage is that you can have someone who knows your company’s business well and who fits the company culture take charge of DX.
The disadvantages are that it takes time and that you may not necessarily reach the desired skill level.
Services aimed at developing DX human resources are also emerging.
In addition to digital-related skills, we also need a perspective on preparing programs to improve business skills. Let’s provide a system and environment where people can improve their skills that match their company’s DX hopes and direction.
Hire DX talent from outside
In cases such as “there are no employees within the company with the qualifications to become DX personnel” or
“We are not confident that we can provide training opportunities
,” recruiting new DX personnel from outside can help alleviate the labor shortage. This is an effective means to resolve the issue.
Specifically, we can consider
hiring new graduates through collaboration with universities and vocational schools
, mid-career hiring of experienced professionals
, and contracting with freelancers with specific skills.
By hiring new human resources, you can expect to bring new perspectives and skills into your company and accelerate DX promotion.
The advantage is that there is a high possibility that you will be able to work immediately after being hired.
The disadvantage is that it takes time and money to acquire human resources who fit the company’s culture in a seller’s market. In the worst-case scenario, even if you apply for a job, you may not be hired.
Use external DX human resources as a service
In addition to directly hiring DX personnel, there are other ways to utilize external experts, consultants, and DX promotion services.
Examples include:
project outsourcing
, use of consulting services in specific fields
, use of staffing services
, etc.
The advantage is that lead time is short and DX can be started quickly.
The disadvantage is that it is expensive if you consider the medium- to long-term approach.
It is best to use it in conjunction with internal human resource development and external recruitment.
summary
As mentioned above, the lack of DX human resources is a major barrier to companies promoting DX.
To solve this problem, specific strategies and implementation are required to secure and develop DX human resources.
An effective measure against the shortage of DX talent is to make the most of internal and external resources and take a multidisciplinary approach. It’s important to expand skill sets through in-house development, bring new perspectives to the table by hiring new talent, and ensure work readiness by leveraging external expertise and services.
By solving the shortage of DX human resources through these measures, companies will be able to accelerate DX and realize sustainable growth and innovation.
Also, although it is not a method to directly acquire DX human resources, as DX human resources are in short supply, we would like to use a low-code development platform to build and change systems while freeing up the hands of engineers.
Low-code development is a method that allows you to build most of your system by combining pre-prepared components. The time required for system construction can be significantly shortened.