Why HR Needs Digital Transformation
Published: 06/12/2018
Free trial
See for yourself how you can save time and money. Enter your details below for a free 30 day no-obligation trial.
Many business owners and OP directors are interested in exploring digital transformation. Despite its crucial role, HR often needs to catch up in the process. Many end up asking, why does HR require digital transformation? We aim to answer this question in today's article and provide the best course of action.
Digital transformation is often seen as a tech buzzword. However, companies that fail to keep pace with technological changes put themselves at considerable risk, specifically being overtaken by more forward-thinking competitors.
Don’t get us wrong. This doesn’t imply that companies with the latest software or newest gadgets are more likely to succeed. Digital transformation involves integrating digital technology into all areas of a business, fundamentally changing how the organisation operates. However, some areas of the company are less susceptible to change. HR is one of these areas.
In simple terms, HR is the beating heart of the business. Thus, it should lead in the innovation game.
It’s common to assume that digital transformation is solely focused on technology. In reality, it emphasises the importance of people and equips them with faster, more accurate decision-making abilities. Regarding HR, this entails more efficient hiring, onboarding, training, and professional development. All of these factors will drive changes across other areas of your business.
Digital transformation is becoming prevalent across various industries. The budgets allocated to support it have increased by 25% in the past year alone. However, the process seems to overlook HR teams. Machine learning, automation, blockchain, business intelligence, and other components continue to enhance efficiency and intuition. Yet a staggering number of HR staff still depend on Excel sheets.
HR is a key component of the business. This is why digital transformation is often approached with extra caution to avoid disrupting legacy processes. While other areas of business undergo rapid changes, most companies adopt a “slow and steady” approach when addressing HR. Unfortunately, this can lead to significant setbacks across the entire organisation.
The biggest offender in creating a gap between digital transformation and HR departmental silos is often the budget dedicated to driving digital innovation. This budget is typically allocated to marketing, IT, and sales because these areas are generally perceived as ‘technology-driven. ' The problem stems from this prevalent misconception: digital transformation is understood to prioritise technology over people.
The Association of Executive Search and Leadership Consultants (AESC) found that outdated processes and mindsets hinder organisations from fostering innovation. They obstruct the achievement of digital goals and render long-term vision unattainable. In other words, companies appear hesitant to change their processes in favour of digital transformation, which inevitably results in delays.
Chief Human Resources Officers (CHROs) play a crucial role in transforming organisational culture. They enable innovative ways of working and managing technological change, profoundly affecting employees. These leaders are key to creating tools, processes, organisational structures, and talent pipelines that facilitate digital transformation.
A Kienbaum study found that 39% of HR staff’s time is spent on manual administrative work. Most of these tasks can be automated, freeing up a significant amount of each personnel's time. This time can then be devoted to carrying out more progress-driving tasks. In other words, investing in process automation will foster continuous growth in ROI.
According to another study by Harris Poll and CareerBuilder, companies that digitised their HR departments saved 35% in costs. When combined with the earlier mentioned prospect of freeing up staff schedules to prioritise further optimisation, it creates a clear picture of how digitizing the department ultimately benefits your business.
The key benefit of digitising HR processes is that you gain access to valuable data that would otherwise remain inaccessible. HR manages essential areas of your organisation, such as hiring, onboarding, and employee retention. Thus, it is vital that their decisions are informed by data.
The COVID pandemic has highlighted the importance of HR reacting quickly and knowledgeably. Companies with superior insights and a digitalised approach adapted to remote work faster than those that depended on traditional processes. Overall, the digital transformation of HR provides flexibility by supplying comprehensive data, which facilitates the continuous improvement of internal processes.
Like its treatment in other business areas, the digitalisation of HR must be robust and fast-paced. Digital transformation is synonymous with process disruption, leading to either its revolution or complete abandonment. As mentioned earlier in this article, a slow-and-steady approach will only hinder progress.
Our Timesheet Portal product is a software-as-a-service (SaaS) tool designed to help your business manage HR functions effectively. The extensive list of available integrations ensures that our software will seamlessly integrate into an ongoing digital transformation strategy. It will also serve as an ideal starting point if the process has not yet begun.
Or Project product replaces your current paper-based system with a more efficient web-based portal. Key features include online timesheet management, flexible hours tracking, online holiday tracking and approval, expense management software, and more. In other words, it will save your HR department significant time from day one and will continue to provide benefits as you move forward with newly collected data insights.
The HR department is undoubtedly one of the most crucial parts of the organisation. Given the heavy workloads faced by human resources professionals, it’s surprising that this department is among the last to adopt digital transformation. In fact, it’s in an ideal position to be its driving force.
Prioritising the digitalisation of HR is essential, as this area of your business manages some core processes. However, often the fear of disrupting these processes leads to delays. Unfortunately, a slow-and-steady approach will not suffice. To genuinely enhance your business performance through digital transformation, decisiveness and disruption are necessary.
Are you ready to truly revolutionise your organisation? We are prepared to assist you.