Done right, digital transformation can positively touch every part of your business—from improving the customer experience to the ability to attract and retain top talent, to enabling employees to perform to streamlining operations. How do you get those sought-after results, though? My partners and I write and speak on the topic of digital transformation all the time and, more importantly, we’re right there in the trenches with our clients, working with them on a daily basis helping navigate the digital transformation process. The most important element of successful digital transformation is understanding that it’s not at all about technology. Success with digital transformation, for any company of any size, is all about just two things—people and culture.
Recent research from IDC agrees, and we all agree that the role Human Resources plays in successful digital transformation is a very large one. The IDC report HR Must Deliver on Transformation shows two of the top four barriers to success are people and culture, illustrating the point that Human Resource teams are critical to the success of digital transformation. Let’s explore some ways embracing a mindset of “Strategic HR” can drive digital transformation.
HR’s Role in Digital Transformation
The IDC data found some 85 percent of companies have started digital transformation processes, and of course that percentage will continue to rise. Human Resources, however, isn’t always the first to be included in digital transformation initiatives, especially if companies stick to the same strategies to recruit, hire, engage, manage, and retain employees they’ve used in the past. The conundrum can leave HR in a repetitive cycle of dealing with and delivering underwhelming results that can lead to subpar business outcomes (see Figure 1).
Figure 1. Source: IDC
What’s the Fix? The Answer is Embracing Strategic HR
Strategic HR is the new breed of HR practice, and a part of the business focused not solely on administrative tasks but also on business processes throughout the organization. Digital transformation is about people, and culture, not technology, and since HR is in the people business more squarely than any other department within an organization, it is critical to involve HR pros in every part of the digital transformation process. Attracting top talent, hiring and onboarding practices, ongoing education, training, and career advancement, fostering a culture of collaboration, fostering engaged, committed employees, committing to initiatives designed to create a best places to work environment that focuses on the retention of top talent—all these things are in the realm of the HR team—in every organization. And these things, much more than any technological advances or software implementation will lead to a company’s success in navigating the process of digital transformation.
How Do HR Teams Become Strategic HR Partners?
It makes sense, doesn’t it? So how do you make that happen, especially if your HR team is viewed largely as administrative at this point in time? Here are some things to think about and five ways HR teams can embrace being legitimately “Strategic HR partners” within an organization:
- Keep the workforce engaged. An engaged workforce is a more productive workforce, but how do you keep employees focused and invested in an age of short attention spans and constant change? For starters, you can change how you approach reviews. Employees are no longer interested in waiting around for the annual performance review business, and much prefer casual check-ins, feedback and more frequent interaction with their managers. The IDC data supports that, although change is happening at a slow pace. A whopping six percent of Fortune 500 companies report having ditched the annual performance review and employee rankings and instead opting for interaction with employees that focuses more on personal development, feedback, course-corrections where necessary, and improved opportunities for learning. IDC also recommends offering “social learning,” utilizing database and communication software to make sure each employee is continually engaged as both a teacher and a student.
- Build an agile, flexible, collaborative workforce. Workforce agility is critical, especially as tech makes it easier than ever to collaborate from anywhere. With more companies leveraging remote and freelance employees, making flexibility and collaboration the foundation upon which business is built is imperative. It’s not unusual for the enterprise HR budget to allocate 30 percent for freelance contractors and consultants, so if you’re not yet focused on collaboration initiatives, now is a good time to start. Luckily, that won’t be difficult, as the enterprise collaboration market is booming and is on track to hit $49.5 billion by 2021. (For more on this topic, I covered collaboration and the role Enterprise Social Networks can play in this post over on our Futurum Research blog: The Operating Model for the Digitally Transformed Enterprise. HR teams are having great success leveraging ESNs to engage teams, encourage collaborate, and foster innovation that drives the businesses forward.)
- Develop, attract, and retain the right talent. There are lots of wrong ways to approach hiring and retention. My friend Meghan Biro has written about them extensively. Read: How to Stop Your Bad Hiring Decisions. To make it more difficult, good candidates can be increasingly hard to find, and they are increasingly selective about the opportunities they pursue. One way to get off on the right foot is by showcasing your corporate culture during recruitment, as that’s a key piece of information employees look for these days. What you say a company is and a job role is, and what they see with their own eyes and how they feel when they are meeting, interviewing, and getting to know your recruitment team can sometimes be different things. If that is the case in your organization, fix it. Be who you say you are and lead with great culture above all else. That is the honey that attracts the best and the brightest.
- Leverage Data. Today’s best-in-class, most innovative companies and their HR teams are also looking to data as part of the talent recruitment and talent management equation. Today it’s possible to leverage technology like predictive analytics, artificial intelligence (AI), sentiment analysis and others to help identify and vet candidates who have the professional skills and personal characteristics that best fit your company. Once hired, similar technology can be used to monitor performance, job satisfaction, and even predict if or how long a candidate will stay with a company and a role. The integration of data into the HR strategy allows companies to keep their finger on the pulse of the collective happiness of a workforce and make changes that are intended to keep people happy, motivated, challenged, and well, most importantly, People don’t stay at jobs they don’t like, they look for ones they do. If HR teams want to retain top talent, they’re going to have to work harder than ever before, and use data in ways that can help them do that.
- Demand a seat at the table—and be ready to talk numbers—and tech. In their report, the IDC found HR leaders led the digital effort a mere five percent of the time, likely because their departments are often seen as policy-driven or administrative in function and not as key drivers of the business and business success. That perspective could not be more wrong. To buck this trend, HR leaders must do more, and that includes demanding a seat at the table. Once you’ve got the seat at the table, be prepared to present on the value a strategic HR team can deliver to the organization as a whole. That includes data on things like:
- What improved motivation and performance can deliver in dollars and cents
- What improved employee retention means to the bottom line of the company
- How integrating automation into the business operations can reduce operating costs
- How better employee relations leads to happier, more satisfied customers, and the impact that has on the business;
- How technology can help match employee skills to tasks;
- How technology can lead to a better inflow of new talent, keeping the pipeline full and the company operating at full speed;
- How the standardization of HR processes, driven by the adoption of technology, can have a big impact on culture, making onboarding, talent management, and talent retention all more effective within the organization. Are you seeing a trend here? Technology plays a huge role in the transition to a Strategic HR practice. Automating standard HR tasks—and using the technology to help employees better connect and form teams—frees up HR to focus on building culture and retaining the best and brightest. There’s more, too—HR automation can lead to a whopping 65 percent increase in employee motivation and performance (see Figure 2).
Figure 2. Source: IDC
Embracing digital transformation is table stakes in today’s competitive business world. Regardless of your industry or the size of your company, your culture and your people will lead the way to successful digital initiatives and overall business adaptability. If you want both—and you do—there’s a clear case for HR to be leading that charge.
Has your company invested in digital transformation initiatives? What role does HR play today? Do you see that changing in the future? I’d love to hear your thoughts.
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