Digitalization and HR

Its been a while now that we have been hearing the buzz words like Big Data, Machine Learning, Internet of Things (IoT), etc. These are terms which relates to Digitalization process that we are experiences in our day to day transactions whether at office or at a market place. As per KPMG’s Digital Transformation Report 2017, 79% of organizations worldwide believed that ‘advance technologies’ are a must have within the next 5 years.  

After the fall of Kodak and Nokia, all organizations are focusing on how to adopt to changing technologies and practices in order to remain relevant and sustainable. This is the reason why many organizations are looking at digitalizing their systems, their products or simply ensuring that they have the right skills for the future or how can the organizations develop more agile ways of working.

As per Deloitte’s Global Human Capital Trend Report 2017, in the digital age there will be a dual challenging role for HR – One is to transform HR Operations and second is to transform the workforce and the way work is done.

HR’s impact in the digital world will be critical and will be in three spaces:

·       Digital Workforce – Designing talent practices, hiring digitally savvy employees and creating a culture of innovation.

·       Digital Workplace - Enabling productivity through modern communication tools and softwares.

·       Digital HR – Developing and implementing digital tools and apps to deliver HR solutions and innovations.

It will be imperative to have special (customized) human resources software that will help us effectively manage talent as well as optimize our plans and strategies based on data.

There are four pillars for digital transformation:

• Mindset – The willingness and enthusiasm to adopt digitalization
• People – The skills and competencies among the workforce to adopt digitalization
• Processes – The strategies for communicating and effective change
• Technology – The actual software tools

The weightage of Technology impacting the digital transformation will not be more than 10%. It’s the people, mindset and processes that will account for rest 90% where HR will have a value to add.

A major set of employees in the organizations (specially in India and developing countries) have a fear that machines or softwares will take away their jobs. HR would have a critical role in counselling these set of employees through soft skills and skill enhancement which would enable them to make them better and look at all growth possibilities lying ahead of them. It will be important for HR professionals to have an integration plan, starting with transparency and communicating the advantages of the transformation to the employees.

In most countries like India where the legal compliance is so complex and ever-changing that employee administration still accounts for most of the HR function’s daily work. Hence, HR processes should be among the first to be digitized and outsourced. In North America and Western Europe today, at least 30% of companies already outsource their payroll management and the trend is growing. In Belgium outsourcing reaches 90%.

Hence, it will not be incorrect in saying that HR will be one of the key buttons to activate in the digital transformation process.