Digital HR transformation is a widely used term, but what does it mean? Could you give me some examples? What does a successful digital HR transformation look like in terms of steps? And finally, what does it mean for HR professionals?
Chances are high that digital HR transformation efforts are already underway within your company, along with associated challenges. Renowned consulting firms have identified enterprise digital transformation as one of the top HR priorities and one that will remain important in the long term. The pandemic has accelerated the digital transformation of companies' market offerings, processes, and working methods. HR organizations need to take initiatives that can directly influence the success of these programs, such as leadership, culture, skills development, and change management.
What is digital HR transformation?
HR transformation is the strategic process of using technology, data, and digital tools to reposition and improve the entire HR function. This involves adopting advanced software, automation, data analytics, and AI to streamline all HR processes within an organization. The shift to a new digital environment, primarily through automation, can make HR processes more efficient and easier to manage.
Digital transformation of HR refers to moving traditional HR activities to a digital environment using tools such as automation, data analytics, chatbots, and onboarding software. Often, HR professionals have to intervene manually to bridge the gap between systems, data quality, and ultimate impact. There is still significant potential for improvement but requires additional skills and knowledge from existing HR professionals. Creating new HR momentum is necessary to achieve strategic innovations.
Examples of digital HR transformation
What does a digital HR transformation look like in practice? Below, I will provide some examples of powerful digital opportunities for your organization. I know there aree numerous applications, but for the sake of readability, I will limit myself to the three most interesting ones. If you'd like to receive more examples, please send a private message.
1. Digital onboarding
Digital onboarding is an excellent example of how HR transformation is revolutionizing traditional HR practices. It signifies transitioning from manual, paper-based onboarding processes to more efficient, technology-driven approaches. Here is a detailed explanation of how digital onboarding illustrates HR transformation:
Paperless Process Automation: Unlike manual onboarding, which involves piles of paperwork such as employment contracts, tax forms, leases, and the like, digital onboarding eliminates the need for paper. This streamlines the process through automated workflows. Employees can complete all documents electronically from any location using secure online platforms, reducing administrative burden, minimizing errors, and speeding up the onboarding timeline.
Efficiency and Time Savings: Digital onboarding drastically reduces the time it takes to bring new employees on board. HR teams or the hiring manager can pre-fill forms with relevant information, and employees can quickly sign and submit documents electronically. This efficiency translates into faster integration of new employees, allowing them to contribute productively sooner.
Personalization: Digital onboarding platforms allow organizations to create customized onboarding experiences. New employees can receive personalized content, including welcome messages, videos, and training materials. Personalization fosters a sense of connection and engagement from day one, improving the user experience of the software.
Data Collection and Analysis: Digital onboarding facilitates the collection of valuable data related to the onboarding process. HR professionals can track metrics such as onboarding completion rate, time to productivity, and employee feedback. These analytics provide insight into the effectiveness of onboarding strategies and enable continuous improvement.
Remote Onboarding: Digital onboarding has become more valuable with the emergence of remote work. Organizations can efficiently onboard employees regardless of physical location, which is essential for attracting and retaining talent in a global and remote working environment.
Scalability: Digital onboarding is scalable and meets the needs of organizations facing growth or fluctuations in recruitment volumes. A significant advantage is the guarantee of consistency and efficiency, regardless of scale.
2. Self-service portals for employees
Another key example of digital HR transformation is self-service portals (ESS or Employee Self-Service). They fundamentally change how employees access HR services and information while enabling HR teams to work more efficiently. The old-fashioned counter function becomes automated.
Streamlined access to HR services: Streamlined access to ESS portals provides employees with a centralized, digital platform on which they can access a wide range of HR services and information 24/7. Employees can access various HR resources, from viewing pay slips, contracts, or documents to requesting leave and updating personal details.
Improved employee engagement: ESS portals enable employees to take control of their HR-related tasks instead of the already old & dusty personnel file. Employees can independently change their personal details, track their leave balance and access important HR documents. This self-reliance not only eases the burden on HR staff but also promotes a sense of autonomy and responsibility among employees.
Knowledge and information: ESS portals serve as knowledge hubs, providing employees easy access to policies, procedures, manuals, forms and frequently asked questions. Employees can quickly find answers to frequently asked HR-related questions, reducing the need for HR professionals to answer routine questions. Moreover, the portals can be updated in real-time, ensuring employees can always access the latest information.
Analysis and reporting: A significant benefit of ESS is generating valuable data for HR analysis. HR teams can track user activity, identify trends, and gain insight into common requests or issues.
3. People analytics
People analytics shifts traditional HR practice towards more data-driven decision-making. It involves leveraging technology and advanced data analytics to gain valuable insights into the workforce. Some examples I have described below:
Data-driven decision-making: Ultimately, people analytics uses data from various HR systems and sources, such as HRIS, recruitment software, performance management platforms, or survey platforms. Data from unlimited systems and sources are processed and analyzed for actionable insights. Instead of relying on intuition, HR professionals can make fact-based decisions on issues such as talent acquisition, employee engagement, performance management and workforce management.
Predictive analytics: People analytics goes beyond integrating retrospective reporting. HR teams can use historical data to predict future workforce trends and potential challenges. Predictive analytics can help organizations anticipate talent shortages and high employee turnover risks or identify top performers likely to be promoted.
Talent acquisition and recruitment: Thanks in part to people analytics, HR teams can identify the most effective recruitment sources for finding top talent, assess the quality of candidates and ultimately optimize their recruitment strategies. Organizations can refine their sourcing and selection processes by analyzing data on successful hires and applicant demographics.
Employee engagement and retention: A topic I regularly hear back on is retention and engagement. Understanding which factors determine employee engagement and retention is crucial for HR. People Analytics can identify areas of concern by analyzing survey data, employee turnover, and employee feedback. Based on this data, HR can develop strategies to improve engagement, address employee concerns, and retain top talent.
The digital HR transformation roadmap
Digital HR Transformation is a multi-faceted and intensive journey that involves several steps to ensure its success. Building a roadmap helps to build and support digital HR transformation. In the following, I outline the roadmap I have often used, which consists of 7 key steps:
Step 1. Assessment of current HR processes
Assessing current HR processes involves a comprehensive review of how HR tasks are performed within the organization. You can start by documenting existing processes, workflows, and data flows. This includes everything from recruitment and onboarding to performance management and personnel records management. Process maps and flow charts can visualize these processes.
An important step is collecting feedback from HR professionals and employees to identify pain points and inefficiencies within the workforce. Analyzing historical HR data to uncover trends and areas needing improvement, such as high staff turnover or recruitment delays, also helps. This assessment provides the critical insights necessary to determine where digitalization can have the most significant impact.
Step 2. Clear goals
Clear and well-defined goals ensure that efforts are focused and measurable. Define SMART goals (specific, measurable, achievable, relevant, time-bound) that align with the organization's broader strategic objectives.
For example, reducing the time to fill vacancies by 20% within six months or improving employee engagement scores by 10% over the next year. The targets should address the specific challenges identified during the assessment phase.
Step 3. Build a digital transformation team
A dedicated digital transformation team is crucial to successfully driving the process. This team consists of individuals with various skills, including HR professionals, IT experts, data analysts, project managers, and change management specialists. The team's composition should reflect the different aspects of digital transformation, from technical implementation to organizational change. Clear roles and responsibilities should also be assigned within the team to ensure accountability and efficient task execution.
Step 4. Choose the right technology to suit your organization
A crucial step in digital HR transformation is selecting the right technology. Identifying and implementing digital tools that match the organization's objectives requires a systematic approach. A thorough needs analysis, based on step 1, in which you identify the HR processes that require digitization, is a first step. Consider tools such as HR information systems (HRIS), applicant tracking systems (ATS), talent management software, employee self-service portals and analytics platforms. Be sure to check out BuySmart | Gartner Products & Tools | Gartner
Inventory potential technology vendors, considering functionality, scalability, ease of integration with existing systems, usability and cost. Request product demonstrations, seek references from organizations implementing similar solutions, and hire specialized consultants for advice. Also, ensure you have a clear picture of the end goal. See also my earlier interview https://rhmagazine.be/nl/tech/hr-excellentie-eenvoud-focus-en-impact
Step 5. Data security and compliance are priorities
Data security and compliance are non-negotiable aspects of digital HR transformation, given the sensitivity of HR data. By developing robust data management policies and procedures, you prioritize data protection. Specify who has access to HR data, define data retention policies and establish a disaster recovery plan should things go wrong. Keeping abreast of relevant data protection and privacy laws and regulations is essential. Regular audits can help assess and enforce compliance and ultimately avoid the risks of data breaches and legal fines. Also, could you include your works council early on by actively acknowledging their role? In some countries, they are very formal and claim this position. Ultimately, it prevents frustrations and helps the digital HR transformation move in the right direction.
Step 6. Change management
Successful HR transformation requires careful change management to ensure that employees and stakeholders adapt smoothly to the new processes, technologies and ways of working. Start by identifying key organizational stakeholders and involve them in the transformation process. Create a communication plan to inform stakeholders about the changes, highlighting benefits and addressing concerns. In the past, I have gained good experience in building change management infrastructures (CMI), where all elements are named in advance, allowing the organization to implement the necessary changes quickly and in an agile manner. Creating so-called playbooks helps, especially if there is a global digital HR transformation. The project team provides local teams with clear standards, practices, training, communication materials, and so on.
Effective training programs and ongoing support for employees and HR professionals are essential to helping them acquire the necessary skills to use the new digital tools effectively. Feedback mechanisms are essential to gather input and address issues during the transformation. A well-executed change management strategy minimises resistance to change and increases the chances of successful adoption.
Step 7. Analytics
Analytics plays a central role in digital HR transformation by enabling data-driven decision-making. Start collecting HR data from various sources, including your new digital tools. Data can include recruitment statistics, employee performance indicators, engagement surveys, etc.
Once you access this data, you can use analysis and reporting tools to gain meaningful insights. Could you identify trends, correlations and areas for improvement within your workforce? For example, you may discover that a recruitment source consistently produces higher returns.
What is the role of the HR professional? Are you an anthropologist or an inside mouse?
HR has a pivotal opportunity to spearhead the transformation to a digital enterprise. In the years ahead, real game changers will be HR teams that embrace digital platforms and take on the dual challenge of revolutionizing HR operations and transforming the workforce and how work gets done. HR leaders who focus on new technologies, platforms and ways of working and invest by constantly re-innovating will be in a solid position to impact business outcomes and the employee experience.
So what can you do?
Develop a multi-year HR technology strategy in today's rapidly changing HR technology world. This strategy should include cloud platforms, apps, analytics, and a range of tools for AI, case management, and others. Define the different functions needed to flesh out these technology skills.
Build a digital HR team: Build a team to explore new vendor solutions, develop others, and consider AI solutions to improve service delivery, recruitment, and learning. Companies are more likely to invest in digital HR design teams that work with IT to design digital apps, build prototypes, and oversee implementations.
Benchmark: Visit other companies to see what they are doing. You can also engage external speakers, participate in webinars and seminars, and constantly look for new ideas to foster innovation. Curiosity is a key magic word. Today's leading practices come from innovative ideas developed around an organization's culture and business needs, and certainly not from a book.
"Are you an anthropologist or an inside mouse? If you want to remain relevant, you need to incorporate best practices from outside. Unfortunately, I often see individuals not taking the digital transformation seriously and lacking an understanding of how it should be done. If you are open to learn, you will need to adopt a more anthropological approach."
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