A HR digital transformation requires organisations to make vast amends to the way it functions. Leaders and employees would need to change their thought process and act with higher data orientation.
A HR digital transformation requires organisations to make vast amends to the way it functions. Leaders and employees would need to change their thought process and act with higher data orientation. Digital transformations use technology to replace many manual transactional HR processes, and help to leverage it to create a ‘system of records’. This data allows leaders to make more strategic and sustainable decisions and helps organizations prepare for the challenges of the future workforce.
In this document,we shall start with discussing the human resource life-cycle i.e. the various stages of interaction of an employee with the organization. These stages will help understand the possible touch-points that can be digitally transformed. We then discuss employee engagement - the phenomenon of improving employee experience at every stage of employment, and to understand technology can enhance it. Next, we walk through the various aspects of HR transformation itself, along with a SWOT (Strength, Weakness, Opportunity and Threats) analysis and PESTEL (Political, Economic, Social, Technology, Environment and Legal) analysis of it.
We also will have a quick look at the HR technology products, both established and upcoming. A unique section is Change Levers in HR transformation will explain how transformation in this space will be directed in future.
While evaluating for HR digital transformation, HR leaders need to follow the Human Resource life cycle that runs through the major experience touchpoints. Paying close attention to each of these junctures are important to craft the HR digital transformation that improves the HR workflow.
A typical human resource lifecycle is defined as the stages that employees go through in any organization. Each of these stages is important and requires specialized personnel to manage the unique nuances. Speaking from an academic perspective, the nitty-gritty of each step is unique, distinct, and complex; hence, requires specialized skills and resources.
Let us look at each of these stages and understand their relevance.
The life cycle begins with attracting the right talent to be a part of your workforce. While advertising and marketing do help, it has only limited scope and impact. The biggest influencers in attraction are ‘Organizational Culture, Values, Mission, and Vision of the organization’. The culture and values determine the objectives and means to achieve them. These heavily influence experiences of the current employees, and the employees happen to be the most significant source of marketing for the organization. Portals such as Glassdoor provide detailed reviews of employees about the organization, facilities, and culture. Prevalent practices also become a talking point and a significant resource attaractor.
“As IBMers, we have always embraced the values of trust and personal responsibility, so the concept of having our employees work from home as the need arises has been at the very core of how we operate as a company,” tells Sandip Patel, Managing Director, IBM India Pvt Ltd and General Manager IBM India/South Asia.
These activities are aimed at engaging prospective employees and attracting the serious and relevant candidates with a strong cultural fit
One of the most complicated tasks that require hiring the right candidate who is a great value addition to the organization culture. Successful hires are the ones who are aligned with the organizational values and learning rather than just carrying a relevant skill set or talent. Since organizations incur significant expenses on every employee, recruiting a person with a long relationship is beneficial and aspired. Crucial tasks in this phase are:
Job portals with high reach such as Naukri, indeed, monster-jobs, etc. are the ones used extensively by job seekers.
Screening based on experience, educational background, and abilities is also a suitable method to quickly remove applications that do not fit the expectations.
At every stage, recruitment teams interact with the candidate to take feedback, and capture concerns and requirements. This is usually done by assigning a buddy or point of contact resource to manage the engagement experience of the candidate.
This stage introduces the employee to the organization, informs him/her about the practices, culture, and values, and prepares them for a long career. Some quick benefits of a detailed and well-planned on-boarding process:
Employees are trained on the organization's policies, best practices, and working culture. Usually, senior leadership and management interact with the newly onboarded candidates to answer any questions and concerns. Support teams enable the required administrative, tools, and functional accesses to ensure that the employee has a seamless experience while executing the tasks and responsibilities.
A good practice is to assign a buddy or mentor to help the new employee find operational answers and process explanations for quick and routine tasks.
It also gives the employee support to turn to when the workload overwhelms the employee in the initial phases.
Human resource managers interact with the employee to capture and understand the aspirations and long-term development needs. There is a detailed assessment to assess the leadership potential of the employee and provide adequate opportunities to test and validate those skills and potentials.
For bright and top-performing employees, providing them with challenging problems, customer management, and other leadership opportunities go a long way in retaining and motivating such employees.
Recognizing, rewarding, and appreciating employee contributions are essential for the continued and strong morale of the workforce. Apart from the usual recognition certificates such as Spot Award, Ace Award, Champ Award, etc., many organizations are now employing employee-centered rewarding avenues.
Final stage of the employee life-cycle. It is a crucial stage that requires diligent attention to detail to accomplish the following:
Employee engagement is now becoming an important part of each of these stages. It is in fact the feedback and learnings derived from the engagement that is now governing and directing the transformations happening in these domains. So, before jumping into the detailed analysis of HR transformation, let us understand employee engagement first.
Engaged employees and digital transformation mutually reinforce each other. Digitizing HR will change everything about the way employees work, starting from the nature of work to the skills needed to do one’s job. While engagement will be the overarching result to be achieved during every digital transformation, digital modes can be used to drive engagement. This section details employee engagement and why it is essential in digital transformation.
It is a new age practice of engaging with the workforce to measure their feelings, understand their concerns and make products with a people-first attitude. It is a means to grab the pulse of the workforce and create solutions that cater to the expectations, needs, and challenges of the workforce rather than forcing upon them the existing solutions.
For the engagement to happen, the following conditions must be fulfilled:
The essence of employee engagement is to segregate employees into the above buckets and take suitable action to mitigate the circumstances and create a healthy, supportive, and prosperous work environment.
Here are a few benefits of employee engagement measured across industries, roles and organizations sizes.
Wondering how to effectively engage your employees? How to provide a conducive and supportive environment to the employees? Check out the low hanging fruits below to get started on your engagement journey and start capturing the essence of your workforce:
Employee friendly and user-first approaches have brought about rapid changes in the engagement exercises across organizations. Here are some of the transformations that have altered the way employee engagement is now perceived and executed.
Now that we understand employee lifecycle and employee engagement, let us dive into the digital transformation and understand what it means in the human resources domain.
It is defined as the evolution of processes, systems, and mechanisms of managing the human resource tasks including (but not limited to) recruitment, payroll, benefits, learning, rewards and recognition, appraisals, separation, etc. Prominent goals of a digital transformation exercise in the human resource department are:
1. Automate manual and repetitive tasks
2. Anytime, anywhere and near real-time access to information
3. Enable employees to access information, execute basic tasks and processes without dependency
4. Improve employee experience on the following:
5. Employ freed-up time and resources for constructive use
6. Gather regular feedback on system and process efficiency
7. Identify areas of improvement and continually improve system features and benefits.
HR Systems have evolved over many years. In the ancient times, human resource management was done manually with paper records maintained for every bit of information. Slowly, technological progress caught up and organizations started adopting record keeping systems. These were followed by recruitment systems and later smart systems.
Broadly, we can classify the HR management systems into two categories: Static Systems and Dynamic Systems.
Let’s look at what these mean:
The first arrivals in the HR technology during 1970s – 1980s was to automate paper transactions and maintain digital records. Next arrived systems to manage talent and the recruitment activities of the organization. The purpose of these systems was to build upon the benefits of automation and move into the talent management domain. Secondary objectives were to track the efficiency of employee training and improve their productivity, reach, and impact. They also focused on measuring employee engagement by giving employees improved, lasting, and quality access to information and resources.
Built upon the growth of the predecessors (discussed above), these systems started appearing around 2010 and continue to be developed. Rapid development in technology led to an exponential increase in the availability of cloud solutions. This moved the focus of HR transformation from employees to integration of various applications into a single suite. This resulted in tremendous time and cost savings as data exchange became seamless. HR managers were now able to analyze information across systems and look at a birds-eye view.
Post the growth in cloud solutions and large-scale data management tools; data analytics, machine learning, and AI are the future. Large scale automation coupled with AI can deliver considerable benefits such as identifying pay variations and abnormalities, learning needs and their fulfilment, and lack of transparency or clarity in the various stages of the recruitment process discussed earlier. Systems of intelligence like Xoxoday Empuls can capture valuable information from data systems and give you great insights into organisation culture and engagement.
Digital Transformation is a time consuming and complicated exercise that requires time, resources, and commitment at various levels. It is generally seen that many organizations jump into digital transformation just because everyone is. Or, because the leadership believes in the modernization and initiates a project. But as a department insider, how do you take an informed decision on the need for digital transformation? Here are a few questions to discuss in your team:
Did you get multiple ‘No’? Your department likely requires a digital transformation exercise.
Here are some current facts:
Just because everyone around you is initiating large scale transformation projects, does not mean you give in to the “fear of missing out!”. Here is a quick checklist to determine whether your organization required an HR transformation.
Convinced to jump into the digital transformation project? But confused on how to go about it? Read on to know how you can manage the entire process smoothly.
Follow this simple plan to regularize and simplify the complex process.
Clear identification of the goal is essential. Here is a crucial checklist to follow:
Responsibility and ownership are essential pillars of any successful metric. Identify the right team (internal/ vendor) to lead and manage the product. Careful deliberation is necessary to find answers to these questions.
Do we need to hire additional resources to plan, manage, and execute the transformation? What are the specifications and job descriptions?
Deadline definition is essential and critical for any project. There should be realistic expectations and deadline setting and necessary to stick to those deadlines. Dead lines need to be decided based on:
Identifying the existing systems to be discontinued post the transformation is a mandatory exercise. In most cases, the current systems are not suspended due to ease, comfort, and lack of training on the new systems. This puts data redundancy stress, lack of updated information on the new system, and information mismatch among systems.
As the HR manager, you have identified the need, performed due diligence on short term and long-term effects, and estimated the cost-benefit analysis. Now is the time to present your master plan to the leadership. Explain the benefits clearly. Be it costs, time, employee engagement, show the current and expected stats by highlighting the variation.
Done with the transformation? Now is the time to take it to masses. Prepare catchy communications and messaging to engage your workforce. Explain the benefits to them in the language of their understanding. Conduct frequent training and workshops for the employees to understand how to navigate and work around the new tools.
Digital transformation is not a one-time anomaly. It is a continued aberration. With the continually evolving markets, organizations must keep transforming to keep pace with the demands. For this, a culture of continued transformations must be established in the organization.
We list some broad benefits of the digital transformation exercise. Actual benefits will be a lot more than these and you will keep discovering them one after the other.
Enhanced mobility, seamless integration across platforms and devices, and hyper-personalization make it extremely convenient for the workforce to execute their routine tasks and responsibilities. Here is a snapshot of how employee engagement improves with increasing transformations in HR practices:
Helps to break the vicious circle of low productivity, failure, and losses
Transformation exercises help to sync up various stakeholders (leadership, IT service department, workforce, legal, marketing, etc.) and bring them on the same page. It answers the concerns, reduces doubts, and convinces people of the need for transformations.
Interconnected systems and real-time access to data give on-demand availability of crucial insights. Explore and analyze trends across parameters for any period. These custom analysis and self-BI tools help HR managers to accurately identify areas of improvement and employ resources for solving an identified problem rather than shooting in the dark.
These systems have inbuilt AI, and machine learning algorithms that learn on the go and continually improve their outcome accuracy and capabilities by learning from the database and available information. Thus, these systems leverage the available treasure of data to provide accurate and optimum solutions.
HR Systems have transitioned from giving a custom user interface to employees to providing custom, pleasant, and complete user experience. E.g., apply leave using Google, Alexa, and other voice-controlled platforms. Or, get any time anywhere access to information when you need it. This enables the transition from engagement to experience. Workforce can now get customized experiences as per their requirements and needs, rather than accepting a uniform standardized experience.
It lets you run surveys on the workforce and capture the pulse on new age topics. (E.g. what do employees think of a four-day workweek?). It also helps to get instant feedback on various aspects of the working environment, policies, and practices. The ability to get instantaneous feedback ensures that we capture the feelings and emotions associated with the activity.
Like every other technology project, HR digital transformation exercises too have challenges which can lead to severe consequences. But there is nothing to worry about as long as you keep the basics in check. Here, we explain some of the prominent internal or intrinsic challenges that organization usually face when executing a transformation project. Refer this list to ensure that you are not missing out on any basic factors:
(% of HR professionals rating ‘digital transformation in HR practices’ Important or extremely important)
These factors make the transformation exercise and complex. Having multiple stakeholders across geographies, cultures and backgrounds make decision-making difficult and time taking. Pay special attention to managing these intangible complexities and ensuring that the project does not deviate from the timeline.
Now, let us look at some external factors impacting the transformation exercise.
It covers the Political, Economic, Social, Technological, Environmental, and Legal Aspects of the digital transformation exercises in the HR domain. In simple terms, these are the external or extrinsic challenges to the entire transformation exercise. We list them out here for an easy reference:
Let us summarize the HR digital transformation with listing the strengths, weaknesses, opportunities, and threats involved in the entire exercise.
Now that we have thoroughly covered the HR digital transformation landscape, let us now move towards the tech products that are available in the market. Though we cannot (and do not intend to) cover the entire available range, we show some tools based on their operation area for representation purposes.
According to the Gartner’s human resource product study 2019, the products are classified into Challengers, Leaders, Niche Players, and Visionaries based on their capabilities, features, ease of use, and return on investment.
Provide unique solutions such as labor scheduling and optimization, ability to customize a solution based on the diverse geographical or legal framework and policies for payroll, leaves, recruitment etc.
Tools that demonstrate strong and expanding use of digital assistants, mobile responsive designs and customized user experiences. Availability of powerful features such as account management, training, enhancement request handling. Provide varied cloud deployment options and plans. Another major offering is the strong customizations possible based on varied business and functional requirements.
Have strong product quality, system performance and integration capabilities with other tools and systems.
Enable quick adoption, reduced operational cost and better analysis of returns.
Next, we show some of the established players and some emerging startups operating in the HR technology space. This is in no way an exhaustive or representative list. It shows some of the tools with their domains.
Find Established Human Resource Tools at Capterra.
Before we end, we would like to speak a bit about the future of HR management. Here is a quick compilation of trends and ideas that will govern the future of transformations and the way HR practices and employee engagement will be managed in the future.
AI & ML: Artificial intelligence and machine learning-based solutions are disrupting the HR industry in a big way. Here are some of the key areas expected to be heavily impacted by the AI wave:
These factors will continue to dominate the growth and evolution of HR transformation in the future. It is better to be prepared and well-equipped with capabilities around these trends. While their presence will deliver results and growth avenues, their absence will be a severe blow to your growth story.
Systems that have built-in AI has been training and acclimatizing based on the data available. These systems are now beginning to give recommendations based on the information set available. Organizations are increasingly looking at the benefits of recommendations than just analytics or reports. As the access to mobile devices increases, the range of tasks and operations achievable by these systems will increase.
Voice command and operations have started taking shape and are expected to be a significant control element for tasks. (Ok Google; apply to leave for tomorrow!) This will become a reality sooner than we expect.
Small screens of mobile devices are now increasingly becoming the dominant category for information exchange. Applications are now built with mobile-first aims and are optimized for mobile usage. Some constraints to take care of are:
Workforce demographics are becoming increasingly diverse, distributed, and dynamic. Requirements are frequently evolving and will continue to play a significant role in the transformation definition.
Workforce today cannot be stuck with limited skill sets as technologies are evolving rapidly. It becomes essential for the employees to learn new skills and update their learning. Digital transformations should put a significant focus on identifying and building adequate and impactful learning opportunities for the workforce.
Different employment types and roles require custom payout frequencies and processes. Today, a lot of work is done by freelancers, and they cannot always be paid with the usual payout cycles.
HR transformation exercise is complex and complicated with multiple stakeholders, alternatives, and diverse requirements. It is normal to feel lost given the endless options, pressure of deadlines and the competitive pressure exerted by market forces. But it is manageable and is a simple to follow process if the basics are in place. Having a clear idea of the goals, diligent attention to detail on the process, steps and implementation teams along with a clear identification of managers and team members to manage and lead the project will ensure that this mammoth task is simple and seamless.