With the HR technology market rapidly growing, many organizations are falling prey to the “fast-mover” syndrome without considering long term goals. We discuss how to think beyond quick wins and leverage a digital HR strategy to add value to the organization.
We are currently witnessing a boom in the HR technology market which is expected to reach $30 billion by 2025, growing at an astonishing CAGR of 10.4 percent. This indicates a rising demand for digital tools in the HR space, from small and large businesses alike. However, this transformation isn’t always holistic or synchronized. In its present state, HR tech tools often exist within the fragmented HR tech stack, instead of together working towards long-term business goals. That’s why it’s important to outline a digital HR strategy, which takes a comprehensive approach to organizational transformation instead of just functional change.
What is a Digital HR strategy?
In the traditional model, HR technologies were implemented to solve specific business problems. For example, an ATS can help handle bulk hiring, employee self-service could reduce HR workloads, and time & attendance tools could boost productivity. However, in the absence of a well thought out digital HR strategy, these exist in silos and do not add great value to the business.
A digital HR strategy, on the other hand, takes a bird’s eye view of a workplace without singling out specific problem areas. It envisions the ideal to-be-achieved state where the different HR tools work seamlessly together, going beyond day-to-day operations to unlock bottom line improvements. Instead of reacting to a challenge, like poor engagement, a digital HR strategy will proactively build an employer brand which digitally creates a nurturing work climate.
This is just an example of what a digital HR strategy could achieve. Through detailed conversations and rigorous planning by decision-makers, the strategy could encompass numerous business goals and position HR as a center for value generation.
3 Things You Need to Implement a Digital HR strategy
Because this is an end-to-end transformation initiative, organizations need a solid foundation when executing their digital HR strategy. Briefly, this includes:
Consistency between processes and locations: HR departments often operate in silos. For example, hiring data may not be shared with the payroll team and performance management workers may work independently of the compliance division. This makes the exchange of data difficult, hindering the implementation of a 360-degree digital HR strategy. Therefore, consistency, powered by standardization, role structuring, and accountability is the first step.
Process integration and digital continuity: Once vertical-wise and locational consistency has been achieved, organizations can go ahead with integrating HR processes. This means data from one stage in the employee lifecycle will be made available to stakeholders managing the next. Performance data, for example, can be used to assess new recruits, substantially improving hiring quality and driving business profitability. Integration is key to achieving digital HR strategy goals such as this.
The application of HR analytics: The final step in enabling a successful digital HR strategy is the deployment of analytics; this should be carried out in four stages: basic dashboards, reporting capabilities, people analytics, and finally, predictive models. Analytics will widen the scope of the strategy, ensuring it is equipped to meet diverse and dynamic requirements, as the organization grows.
Key Milestones on Your Digital HR Journey
In its ideal state, a digital HR strategy will align HR priorities to business outcomes — employee engagement to customer experience, skill-based hiring to productivity, workforce analytics to cost reduction, and more. But to get there, organizations must first look out for the following milestones:
- Digitization of HR processes in-sync with the larger strategic vision
- Decentralization of HR tasks for greater accessibility and workload optimization
- Transformation of HR into a value-adding business unit
- Review and iterate the digital HR strategy for continued impact
Modern organizations need to clearly outline their HR agenda, find technologies to help reach these objectives, and ensure there is a close interlinking between HR and the business as a whole. This will ensure that a digital HR strategy isn’t just another “innovation project” influenced by hype, but a way of furthering genuine organizational interests.