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Mastering digital HR: a guide to HR transformation

Digitalisation is a vital process for organisations to survive and thrive. Digital HR is no exception. As such, businesses choose to digitally transform their HR departments to gain efficiencies, improve processes and boost the employee experience. To reach full optimisation, digital HR requires correct implementation. In this article, we look at the necessary steps to transform the HR function and digitalise it. We also provide some essential knowledge and understanding of what digital HR is, why it is important for your business and its key benefits.

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What you need to know about digital HR

Businesses that have not already digitalised their HR functions may be thinking about this strategy. Human resources departments are often at the top of the list when organisations undergo digital transformation. The process is an adaptation to new ways of working and brings many benefits to businesses. Before looking into these benefits in detail, this section defines digital HR and explores how it works.

What is digital HR and how does it work?

Digital HR: a definition

Digital HR is the result of HR digital transformation. It means that HR processes and services are optimised through the use of technology. By automating processes, efficiency gains are achieved and the HR function becomes more effective. In other words, digital HR means moving away from manual operational tasks and paper-based work to automated and digitalised ways of working. It is the optimum use of technology within the HR function and involves the integration of software and technology across HR, thus impacting payroll, recruitment and people management.

How digital HR works

Digitalising HR means using data analytics throughout the employee life cycle. The approach integrates technology from the recruitment process all the way to offboarding. As such, it impacts talent acquisition, onboarding, payroll, performance management, learning and development, employee experience and offboarding. It uses software and technology to automate operational processes and analytics to develop the HR strategy. Digital HR often means moving towards automated payroll and self-service solutions. It also facilitates the recruitment process through the use of statistics.

By freeing HR teams from operational tasks, digital HR elevates the strategic approach of HR departments.

The benefits of digital HR

For businesses, there are many benefits of digital HR. The list below provides an outline of these advantages that may boost the efficiency of your business.

Optimised efficiencies and agile operations

Digitalising HR means moving away from paperwork and operational tasks and moving towards automation. The benefits of this transition are straightforward. HR teams stop working with spreadsheets and spending time updating them and instead, can focus on strategic HR actions that will bring more value to the business. Additionally, automation reduces human error and brings more accuracy.

Structured and enhanced internal communication

When communication is digitalised, information flows faster and in a structured way. This brings huge advantages to organisations that use technology. They can evolve faster and build solid relationships with their employees. Digital HR allows for cascaded communication through the filtering of hierarchical levels. It also creates a platform where all the policies can be stored.   

Boosted employee experience

The combination of agile HR operations and enhanced communication brings more to organisations. They can use these tools to create gamification and drive employee engagement. By doing so, they create a bond between employees and with the organisation. Digital HR has an impact on the overall workplace and employee experience and engagement.

Positive impact on employee turnover

Digital HR brings efficiency to performance management. It provides visibility on top talents. These high performers can be spotted and put forward for promotions. As such, employee turnover is impacted positively. HR digital transformation brings better performance management and ensures that feedback is delivered. It also impacts learning and development by providing a personalised approach.

Performance tracking and monitoring

For businesses, it is essential to monitor employee performance. When not digitalised, information can be lost if a leader leaves the business. Digital HR ensures that there is consistency in the performance evaluation process and that everything is tracked and recorded.

Through tools and systems, performance management can be structured with clear goals, competence evaluations and even ratings.

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Increased HR productivity

As mentioned earlier in this article, digital HR means automating processes. By doing so, it moves HR staff away from operational tasks. It increases their productivity as they can focus on added-value actions for the organisation. Companies that implement digital HR see their entire HR department’s productivity thriving.

Focus on strategic recruitment

Recruitment is challenging for many organisations. Searching for talent can be time-consuming yet it is essential to the success of the business in the long run. With digital HR, the recruitment process is streamlined. Candidates are evaluated through a clear process and the search can gain scale.

Eased payroll management

Payroll is highly operational. When digitalised, this part of HR can be automated and the process significantly streamlined. Doing so decreases human error but can also help to ensure compliance with tax regulations.

Increased visibility leading to better decision-making

With a strong database, organisations are able to make prompt and informed decisions. HR transformation brings a wealth of data on performance, turnover, training and much more.

Increased HR compliance

Compliance with regulations can be a headache for businesses. This HR responsibility can be transformed with digital HR. All the policies and regulations are ingrained in the system.

For more on HR compliance, take a look at Data protection and HR GDPR for employers.

The list above is by no means exhaustive. The benefits of HR digitalisation make this transformation an undeniable path towards business optimisation.

Why undergo HR transformation and how to do it

Now that we have seen the benefits of HR digitalisation, you may be considering this advancement for your business. However, the reason for the transformation calls for clarity from the start in order to manage stakeholders’ expectations. In this section, we look into the ‘why’ and the ‘how to’ of digital transformation.

Why undergo HR transformation?

Any transformation has to make business sense. The reasons why it goes ahead call for being clearly stated so that they are easier to accept by all. Before you launch a digitalisation project for your HR department, it is helpful that you reflect on the objectives of the transformation. Keep the needs of the organisation in mind throughout the process. Businesses are advised to create a strategy around digital HR and fully understand their state of play versus what they want to achieve. Ensuring that they have a long-term approach to HR so that they select their solutions appropriately can be an important step. Doing so can help to avoid unnecessary costs and lead to a smoother transition.

6 steps for a successful digital HR transformation

Ensuring the successful implementation of digital HR is synonymous with its success. Any transition requires the appropriate change management to be adopted by the entire organisation. Additionally, the solution needs to fit the needs and make things easier for all. Here are a few steps to consider to help strive for successful outcomes.

Step 1: Analyse the state of play

Like with any transformation, understanding the current state of play is essential. This will help create a strategic plan and shape the journey towards the desired outcomes. Analysing the state of play means creating a map of what the situation looks like today with its pros and cons.

Step 2: Prepare for a shift towards technology

Technology is not always welcomed by all. Businesses undergoing digital transformation need to be clear about the benefits this brings and create a culture of innovation. Encouraging technology will result in easier change management.

Step 3: Select the most appropriate solution for your business

There are a lot of solutions out there when it comes to digital HR. Ensure you are fully aware of what the organisation wants to achieve by digitalising the HR function. It is essential that the solution chosen fits the organisation’s desired outcome and that it can be integrated. Can it be customised? Is it a cultural fit? Does it have the desired functionalities? All these are questions that should be asked when selecting your digital HR partner.

Step 4: Create the change management plan

The transformation will require all employees to shift their behaviour. For example, they will move away from paper payslips to a self-serve online solution. Some will be more resistant to change than others. Ensure you create a strong change management plan before you launch the solution. A good change management plan will incorporate all the communications associated with the change and promote its values.  

Step 5: Deliver communication and training

Don’t be shy with communication. Provide training for all employees, either through videos or open forums. Ensure that this training is incorporated into the onboarding of new employees. The more you increase knowledge of the solution internally, the more it will be effective.

Step 6: Implement the solution and measure its performance

When the solution is implemented, don’t just leave it there. Collect feedback and evaluate the performance of the transition. This might lead to some adaptations and tweaks to improve the solution.

Implement digital transformation at the right time and for the right reasons. HR department managers tend to conduct wide research on the technologies available on the market and how they can serve the organisation.

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