Why HR Needs Digital Transformation
Published: 06/12/2018
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Many business owners and OP directors are interested in exploring digital transformation. Despite its key role, HR often needs to catch up in the process. Many end up asking, why does HR need digital transformation? We aim to answer this question in today's article and offer the best course of action.
Digital transformation is often perceived as a tech buzzword. However, companies that fail to keep up with technological changes put themselves at considerable risk. Namely being overtaken by their more forward-looking competitors.
Don’t get us wrong. This doesn’t mean companies with the latest software or the newest gadgets are more likely to succeed. Digital transformation is about integrating digital technology into all areas of a business, fundamentally changing how the organisation operates. However, some areas of the company are less prone to change. HR is one of them.
To put it simply, HR is the beating heart of the business. Therefore, it should be ahead of the innovation game.
It’s common to assume that digital transformation is all about becoming tech-centred. In reality, it’s very much about the people and enabling them with quicker, more accurate decision-making abilities. Speaking of HR, this means more efficient hiring, onboarding, training and professional development. All of that will influence changes across other aspects of your business.
Digital transformation is becoming prevalent across different industries. The budgets allocated to drive it have increased by 25% in the past year alone. However, the process seems to pass the HR teams by. Machine learning, automation, blockchain, business intelligence, and other components keep improving efficiency and intuition. Yet a dauntingly colossal number of HR staff rely on Excel sheets.
HR is one of the driving components of the business. This is why digital transformation is often approached with extra care so as not to disrupt legacy processes. So, while other areas of business are put through rapid changes, most companies take the “slow and steady” route when addressing HR. This, unfortunately, can have massive setbacks across the entire organisation.
The biggest offender of creating a gap between digital transformation and HR departmental silos. Most often, the budget dedicated to driving digital innovation is put towards marketing, IT, and sales, as these areas are seen as ‘technology-driven’ overall. The problem lies within the aforementioned common misconception. Digital transformation is understood to prioritise technology over people.
The Association of Executive Search and Leadership Consultants (AESC) found that legacy processes and mindsets also prevent organisations from fostering innovation. They prevent them from achieving digital goals and make long-term vision unattainable. In other words, companies are seen as hesitant to change processes in favour of digital transformation, which inevitably leads to delays.
Chief Human Resources Officers (CHROs) are essential in changing organisational culture. They facilitate new ways of working and managing technological changes, significantly impacting people. These workers are vital in establishing tools, processes, organisational structures, and talent pipelines to support digital transformation.
A Kienbaum study discovered that 39% of HR staff’s time is spent on manual admin work. Most of these tasks can be automated, freeing up a large chunk of each personnel's time. This time can then be dedicated to executing more progress-driving tasks. In other words, investing in automating processes will lead to the continuous growth of ROI.
According to another study provided by Harris Poll and CareerBuilder, companies that digitalised their HR departments saved 35% in costs. Combine this figure with the above-mentioned prospect of freeing up staff’s schedules to prioritise further optimisation, and it paints a clear picture of how digitalising the department ultimately benefits your business.
The key benefit of digitalising the HR processes is that you will gain access to deeply insightful data that would otherwise be unavailable. HR is responsible for vital areas of your organisation, such as hiring, onboarding and employee retention. Therefore, it is absolutely crucial that their decisions are based on data.
The COVID pandemic has shown how important it is for HR to react quickly and in an informed way. Companies with better insights and a digitalised approach were able to adapt to remote working quicker than those that relied on more traditional processes. Overall, the digital transformation of HR grants flexibility by supplying in-depth data, which enables the progressive improvement of internal processes.
Similarly to how it’s treated across other parts of the business, the digitalisation of HR must be robust and fast-paced. Digital transformation is synonymous with process disruption that leads to either revolutionising it or dropping it altogether. As mentioned in this article previously, the slow-and-steady approach will only set the progress back.
Our Timesheet Portal product is a software-as-a-service (SaaS) tool that can help your business keep on top of HR management functions. The rich list of available integrations ensures that our software will smoothly blend into an ongoing digital transformation strategy. It will also be a perfect starting point if the process has not been set in motion yet.
Or Project product replaces your existing paper-based system with a more efficient web-based portal. Key features include online timesheet management and flexible hours tracking, online holiday tracking and approval, expense management software, and more. In other words, it will save your HR department heaps of time from day one and will keep on giving as you move ahead with newly collected data insights.
The HR department is undoubtedly one of the most crucial to the organisation. Given the heavy workloads human resources professionals are exposed to, it’s surprising that this department is among the last to embrace digital transformation. In fact, it’s in a perfect position to be its driving force.
Digitalising HR should be a priority. This area of your business is responsible for some of the core processes. The fear of interfering with these, on the other hand, is what usually causes the delay. Unfortunately, the slow-and-steady approach won’t work. To truly boost your business performance through digital transformation, you need to be decisive and disruptive.
Are you ready to truly revolutionise your organisation? Because we are ready to help.