The Research Says: How to Digitize HR

Although growth is always a business issue, right now it is the business issue. According to the “KPMG Global CEO outlook survey” of 1,200 business leaders, growth is their top priority. To support this growth, the CHRO and other HR leaders have the opportunity to put what they do front and center—almost 80 percent of the CEOs surveyed expect to increase hiring, and they acknowledge that managing talent will be especially key in the midst of technological investment and change.

Given the pervasiveness of technology coupled with the pressure to better find and nurture talent, it’s no surprise that HR at many organizations is becoming increasingly digitized and automated. According to the authors of Deloitte’s “Global Human Capital Trends 2016” report, “The era of true digital disruption has finally hit HR.” But they find that despite some shining examples of efficiency and insight powered by design thinking and the right technology, many HR departments have yet to embrace a fully digital experience.

In a world where people are increasingly expecting anytime, anywhere connectivity and an easy, intuitive user experience for both work and play, we see mobile as a good indicator of the digital maturity of an HR organization. Deloitte research found that when it comes to mobile, only 7 percent of companies use it for coaching, 8 percent for time scheduling, 13 percent for recruiting and candidate management, and 21 percent use mobile for leave requests.

Obviously, there’s room for improvement in many organizations. The Deloitte authors write that “HR’s digital transformation begins with a change of mind-set within the HR organization, prioritizing connectivity, real-time operations, platforms, automation, and mobile-first.”

For companies who are in the early stages of digitizing HR, or have not yet begun, the first suggestion the Deloitte authors give, and in our opinion the most important, is to challenge HR to start with a digital-first strategy. “The digital enterprise and digital HR are a revolutionary leap forward, not an incremental step,” write the authors.

Another piece of advice the authors give is to embrace design thinking: “Social, mobile, analytics, and cloud tools are only useful if employees adopt them. HR must begin with employee needs and the user experience. Incorporating design thinking throughout the process will help companies maximize the impact of new digital technologies.”

The authors dedicate a chapter of the Deloitte study to design thinking: “Simply described, design thinking means focusing on the person and the experience, not the process.” We think design thinking is an especially useful, holistic way to approach HR transformation—technological and otherwise.

Other advice from the Deloitte authors on digitizing HR includes:

• Take an agile approach to integrating people, technology, and processes. Think modern software development, which usually relies on nimble teams and constant iteration.
• Learn from your company’s early digital adopters. Marketing and operations likely have valuable experience and best practices to share.
• Imagine HR and the employee experience in real time. The authors note that this a step beyond shared services and HR service centers with agreed-upon SLAs, adding, “With every employee having a smartphone, HR teams can automate, streamline, and adopt more real-time and digital-first operations rather than process forms and transactions.”
• Integrate analytics and reporting. Make this part of the digital platform from the very beginning for real-time business intelligence. The alternative is compiling reports that might be out-of-date by the time they’re finished.

To the list above we’d add it’s important to use the larger economic environment to make a solid business case for fully digitizing HR. The KPMG survey found that about 40% of CEOs doubt the sustainability of their current business model, but nearly twice that number think their firms will be essentially the same in three years—which we see as a disconnect between aspiration and execution.

“In this context,” the KPMG authors write, “CEOs need to understand that business transformation requires more than innovation and technology. It means embracing continuous change from the inside of the organization as well as great flexibility.”

Whereas the HR organization was once seen as mostly a back-office function, progressive CHROs are now becoming the most vocal and visible agents of internal transformation. What’s more, the CHRO title is increasingly evolving into Chief People Officer or Chief Employee Experience Officer.

This new breed of HR leader is helping their peers understand why the employee experience—which includes democratizing data at all levels of the organization, providing a consistent user experience for all HR processes, and unifying applications to better link insights to actions—is vital to a company’s long-term financial health. We think that these HR leaders are well-suited to support the CEO growth imperative.