Theory: HR Digitalisation

The module HR Digitalisation aims to provide knowledge on the topic which would allow the target group(s) to demonstrate their understanding and be more comfortable with the idea of automating their HR processes. This module will try to spark some interest in these target groups to apply HR digitalisation to their company. 

Digital transformation is a process and an outcome. It is a revolutionary change but also an evolutionary phenomenon. In addition to digitization, the transition to business with technology at its centre also entails a shift in the culture and mindset of an organisation.  

(Lalwani, 2020)

Reducing costs – Compared to manual, paper-intensive, traditional methods, digital solutions are far more cost-effective. Also, they eliminate pointless meetings, saving both the business and the staff members time and money. 

Improving efficiency – By enhancing decision-making capabilities, forecasting capabilities, visibility into operations and productivity, reducing pointless meetings, decreasing paperwork/paper trails, etc., digital HR solutions help to maximise employee productivity, enabling you to complete more work in less time without sacrificing quality or accuracy. (Team, 2022) It also enhances HR procedures by utilising analytics to identify processes that are and are not in line with HR strategy. (Daniel, 2018) Duplicate HR systems can be streamlined to make all processes more efficient.  

Increasing employee satisfaction and productivity – Because employees have more control over their schedules, workloads, etc., they feel more empowered as a result of the introduction of new technology into their daily life, which increases job satisfaction. (Team, 2022) Employees do not want to quit a business where they feel valued, this boosts employee morale, which results in better retention rates. By automating repetitive operations, digital solutions boost employee productivity ​by enabling​​     ​ workers to complete their jobs more rapidly. Also, they let people plan their workloads and schedule meetings with co-workers, clients, etc. more efficiently.  

Improving quality of data – The amount of time spent on administrative chores will decrease as your staff become more accustomed to utilising technology and are more likely to input accurate data into their systems, which will increase the accuracy of reporting, forecasting and other processes. (Team, 2022) Employees can spend more time doing what they do best and less time on non-value-adding duties like data entry with the help of new technologies. ​Having​​     ​ projects launched promptly and iterated will reduce the change of widespread failures of methods and technology that can’t be easily modified. (Daniel, 2018) 

Higher talent retention – Individuals want to grow in the professions, and when businesses demonstrate that they care about employees’ careers, exceptional employees are more likely to stay with the company longer, lowering recruitment expenses.  

Stronger alignment between company strategy and people management – Business can better align themselves with the company strategy with the help of business intelligence tools like workforce planning and people data.  

Lower HR costs – Organisations who have engaged in digitising HR (through systems like cloud HCM and talent management (Daniel, 2018)) over the long term save a lot of time and money as processes are streamlined and improved (Spencer, n.d.). Having visibility across your whole workforce also allows you to boost internal mobility while spending less on external hiring.  

Consolidates HR systems – Consolidating entails a unified source of truth and a consistent user interface. Employees are more likely to engage and finish activities without jumping between programs or being perplexed by functionality if there is a single platform for all of their HR needs (Spencer, n.d.).

Privacy Breach – The increased danger of privacy violations is one of the main drawbacks of automating HR activities. (Faber, 2017) The privacy of employees in a company’s database is protected by numerous laws and other regulations. But, if hackers or a third party gain access to the database, it might seriously reveal the personal information of your employees. A password by itself cannot ensure the security of their data because technically skilled people can quickly get around it. To protect the data, the database should be protected both internally and externally.  

Wrong Employee Assessment – Employee evaluations can benefit greatly and effectively from automated HR operations. The automated systems rely on a variety of data, such as performance ratings, abilities and skills. Yet, this automation takes the human element out of the evaluation. (Faber, 2017) An automated system may record high marks for marketing efforts, sales and new accounts but fails to record an employee’s tendency to treat customers in an unfavourable manner.  

Loss of subjectivity – Managers may be tempted to promote employees based on the unbiased data the system provides because HR management systems do such an excellent job of showcasing employee accomplishments, certifications and degrees. (Johnston, 2019) This can deter managers from spending the time to assess each employee’s potential contribution to the business by getting to know them personally. The fact is that a computer can only provide you quantifiable information that isn’t necessarily accurate. In actuality, using automated employee assessments alone might result in impersonal performance appraisals that ​fail​​     ​ to recognise an employee’s positive attitude and collaborative style, which are essential components of a successful work environment.  (Johnston, 2019) 

Difficulty of analysis – The system may have so much data that it is challenging to analyse. (Johnston, 2019) To simply sort the data into understandable chunks, you might require a different analysis system. For instance, if the system is not complex enough and you need to analyse employee turnover in connection ​to the level​​     ​ of remuneration, you can have trouble producing reports that show patterns. ​​This would require​ the​ help of cutting-edge tools not included in your HR management system, which would incur additional costs.

Efficiency 

In order to efficiently manage HR processes, businesses invest in and develop technology platforms, frequently through pre-existing HR technology providers. Automat​ed​​     ​ ​shared​​ ​services on already existing siloed HR platforms will make administrative work more efficient. (Ulrich, 2019) To replace human labour, streamline procedures, and increase effectiveness, AI-powered robots and chatbots can be used.  

Innovation 

Discovering innovative approaches to use technological applications to improve management of people, performance evaluation, communication effectiveness and work attribution. (Ulrich, 2019) 

Information 

For the benefit of business, information is shared. Data is available, internal, and external data are ​merged​​     ​ and people analytics are used to generate business relevant insights. Mostly connected to information management, particularly asymmetry. Organisations should use technical resources at this point to promote open access among people, including executives and entry-level workers alike. Information should not be viewed as a power source, but rather as a tool for making better decisions. (Ulrich, 2019) 

Connection 

The use of digital HR helps people connect with one another​. Technology​​     ​ fosters a better sense of belonging through leveraging social networks, fostering interpersonal experiences, and facilitating interactions. (Ulrich, 2019) 

Connection is also characterized as a worker’s emotional connection. According to research, employees who have deep emotional connections will be happier and more productive as a whole, which benefits the firm as a whole. Also, some technologies are employed to promote employee connection. The pivotal moment is the connection. The effectiveness of the first three phases is shared. The phase of connection involves a distinct narrative. From this point forward, the primary focus of your digital HR function should switch from operational efficiency to stakeholder experience to gain an advantage in upcoming talent battles.  

 The digital revolution is undoubtedly here to stay, but it won’t be as unique as people initially thought. Future HR digital transformation initiatives should focus on developing a new attitude and utilizing digital tools to improve stakeholder experiences rather than on ​digitising​​     ​ HR functions. The “HR in 2030” paper from Sage offers a wealth of information on the significance of the employee experience for HR success in the future (Penny, 2021). Employee centricity and the employee experience will be a significant priority by 2030, according to Lind Holbeche, co-director of The Holbeche Partnership, with emphasis on how we can interact as a business without employees and how we can give them a voice.  

In three different ways, connection underpins and assesses stakeholder experience. First, it helps employees combat social isolation, which is a major problem in today’s workplace. Eliminating social isolation in the workplace promotes personal and mental stability. Second, it fosters meaningful connection between stakeholders, which raises engagement​. Thirdly​​     ​, it fosters a feeling of community which can motivate staff members and other stakeholders to discover new ways to add value. (Inc., 2022) 

​​An organisation's​​     ​ performance can be future-proofed by improving stakeholder experience because doing so optimizes operational efficiency and revolutionizes cohesion, allowing your organisation to shift from being irredeemable or irresistible. (Inc., 2022) The future HR department should create digital solutions to fulfil its job as a stakeholder experience architect rather than simply finding digital technologies to automate management tasks and streamline operational processes. 

Self-Assessment 2 

What digital HR tools do you know of? 

What tools have you used to digitize your HR processes? Think ​about how​​     ​ you communicate internally, access to learning platforms, or how you digitalise your payroll systems.  

Mention one advantage and one disadvantage of HR digitalisation 

Advantage: _________________________________________________________ 

Disadvantage: ______________________________________________

Poor procurement process – Numerous factors need to be taken into account (such as how a vendor will be screened, how a vendor will be chosen, and is the vendor within budget). During the purchasing process, the relationship between internal HR parties and the procurement department needs to be extremely strong and open. The likelihood of success at this crucial stage will be lower if the two parties are unable to communicate effectively. (Borzee, 2022) 

IT is not involved from the start – Starting the process without involving IT is like building a house without consulting a surveyor. The majority of today’s cloud-based technology will raise challenging issues with data processing and system integration. Providing IT enough access to information and some decision-making authority during the scoping stage can prevent costly technological failure and expensive implementation delays. (Borzee, 2022) 

The one-size-fits-all approach – Like any product, it will probably fail if it doesn’t offer value or a fix for a particular issue (Borzee, 2022). HR technology must be built using human-centred design principles in order to guarantee that it can accomplish that purpose.  

Too much HR jargon – It makes sense that HR will concentrate on the tools and technologies they are familiar with while putting up the HR technology (Borzee, 2022). Also, HR wants to consider whether their focus is on desired processes or business objectives. The best course of action is to steer clear of difficulties and keep an eye on them. Simplifying can be a difficult task for HR professionals, but the goal is to distinguish between complexity and complicated.  

Poor user experience – ​User's​​     ​ desire solutions that are simple, quick and easy to use, in essence, they are looking for a ​straightforward​​     ​ solution. (Hirey, 2021) Users typically reject complex solutions that require them to complete numerous tasks before providing what they need. A bad user experience is a major factor in the failure of digital efforts.  

Success measures are not visible – Like any other technology project, HR systems need to be assessed to see how they are helping users be more productive and benefit the company. While most solutions talk a big game, they lack the ability to quantify their impact on the user and the business and to demonstrate their efficacy. As a result, people become ​discouraged​​and the project ultimately fails (Hirey, 2021)

Anchor Trust  

The Anchor Group, the largest non-profit housing association in the UK wants to improve the hiring procedure while giving candidates the greatest experience possible. The business decided to begin utilising custom recruitment strategies. They can screen candidates and have direct conversations with them using Facebook Messenger chatbot with questions built in. But the initiative went beyond technology. In order to direct users to the chatbot, it was also necessary to develop focused social media advertising. The business was able to determine which messages will resonate with their target demographic the best thanks to Facebook’s analytics tool.  

Since Anchor Trust introduced their chatbot, their hiring procedure has advanced in the following ways: 

Global Energy Firm 

An energy firm with a global presence was struggling with a serious digital divide between its internal and external operations. For instance, their learning materials and compliance training were utterly ​outdated​​ and worthless. The problem was ​addressed​​     ​ creatively by the company’s Interim HR Change and Innovation Director using gamification. This led to the creation of a new training software that allows staff members to earn ​badges​​ and achieve high marks that are visible to all staff members. If the training is not finished with a certain amount of time, the percentage completion is noted and email access is restricted. This approach showed impressive results where it ensures an almost 100% uptake on the test and Compliance training was completed in 3 months instead of 9.  

Grolsch 

It can be difficult to communicate about advantages and working conditions at the international beer brewer Grolsch. It’s challenging to keep up with all the changes and individual preferences when there are over 650 employees. And that is precisely why they desired a change. A more effective, environmentally friendly approach that would provide workers with better understanding of their working conditions and perks. This involved the company’s employment policies being digitalized and placed in a system that displays each employee’s unique circumstances and benefits whenever they register for a change. MyBenefits is a digital HR system designed to meet the needs of the modern’s working era without adding to the administrative burden. Grolsch is now using the technology to collect information about its employees’ working circumstances. An employee satisfaction survey conducted by the business revealed an increase in contentment from a 6.8 (out of 20) rating for the previous, paper-based system to an 8.2 rating for MyBenefits.  

KPMG 

The goal at KPMG Belgium was to enhance employee onboarding. There was no pre-boarding procedure in place at the company for the new employees. This occasionally extended the time between when they signed the contract and their first day at work, especially for recent graduates. KPMG made the decision to deploy an integrated and secure onboarding software solution to address this problem and establish a structured approach. Now, the onboarding process for the business begins as soon as the contract is signed. The app provides new hires with all the practical information they require before their first day, including contract information for their new co-workers.  

Links

Cantoni, F., & Mangia, G. (2019). Human Resouce Management and Digitalisation. Routledge. https://www.routledge.com/Human-Resource-Management-and-Digitalization/Cantoni-Mangia/p/book/9780367583095 

da Silva, L., Soltovski, R., Pontes, J., Treinta, F., Leitao, P., Mosconi, E., . . . Yoshino, R. (2022). Human resources management 4.0: Literature review and trends. Computers & Industrial Engineering. https://mobidev.biz/blog/human-resources-hr-technology-trends 

Frick, G. (2022, Decemeber 28). 12 must-read digital transformation books in 2023. Opgehaald van TechTarget: https://mobidev.biz/blog/human-resources-hr-technology-trends 

Joseph, E., & Dhanabhakyam, M. (2022). Role of Digitalisation post-pandemic for development of SMEs. https://www.igi-global.com/chapter/role-of-digitalization-post-pandemic-for-development-of-smes/297331 

Mihova, T., & Ivanova, I. (2020). Digitalization of HR activities in industrial. Plovdiv: IOP Publihsing. https://www.sciencedirect.com/science/article/abs/pii/S0360835222001814 

Monica. (2022, November 7). Digital Transformation in Human Resource. Opgehaald van Learn Transformation: https://mobidev.biz/blog/human-resources-hr-technology-trends 

Mosca, M. (sd). DIGITALIZATION OF HRM : A STUDY OF SUCCESS FACTORS AND CONSEQUENCES IN THE LAST DECADE. Opgehaald van University of Twente Student Theses: https://essay.utwente.nl/82872/ 

Samson, H., & Agrawal, V. (2020). Effectiveness of Digitalisation in HRM: An Emerging trend. Journal of Critical Reviews. https://www.jcreview.com/admin/Uploads/Files/61b8ff3ed8d492.79107647.pdf 

Strielnikova, K. (2023, January 5). HR Technology Trends in 2023: Digitalization with a Human Touch. Opgehaald van Mobidev: https://mobidev.biz/blog/human-resources-hr-technology-trends 

Thomas, G. (2020). Digital Maturity of HR in SMEs. European Journal of Economics and Business Studies. https://revistia.com/index.php/ejes/article/view/5522 

Ulrich, D., Younger, J., Brockbank, W., & Ulrich, M. (2012). HR from the outside in: 6 competencies for the future of human resources. McGraw-Hill Professional. https://www.amazon.nl/HR-Outside-Competencies-Future-Resources/dp/0071802665/ref=asc_df_0071802665/?tag=nlshogostdde-21&linkCode=df0&hvadid=454825448149&hvpos=&hvnetw=g&hvrand=17832400401627217784&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=1010338&hvtargid=pla-467231395875&psc=1 

Videos

(2023). Opgehaald van WhatFix: https://whatfix.com/blog/hr-digital-transformation/ 

School, E. B. (2020, November 10). Human resources and digitalisation. Opgehaald van YouTube:

Verlinden, N. (sd). Back to basics: What is digital HR? Opgehaald van AIHR: https://www.aihr.com/blog/back-to-basics-what-is-digital-hr/ 

Verlinden, N. (sd). HR Digital Transformation: The 6 stages for success. Opgehaald van AIHR: https://www.aihr.com/blog/guide-hr-digital-transformation-hr-transformation/