Digital transformation is imperative to all businesses in today’s dynamic era. Companies are rethinking their operations and strategizing models to further their progress. Every business is turning towards more agility in every vertical – marketing, finance, or even HR.
In general, digital transformation defines the integration of technology in business processes. It fundamentally changes repetitive operational tasks with automation and a data-driven approach. Such a revolutionary change displays a positive difference in the organization’s business culture and mindset from its competitors.
Digital transformation is now even transforming Human Resource Management as a vertical. More and more companies are digitizing their HR processes today. With remote working worldwide due to the coronavirus pandemic, businesses are tailoring solutions to enhance employee engagement while everyone is working from home.
To get on the trend of digitizing your HR department, we bring you a complete guide to drive you through various aspects of HR digital transformation. Here’s a glimpse of what we will cover:
- What is HR digital transformation?
- Why adopt HR digital transformation?
- Challenges to deploy digital transformation strategy
- Four stages of HR digital transformation
Let’s dive deep:
What is HR Digital Transformation?
Table of Contents
HR digital transformation optimizes critical HR functions such as recruitment, payroll and compliance management, talent management, etc. Such a change helps save time for HR professionals by automating monotonous tasks. HR staff can then utilize their times better to strategize business outcomes better.
And the best part about HR digital transformation is that they are data-driven, which makes it a practical, realistic, and reasonable move to stay abreast with the timeline of HR trends.
Leading companies like Twitter, Cisco, IBM, Google, and others, have introduced HR digital transformation to leverage digitization and improve their employees’ future. And this has become possible conveniently due to the SMAC (social, mobile, analytics, and cloud) technologies.
‘The Why’ – Benefits of Deploying HR Digital Transformation
Today’s HR department has moved far north from just hiring staff. It is now recognized as the company’s mothership, determined to lead the way into a broader digital transformation agenda. For both the employees and the organization, digital HR has the following benefits:
- Encourages digital culture, thereby improving better collaborations
- Increases agility & productivity
- Saves time and money
- Manages resources better
- Provides data-driven insights
- Leads to transparent performance evaluation based on analytical insights
- Less operational dependency as it incorporates AI and cloud-based technologies
- Better and integrated employee experience
These benefits are just the tip of the iceberg of values and benefits that HR digital transformation has provided. As highlighted in a Deloitte report from 2017, the HR vertical is being pushed to take up more prominent roles. The HR department is now an essential division in helping organizations move into the digital realm.
Challenges Towards HR Digital Transformation
Deploying digital HR software in the organization appears to be the need of the hour due to the prominent solutions it delivers. However, most of the leading organizations face multiple challenges adopting it. And the most common among these are the unclear objectives of introducing HR transformation and finalizing the process. Other prominent challenges involve:
Challenge 1. Changing the essence of the company’s values
The first step to incorporate HR digitization is introducing a digital-savvy organizational culture/structure. It makes things easy for employees to adapt to new digital solutions.
How to resolve it?
- Communicate about the change
- State the importance of collaboration, agility, and benefits of HR digital transformation
- Organize various training and conferences to bring everyone on the same page
- Give freedom to employees to freely use digital means.
Challenge 2. Reshaping the Concepts of Management and Stakeholders
When something new is introduced in the HR department, the entire organization witnesses shufflings regarding management styles and processes. This also becomes a prominent reason for managers not to get acquainted with new ways of incorporations.
How to resolve it?
- Train the managers with effective management styles
- Introduce flexible and innovation-oriented approach towards every employee
- Reconsider the stringent hierarchy
Challenge 3: Transforming the On-going HR Processes
Building a new culture in an organization is a difficult task. Similarly, with HR processes, the main job is to adjust the procedures according to the new business strategy. Hence, the department needs fundamental changes to adopt the agility that comes with the plan.
How to resolve it?
- Simplified processes
- Reward scheme for innovation & better performance
- Digital Orientation
Four Stages of HR digital Transformation
No company can bring changes in their HR operations overnight. Since HR digital transformation is revolutionary itself, it requires meticulous planning and strategizing. The logical step, to begin with, would be changing the core HR fundamentals and essential operational responsibilities.
The objective is to improvise efficiency and reduce cost. Follow the below mentioned step-by-step process to incorporate HR digital transformation successfully:
Stage 1: Strengthen Core HR functions
The first stage is to streamline and automate the HR functions to benefit the organization. It is a pivotal stage that requires an in-depth understanding of HR objectives and necessary HR tools to attain adaptability.
Stage 2: Introduce Data-Driven HR Decision-Making
The use of HR Analytics is pretty standard these days. It helps in data-driven decision-making across the employee lifecycle, from recruitment, talent management, employee engagement to payroll and compensation management. Thus, it improves productivity and employee performance. Such centralized data helps organizations understand the needs and requirements of employees.
Stage 3: Creating a Flexible Workforce
Most organizations are adopting remote working these days. Despite brainstorming from homes, organizations have realized the power of virtual collaboration to lead new strategic roadmaps. Thus, taking care of a flexible/remote workforce is one of the main pillars of any organization’s human resource management.
Consequently, HR processes need to evolve to accommodate virtual workforce planning. The risk associated with succession planning, learning, and development should be appropriately identified to guide its overall strategy & operations.
Stage 4: Make Employee Engagement & Collaborative Learning a Common Ritual
Employees don’t just want a career anymore. They want a great working experience and be engaged in their work in line with the company’s vision. As the diverse workforce changes its work realm, HR must continue to find new ways to keep their employees committed to the company.
HR can think of creative ways to strengthen the employees’ mental and emotional connection towards their workplace in the face of adversities. Software such as Fond, OfficeVibe, Kudos, and many others, can come in handy while planning employee engagement activities.
Similarly, upskilling a diverse workforce is a must for organizations while digitally transforming the system. It helps in simplifying the planned execution and embraces the disruption caused. Hence, HR must find innovative ways to achieve business goals under suitable methods that appeal to all the employees working from different corners of the globe.
Closing Thoughts
Business technologies have always stayed ahead of the curve while the companies try to catch up to it. By not embracing the pace can become one of the reasons why digital transformations fail in an organization.
As an HR professional, you can either lead the way for your company’s employees while going through a digital transformation or stay aware of the challenges you face while adopting it.
Is your organization ready to leap towards HR digital transformation? Have you undertaken any digital transformation in your HR department yet? What challenges did you face? Let us know in the comments below.