The Digital Transformation in HR
I was recently asked “how would digitization change the HR landscape”. I replied by saying that the more important question was “how much HR leaders would have to change to become digital ready” since it was not easy to estimate the enormity of change it would have to undergo during digitization.
Digitization would not be a wave that would hit the shore and disturb some sand castles, it would be a tsunami that could change the core geographical identity of the city. Gone are the days when HR leaders were expected to be savvy with business numbers/trends/jargon or speak the language of business leaders, they are now expected to lead the change by executing smart digital solutions that will tangibly improve the topline and the bottom line.
The influence of technology is evident in each business function and HR is no exception. Actually, HR might be catching up with other business functions in adopting digital technology. However, the good news is that technology has the ability to leap frog and bridge the time gap with just a stroke of innovation. So, it really doesn’t matter if analytics was first adopted by marketing professionals to understand consumer behavior. For, today HR applications have developed capabilities for giving employee engagement insights with equal precision.
This catapulting has come with its own set of challenges. HR leaders will witness challenges on two fronts. It will be difficult to keep up with the high velocity of change, for what’s novel today will be clichéd tomorrow and outdated the day after. The extent of the changes may see some of the oldest practices, formats and even theories thrown out of the window in this new digitally connected, continuously monitored and data-driven world. The new ecosystem will be very demanding for HR leaders.
Business will expect HR leaders to quickly comprehend the capabilities of these innovative digital solutions and use them in executing talent strategy for desired results. However, when faced with such formative changes, HR managers will have to unlearn a lot and create new rules to deliver mandates in this new reality. Imagine, what would be the predicament of a performance management expert who is used to an annual or at best four quarterly performance assessment cycles in which goal setting & KPI finalization was followed by performance assessment and then normalization of ratings. With one sweep of innovation, it will be possible to perform these consecutive steps simultaneously and throughout the year. The performance trends of individuals/teams/departments/regions/products would be available like a stock market index and HR professionals would be expected to work like market makers who are continuously engaged with leaders to navigate employee productivity in the chosen direction.
I can clearly see that the days of fixed annual compensation with typical fixed and variable components are limited. Imagine if productivity and business achievement can be put through an algorithm to calculate the daily remuneration for each employee. The entire expertise and knowledge of a compensation expert would be rendered archaic as new norms of contracting would be written for this paradigm shift.
Similarly, workplaces will undergo unthinkable changes if people no longer opt for permanent employment and only come together for common purpose and disassociate after achieving it. It will be puzzling for current leaders to identify what will attract, engage, motivate and retain talent in such a fluid environment. According to me, acclimatizing to this new reality will be the biggest challenge that every HR professional will have to face. HR will have to deliver in these new and challenging times by leading path breaking changes in the organization by redefining the way business is conducted. This by no means is going to be either simple to comprehend or easy to implement. But when done well, the dividends will be in huge multiples.
While digitization will be making these formative changes to HR, it will also play a very supportive role in inducing productive changes at the operational level. Many routine and standard jobs will be automated or taken up by robots, thereby freeing HR professionals to do more mind jobs rather than transactional work. The roles being referred to here are not yesterday’s routine jobs like processing bills, churning out payrolls or filling returns, we are talking about base-level professional roles like preliminary screening of candidates or first round of shortlisting. But, since technology will equip professionals with refined decision- making support systems, HR leaders will be able to perform bigger roles and partner business heads or promoters for business success with greater ease.
Digitization will drastically collapse the time in identifying trends. The waiting time for long-winded data collection and analysis to measure various employee-related parameters will disappear. Such parameters will be available to HR leaders round the clock on their mobiles, making it possible to not only spot the early signs of trouble but also recommend corrective measures with greater confidence.
The automated data collection and analysis systems will make it easy to build scenarios and predict multiple possibilities with a high degree of certainty, leaving the job of evaluating alternatives and executing interventions to HR leaders. Digitization is going to amplify the capability of each HR professional to achieve higher goals for the organization. But with this will come the responsibility to deliver consistent, correct and accurate decision making that will make organizations stronger, long lasting and future ready.
While digitization will force some established practices and norms to be changed, it will also open new avenues for HR professionals. I foresee transformational changes in the HR function. It will be extremely unsettling for rigid minds as old rules will give way to new working styles. However, it will be exciting for those who want to evolve and reinvent. To remain relevant and witness this journey of evolution, HR leaders will have to remain in the learning mode for long. Otherwise, change will leave them outdated and outclassed.
Author-Maynk Bhatnagar has over 17 years experience as an HR professional and currently he is General Manager- Human Resources at Network18