The use of modern technology is changing Human Resources (HR), pushing traditional approaches to the sidelines. Companies are increasingly automating their HR processes and bringing about data-driven digital transformation.
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The pandemic has further accelerated the adoption of HR software to adjust to the new norm of remote working. There’s a clear need for digital human resource management to streamline activities and improve employee experience.
In 2021, 52% of HR leaders polled by Gartner expected a shift from planning work for efficiency to creating work that can be flexible.
With digital transformation, HR teams' responsibilities has increased exponentially. Nowadays, they are not just responsible for basic tasks like hiring, onboarding, retaining, etc. They are responsible for enhancing employee experience and bringing automation as required. HR software will be of utmost importance here as it will automate administrative tasks and provide valuable insight when formulating strategies.
However, there are still a few companies that have their reservations regarding tech intervention.
In light of our continuing remote work, these companies should realize the need to transition digitally. This blog discusses the needs and benefits of digital HR transformation and how it can impact your company.
What is HR Digital Transformation?
HR digital transformation is all about modifying HR operations and conducting them in a robust and data-driven manner in lieu of conducting operations in a conventional manner. The digital transformation in HR has not just impacted HR operability but has also taken the entire workforce into its ambit.
According to Deloitte Insight’s Human Capital Trends survey of 2017: HR is undergoing quick and massive change. HR professionals are being motivated to play a major role in accelerating the organization’s digital transformation efforts.
HR digital transformation is the process of infusing technology into HR operations to streamline processes, elevate employee experience, and enhance efficiency. It includes leveraging digital tools and data analytics on the basis of which HR professionals can make well-informed decisions and prepare effective strategies.
How Can Digital HR Transformation Benefit Your Business?
Integrating HR software is the best way to welcome a digital renaissance in your HR management system. Here are some of the benefits of HR digital transformation:
1. Helps Automates HR Processes
You can stay viable and ethical by streamlining procedures within your organization. By simplifying management procedures, digital HR makes the work of human resource professionals easier.
Digital HR can take shape in the form of AI-integrated recruitment procedures. An HR hiring software can pre-screen possible job prospectors seamlessly.
It can also grade each candidate for the role, screening through Q&A and video interviews. Artificial intelligence in HR can also help in social media monitoring and analyzing the efficacy of recruitment methods.
While in-person interviews will eventually be required, AI can contribute to the efficiency of the employment process. This system allows managers to spend less time and effort locating new workers and interviewing unqualified applicants.
2. Increases Employee Engagement and Satisfaction
With HRMS ( human resource management system ), you can streamline your HR-related activities and reduce staff workload. For instance, the software automates extracting data and updating employee contact information. You can automate approving leave requests and check HR regulations with just a few clicks.
Overall, it makes the process of getting approval or printing salary slips quick, thereby keeping your employees satisfied.
With digitalization in human resource management, you can optimize internal procedures and improve communication.
Besides, the use of chatbots can reduce employee workloads. You can easily resolve employee concerns and share information, making it quite helpful when dealing with remote employees.
3. Saves Time and Brings ROI
Bringing a digital HR transformation comes with its own perk. You can reduce time spent on administrative chores and focus more on strategizing. With manual entries out of the way, HR professionals are able to achieve corporate objectives with full accountability.
Besides, cloud-based HR software is a centralized database where all employee information is stored. You can access your employee information from any device and share information with ease.
Most importantly, these cloud-based HR systems are budget-friendly. It doesn’t require any upfront infrastructure cost. You just need to pay a monthly or annual subscription fee based on the features you choose.
You also can’t ignore that these digital solutions are linked with indirect cost reductions, such as associated labor costs for preparing quarterly reports.
4. Amps Up Security
Digital human resource management software offers increased security. The use of professional hosting providers, encryption, and backup methods makes data secure.
The software ensures that employee access to private and confidential information renders secure. It maintains the company’s data in one centralized, secure location.
Furthermore, it enhances efficiency by reducing paperwork, accessing outdated papers, and archiving training manuals and handbooks.
So these were the HR digital transformation benefits. Now, let’s get an overview of human resource digital transformation challenges.
What Are the Challenges to Digital HR Transformation?
Despite all its benefits, most companies are still skeptical about bringing digitalization into human resource management.
The challenges pertaining to the same might be contributing to this apprehension. These include:
1. Establishing a Digital Culture in The Company
Existing company culture acts as the first hindrance to digital transformation. Unless the work environment has already adopted technological changes, it can be hard to infuse it for the first time.
People, in general, are resistant to change. So while implementing digital transformation, you must conduct rigorous training and sessions. It should explain to them how these new technologies will contribute to their productivity. Make them aware of the purpose of using these digital tools.
Choose an HR software that is easy to use so that even a non-tech user can access it without much difficulty. Create a strong digital corporate culture if you want to grow your business.
2. Reinventing HR Practices
Digitalization should be aptly reflected in HR procedures, which can be challenging at times. They should be converted into flexible activities that can quickly adapt to changing circumstances.
For starters, the onboarding and training processes can be made smooth with the help of HR software.
Employee incentives, along with skills training, can be digitally focused. It’s also critical to pay attention to employer branding for a smooth digital HR transformation. Employees should be given the opportunity to speak up and discuss their experiences with new and evolving technology.
3. Personalizing Employee Experience
The task of personalizing the digital experience for each employee can prove to be challenging. As an HR professional, your job is primarily to deal at an individualistic level.
Every employee has distinct objectives and expectations, and it’s up to you to ensure they align with the company’s culture. But at the same time, you also need team cohesiveness.
For instance, some employees may adapt to the tech changes faster than others. But you should make sure to educate them all equally along the way.
Examples of HR Digital Transformation?
As you are well-versed with the definition, benefits, and challenges of digital transformation in HR. Let’s look at some examples of HR digital transformation implemented by well-known companies.
1. IBM
IBM framed and implemented a global HR digital transformation strategy, namely HR 3.0; its key objective is to digitize and automate the HR processes and offer self-service tools. This strategy focuses on leveraging tools like AI, analytics, automation, and cloud to enhance efficiency, improve decision making and optimize HR processes.
2. Accenture
Accenture developed and implemented an AI-based virtual assistant called AskHR. Its main objective is to answer queries concerning HR policies and procedures. It also provides insight on how to reduce the workload and enhance engagement.
3. Unilever
Unilever introduced an HR digital transformation program by adopting HR 4.0 framework to maintain employability and enhance growth. The key focus of this program is to create a unified HR platform, providing self-service options to employees, etc. It also allows leveraging data analytics to get insights into employee performance, engagement, and retention. This program aims to elevate employee experience by providing personalized HR services.
4. Siemens
Siemens introduced “Siemens People Connect, which is a cloud-based global HR platform that aims at digitally transforming and streamlining HR processes. The main objectives of this platform are to automate and reduce repetitive administrative tasks and increase efficiency. Apart from that, it offers self-service portals to employees for easy access to relevant documents. Providing all these advanced functionalities has majorly improved the user experience of Siemens employees.
Hence, these are some well-established examples of digital HR transformation practiced by large organizations having a global presence. Now, let’s get an overview of the challenges to digital HR transformation.
What are the Stages of Digital HR Transformation?
The HR digital transformation process can be tedious and daunting for many organizations. To successfully accomplish the same, the flag bearers of the organization must have a clear understanding of the transformation stages. Having that, they can effectively design the best possible plan for their organization.
Let’s understand the six stages of HR digital transformation and what it entails.
1. Business as Usual
This is the initial stage of the HR digital transformation journey. In this stage, the organization’s business leaders will analyze and identify the trends to determine whether introducing a digital tool will assist them in growing and enhancing efficiency.
While kick-starting this digital transformation journey, the company may face challenges like employees resisting change, increased operational costs, etc. But if the execution is done effectively, chances of successful HR digital transformation will increase.
2. Vigilant and Present
This is an experimental stage where organizations have decided which tool and software will be used and ensure that a digital learning platform is provided to the workforce and adapt to the operational change.
To successfully accomplish this stage, the organization will have to provide intensive training to employees, prepare them to mentally accept the transformation, and assist the organization in achieving the same.
3. Formalized
Here, the transformation is seen to be beginning, and this is the stage where the organization learns whether the strategies framed are relevant and effective. If they are not relevant, then they put a stop to it. It is not always the case; most of the time, the strategies and tools are relevant and positive results are to be seen.
4. Strategic
Once during the formalized stage, a positive result is seen from all sides, and everyone is on board with the digital transformation initiative. At that time, the organization will plan to move on and follow the roadmap determined. At this point, the organization will be able to overcome the resistance faced against the change.
5. Converged
Once all the challenges are subdued and strategy has been framed. At this point, the organization will develop a team dedicated to overlook that the strategies and roadmap are to be followed religiously. In addition, it also measures the success of the digital transformation. Early success assures employees that digital transformation is a good initiative and will improve their work experience.
6. Innovative
The organization has to be innovative and open to improvisation with the plan, as there will be instances where the strategies need to be amended. In this stage, the company is investing in new initiatives whenever required to optimize operability and make the transformation easy.
So, these are the six stages of digital transformation in HR that assist organizations in achieving the desired transformation goals and objectives.
How Can You Achieve a Seamless Digital HR Transformation?
You can enable a flawless digital HR transformation for your company by following simple steps.
Here are the five principles you must remember while digitizing your HR department.
1. Know Where to Begin
Assess your organization’s present baseline before investing in HR technology. Identify any skill gaps — for instance, you might need an additional employee or train your existing member to implement the digital change. Before embarking on a large-scale HR change, have a clear aim in mind and define your objectives sharply.
Ask yourself — does digitalization make the process easier for everyone involved? The end-user should profit from the digital revolution. When HR builds an automated performance management software to gather salary appraisals, managers and workers should have access to this platform.
2. Have a Discussion
All relevant parties and employees should be informed of your decision to digitalize. When it concerns a digital HR transformation that will impact the whole company, you’ll need all the help you can get.
HR executives should keep everyone in the loop in order to apply feedback and suggestions — making the system more effective.
3. Evaluate The Best HR Technology
The validation procedure of HR software is essential. You must assess all the options and define what you want, what criteria you’re looking for in a vendor, and how you’ll choose the best option.
Rather than a haphazard approach, have potential suppliers give demos tailored to your organization’s needs. Additionally, confirm cloud-based platform dependability records and security protocols. Find out if the solution can scale with your business and how much control you’ll have over modifications and additions over time.
4. Be Flexible
The whole point of integrating modern technology is to eliminate old, obsolete ones. Be flexible in letting go of traditional mechanisms and opting for newer, more effective ones.
5. Create a Culture
The creation of digital culture is at the heart of HR’s digital transformation. This entails not just knowing how to employ automated solutions but also how to use them to improve human skills.
Wrapping Up
A digital HR transformation for your company can be a good and necessary move.
The paradox here is that digitalization curbs the same challenges it poses. However, the pros outweigh the cons.
Digital HR software will automate and streamline HR procedures. It will reduce effort, time, and cost, improving your company’s performance.
The world is moving fast-paced, and it is only logical to keep up with it. With every sector being revolutionized, why not the human resource department?
Invest in good software, and see significant changes unfold.
Frequently Asked Questions
Factors like clearly determined goals, onboarding the employees and stakeholders, and regularly measuring the progress of the transformation are important for successful HR digital transformation.
For an effective start of digital transformation in HR, you need to ensure the following aspects:
- Goal establishment
- Reducing resistance to change
- Be innovative
- Create a productive transformation culture
- Track performance
Khyati Sagar is a seasoned HR and payroll expert with over a decade of experience in the field. She has worked with businesses of all sizes, from small startups to large corporations, helping them optimize their HR and payroll processes. As a passionate advocate for technology-driven solutions, she is always on the lookout for the latest advancements in HR and payroll software. When she’s not working, you can find her hiking or playing basketball with her friends and family.
