African companies might do well to elevate their digital channels in order to drive efficient customer service, manageable business tools, productivity and growth even as they prepare to adapt to the work environment in 2021.
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It’s no surprise that investments in the digital spectrums have increased and will continue to do so in the foreseeable future. A new age of technology is in the making and Africa doesn’t want to be left behind. Companies have been forced to develop a digital business model strategy in order to remain competitive and attractive to their consumers. The International Data Corporation estimates that a whopping $2.3 trillion will be spent by organizations on digitalization by 2023. We see this trend towards digitization in Africa accelerating significantly, with 65% of companies projecting an increase in digital spending in 2021 (as shown in the diagram below).
Digital Solutions
With the current pandemic state, employers acknowledge the significance of digitizing their systems, as the need to raise productivity in a progressively globalized world. Additionally, we see that the presence of software and technologies that enable companies to make more informed business decisions make the shift towards digitization inevitable. Globally, a recent study by Twilio reported that 97% of executives revealed that Covid-19 accelerated their digital transformation efforts.
Moreover, 79% of respondents further added that Covid-19 increased their budget for digital solutions. We expect to see this trend of embracing digital advancement even in a post-pandemic era. There have been many misconceptions on how automation in various work operations may lead to possible loss of jobs. Nevertheless, new technology can result in increased productivity that helps companies grow, which leads to increased job positions.
Fuzu, for instance, provides a set of tools that have made it easier for employers to identify and attract the best matching candidates through its digital recruitment solution. This has greatly improved efficiency in the recruitment process, the automated analysis of applicants has replaced the traditional way of shortlisting which was labour intensive and time-consuming, saving recruiters 80% of their time.
Digital enabled independent work has also increased over the years, supplementing the wages from regular 9-5 employment. With the rapid spread of technology accelerated by the pandemic, the increase in job opportunities could be an upward trend. That being said, the shift towards automation and technology warrants employers to train employees to adapt to these changes.
Future shift in digital investments
With the shift to a more hybrid working model, companies are adopting more digital solutions such as data entry and processing systems that reduce the need for as many admin/clerical employees. Despite this progress, most sectors of African societies and economies still lag behind the rest of the world in digitization. This has seen the need for employers to upskill and re-skill workers in readiness to take up potential future vacancies within the company. Research shows that employers who embrace upskilling programs are more prepared to meet evolving business needs and accommodate skill gaps within the company.
For many organizations, investment in digital transformation had been a focal point for a larger discussion about productivity and growth before the pandemic, but in recent months has been spawned by the ubiquity of remote work. In a McKinsey survey of consumers in key African economies during the crisis, over 30 percent said they were increasing their use of online and mobile banking tools. This means that consumers are craving for efficient digital solutions in sectors such as retail, agriculture, entertainment and more. Sacha Poignonnec, co-founder and co-CEO at Jumia, remarked that: “A lasting impact of the crisis could be a change of mentality to transacting and paying online. This will address one of the barriers to e-commerce in Africa.” The International Data Corporation estimates that a whopping $2.3 trillion will be spent by organizations on digitalization by 2023.
As companies adjust to a new way of working in 2021, we see an increase in investments moving more towards digital solutions. The pandemic has amplified the adoption of new technologies worldwide, and we expect to see this trend persist even in a post-pandemic era. Like various business processes in general, hiring has been vastly affected by the shift to remote work. Hiring markets and labor trends have forced HR managers to adopt new digital strategies when it comes to finding the right talent. The pandemic has forced both employees and employers to become more flexible when transitioning to new modes of working. Recruiters have thus recognized the value of having an adaptable workforce that can be relied on in the event of future changes. Aside from that, talent professionals will be required to constantly build digital skills needed to adapt to the ever-shifting hiring trends.
To enable an environment for rapid digitization, governments can ensure that all key enablers are in place to support digital adoption. For example, governments and technology companies can make sure that data is affordable and accessible to all.
In conclusion
That being said, the best interests of formal business, local pan-African investors and multinationals, is to invest in the digital transition of these businesses through procurement budgets and other enterprise-development initiatives. This will foster greater economic activity, create new markets, dent youth unemployment, and reduce the cost of capital. African companies might do well to elevate their digital channels in order to drive efficient customer service, manageable business tools, productivity and growth even as they prepare to adapt to the work environment in 2021.
About the authors
Jussi Hinkkanen is Fuzu’s Founder & CEO. He is a software and strategy expert with 15+ years on-the-ground experience across African countries. He has a proven track record from multinationals and start-ups across the globe, from building strategic partnerships across 10+ African markets and from launching B2C services to millions of users in the region. His 20+ year-long career includes notable organizations like Nokia, Microsoft & UN.
Dylan McCall-Landry is Fuzu's COO where he leads Fuzu’s teams supporting employers and institutions to find top talent. He was previously an Engagement Manager at McKinsey & Co. where he led projects across the US and Africa on organizational design, business turnaround, and strategy. He holds a MA in International Economics from Johns Hopkins University.
Muthoni Mathenge is Fuzu’s Head of Account Excellence where she supports employers across East Africa to leverage the power of Fuzu to find their next great hire. Prior to Fuzu, she was a Lead Customer Support and Retention specialist at Poa internet. She holds a Masters’ from Egerton University.
Roshelle Kayeyia is a Strategy and Operations Associate pursuing her studies in Business Analytics from The Wharton School at the University of Pennsylvania. She previously worked as a Relationship Officer at Equity Bank.
This article is part of a broader series from Fuzu’s research. This is part 4 of 8. Read part 3 here - Are Teams More Productive While Working Remotely? A Data-backed Response
