The rate and scope of digital transformation in HR departments is both accelerating and broadening. In addition to improving human resources processes through automation, modern HR departments are largely responsible for driving digital transformation at the organizational level. Not only that, they also must do it in a way that is simple, relevant, and appealing to an increasingly complex range of stakeholders.
What does digital transformation mean for today’s organizations, and how they can start? What are common HR digital transformation examples?
HR Digital transformation
Digital transformation is a methodology that organizations use to implement automation into their business processes. For HR departments, historically this meant focusing on process design and scalability to achieve uniformity in HR practices. Contemporary HR departments, however, are tasked with a broader range of responsibilities. In addition to optimizing their department’s business processes, HR also needs to focus on optimizing employee productivity, teamwork, and facilitating professional growth.
These new HR demands are described in a 2017 report by Deloitte Insights. According to the report, HR’s focus has shifted towards “building the organization of the future,” causing them to hire “young, digitally savvy workers,” to produce an “integrated, digital experience at work – one designed around teams, productivity, and empowerment – and HR is expected to deliver it.” In other words, HR is no longer just about HR, it encompasses organizational processes as a whole.
The increasingly important role of digital transformation in HR is something that business leaders and chief HR officers are well aware of. According to a Gartner report, some 88% of chief HR officers reported that they need to invest in at least three technologies over the next 2 years. While 2 out of 3 business leaders went as far as to say that if they did not implement digitization their organizations will no longer be competitive. So, the need for digital transformation is clear but how does HR go about implementing it?
Implementing HR digital transformation
Excited by the prospect of introducing new automation technologies or feeling pressure from competitors that have already embarked on their HR digital transformation journeys, organizations will often attempt to rush the process. This is a major mistake that can lead to bottlenecks in workflows and significant declines in productivity. Automating an already broken or inefficient process will make it worse. Prior to introducing any new technology into existing processes, organizations must spend time building, planning, and testing its workflows. Business process management (BPM) software is incredibly useful and intuitive in this regard.
An important aspect of this initial planning phase is determining why you want to introduce HR digital transformation into your organization and what you hope to achieve. Spend some time talking over ideas with your team and put your goals on paper to facilitate action and measure success. In most cases your goals will relate to improving one or more aspects of the employee experience.
Like Rome, HR digital transformation cannot be accomplished in a day. The key is to start small with a specific outdated and/or inefficient HR process. This minimizes the impact to existing HR processes and employee productivity while giving the organization an early win to build confidence and pave the way for future success. A good rule of thumb is to start with an HR process that offers a large benefit with relatively low effort and risk.
Digital transformation in HR is an ongoing process that requires assessment and continued reflection. Before rushing to the next process, spend some time collecting and analyzing data to see what works and what does not. Most importantly, remember that digital transformation in HR involves more than just introducing some trendy new technologies. It requires a commitment from everyone within an organization to embrace automation as a means of achieving operational efficiency.
HR Digital transformation examples
Most jobs that are repetitive can be automated. Organizations use digital technologies to automate a broad array of HR processes. These include things like employee onboarding and offboarding, validating and tracking timesheets, leave requests, employee training, and managing benefits. In this section, however, we will look at two examples of digitization in HR processes in more detail: AI recruiting analytics and performance management.
AI recruiting analytics
Regardless of the state of the economy, Human Resources departments are overwhelmed with recruiting tasks. In times of low unemployment, employers must actively pursue and engage suitable candidates or risk losing them to a competitor. Where there is a lack of jobs, HR teams are overwhelmed with an influx of job applications from candidates desperate for work. Automation like artificial intelligence (AI) can streamline these processes while allowing organizations to make more informed hiring decisions through the collection and analysis of data.
Modern recruiting and hiring processes are substantially different than they were in the past. It was not long ago that recruiting consisted of collecting and sorting through large stacks of resumes. HR teams would set up interviews with those candidates that seemed qualified, perhaps save a few resumes for future openings, and throw the rest in the trash.
Today, the data that HR departments collect from candidates is an extremely valuable asset. Using AI, HR departments can make sense of large datasets allowing them to carefully target their recruiting efforts and make better hiring decisions. Consider that a bad hire can cost an organization to incur a significant financial loss. By analyzing factors like how well an employee will fit into a role and how long he or she is likely to stay with the organization, recruiters can make better decisions and minimize risk.
It is also worth noting that by automating repetitive and time-consuming tasks, recruiters have more time to conduct proactive hiring and spend more time with candidates to identify better fits.
Employee performance management has historically been an inefficient HR process, requiring the manual collection and review of evaluation forms. Automation not only removes these tedious paper-based processes but boosts productivity and retention through goal setting, better feedback, and more training opportunities.
Setting and communicating goals with employees is a key aspect of successful performance management. With automation, employees and managers can easily keep track of accomplishments in a performance management system. Tracking performance data helps HR departments to identify bottlenecks in workflows. With automation, notifications and reminders can be sent to both employees and managers to facilitate the completion of important milestones.
When providing feedback, an HR automation system allows managers to deliver more informed and targeted feedback. With access to more data, managers can also identify individual employee training needs. This not only improves productivity but encourages professional growth, an important role for modern HR departments.