What is HR digital transformation?

HR digital transformation is the ongoing change of manually operated HR processes to automated, data-driven ones. Replacing manual interventions, such as time-consuming, error-prone paperwork, can foster efficiency, productivity, and operational resilience. Because HR processes affect the entire workforce and how work gets done, HR digital transformation can drive the overall success of an organization. Leveraging digital tools like chatbots, onboarding software, data analytics, and automation can streamline processes and make them easier to manage.

Related: HR Responsibilities—What to Expect?

Benefits of HR digital transformation

There are many benefits of digitally transforming your human resources department:

• Improved employee satisfaction and engagement: As your company scales, so do employee headcounts to help manage increasing workloads. More employees means more work for HR. Streamlining communications with digital transformation tools can elevate connectedness, keeping employees informed and engaged.

• A quicker, improved recruitment process: Poor interview experiences and the lack of real-time response are common reasons applicants reject job offers. Companies who adopt automation in their onboarding and recruitment processes can also use it for orientation and training, which increases candidate confidence in their joining decisions. Chatbots are becoming a more powerful component in shaping how applicants have their questions answered about your organization’s hiring process.

• Increased efficiency: Companies who adopt HR digital transformation often minimize heavy workloads, eliminate error-prone, time-consuming manual processes, and gain departmental and organizational efficiency.

• Increased data accuracy: Digital HR leverages AI technology to help with workloads. Minimizing workloads lowers the risk of mistakes and allows more focus on high-value tasks. AI can keep databases up to date with high-level data accuracy.

• Improved regulatory compliance: Automated HR processes can help maintain compliance with governance and company policies. These digital tools have alerting systems that can flag issues if a violation happens, prompting immediate action to minimize the threat of data breaches.

• Increased company and employee security: Your employees share phone numbers, e-mail addresses, and sometimes personal information to gain access to the increasing number of digital log-ins. This can leave them and your company vulnerable and susceptible to theft and fraud. HR digital transformation can offer better data protection and create robust security measures to protect employee, customer, and company data.
• Improved cost efficiency: HR digital transformation can significantly reduce long-term capital expenditures and day-to-day operating expenses. Less time and effort spent on daily processes enables you to focus on other things, like business strategies that can create new revenue opportunities.

Read more: Creating an Effective Human Resources Plan

HR digital transformation challenges

Digital transformation is inevitable for offering operational excellence and staying competitive in most markets. AI is a powerful and effective tool that can improve efficiencies and reduce costs. But HR digital transformation doesn’t come without its challenges:

• Achieving proof of concept can take considerable research and hours of work.
• Legacy equipment and technology can be expensive to upgrade.
• Employees, management, and owners are innately resistant to change.
• The entire organization must adjust to new processes and technologies.
• Not using the right software can risk data privacy.
• Creating additional employee training and development programs.

The eight stages of transformation

Before embracing HR digital transformation, you can analyze your priorities and follow these eight stages to help minimize the risk of failure and optimize your implementation costs:

1. Establish a people-first approach

Your employees are the foundation of your business and a central resource for any company. Focusing on a people-first approach during your introduction to HR digital transformation can prevent immediate failure and future problems, since everyone evolves in their roles, including staff, management, leadership, and clients.

2. Empower change management

Many people resist change, especially when they’re comfortable with specific procedures and methods and have followed particular strategies for a long time. Help your team better adapt to change by having your HR leaders make every effort to help them navigate the changes and show how new technologies can make their job easier. Proactively tackling the unknowns can ensure an elevated employee experience without jeopardizing company morale.

3. Assess existing HR technologies

Taking inventory of your existing HR processes often reveals technologies and tools that don’t deliver employee experiences that align with today’s standards. You may also find that your current software doesn’t help improve employee performance. Simple queries like passwords, regulatory policies, credentials, and holiday leave can too often have long wait times. System integrations such as HCM (Human Capital Management) or HRMS (Human Resources Management System) tools can be imperative to successful digital transformation.

4. Identify transformation areas

There are some challenging HR processes—such as database, compensation, and onboarding management, attendance, time tracking, payroll, recruitment, and orientation—that can be critical to organizational growth. Prioritize which processes require immediate transformation in terms of productivity and employee experience so you can ensure your automation solutions can improve these processes.

5. Ensure smooth integration

You can enable a smoother integration by collaborating with your IT department regarding new processes and technologies. Good communication helps to minimize risks and ensure the successful deployment of your solution so you can start maximizing your investment and leveraging the benefits of automation.

6. Establish a culture of collaboration

Working together promotes a healthy company culture, so create a plan to help employees with training and to simplify learning. Guide them through the implementation process with advanced warnings before introducing new phases or processes. Build employee confidence and improve efficiency by collecting their feedback on the project performance.

7. Implementation timeline

Timing can be essential for a smooth rollout. Larger organizations may need to implement the transformation in phases, whereas small- to medium-sized companies can roll out in segments. Some businesses take a particular process section and experiment as a small proof of concept. Communicate your initiation plan with the whole organization and implement it in a timely manner.

8. Select your platform wisely

Optimizing your budget can help you determine your needs. You can choose a few software integrations to streamline your existing models, or you may prefer the flexibility, customization, and scalability that a complete automation solution can bring. Leveraging automation tools can help your HR department deliver effective communication, recruitment, and onboarding processes for company-wide success.

Read more: 16 Steps to Effective Virtual Onboarding (with Checklist and Sample Schedule)

HR digital transformation examples

What will your HR department and surrounding environment look like? Here are some examples of HR digital transformation:

• Digital onboarding : Predictable areas like employee onboarding are well-suited for AI-powered chatbots, making the process faster and reducing employee attrition. They can also provide ample flexibility for candidates who want to ask questions about the organization or the next phase of the hiring process. If your digital transformation is lacking in any way, employees may require additional help or make more mistakes, leading to frustration and disengagement.

• Digital signatures: API-enabled tools and chatbot integration can improve the digital signature process. Create an event for a digital signature on a compatible platform like Slack or Microsoft Teams, allowing your applicant to access it through chatbot conversation. Candidates can sign and submit agreements quickly and easily. Chatbot workflows integrated with your collaboration tools can increase cost efficiency while accelerating processes.
• Self-service automation: Self-service automation can relieve burnout from your IT helpdesk. Eliminating the continuous process of resetting customer passwords and other repetitive tasks allows employees to produce more meaningful work faster. Self-service platforms can easily integrate with existing systems, allowing your team to solve low-priority and regular issues quickly and flexibly.

Related: Best Interview Questions to Ask Candidates

HR’s role in digital transformation

Since objectives and goals vary by industry, every organization may have a different outlook for the future; however, aligning your vision with your company’s goals can be essential for a successful outcome. Below are some tips to help you get the best results.

• Keep everyone apprised of the details of the ongoing transformation.
• Encourage and ask for feedback and provide changes when necessary.
• Act and improve on employee dissatisfaction, and involve your software vendor when it’s a technical issue.
• Run frequent training sessions until all employees feel confident.
• Leverage your AI automation tools to check the progress of the transformation and gain insights into the success or failure of your objectives.
• Ensure that any changes you make complement the organization’s and employees’ needs.