Inefficient and inadequate HR technology is a drain of resources, time, and energy. With every advancement in technology, HR functions today are growing much beyond just aligning people and business. From being a cost center to being realized as a strategic partner, HR teams are considered critical enablers for decision making.
While process improvements, efficiency, and cost reduction still remain very much the norm of the HR mandate, HR heads and business partners now have the added responsibility to influence business strategy and deliver measurable impact. But before going down the path of digital transformation, clarity in vision and alignment to overall business goals are crucial for CHRO's to execute a successful HR Transformation.
Here are 4 key steps that must be performed before embarking on HR transformation initiatives:
Establish the Need for Transformation
Before building a digital vision for the organization, it is essential to establish why the change is required in the first place. What are the challenges faced by your organization?
On a macro level, HR functions could be plagued by these few challenges:
- Evolving business scenarios: Agility is the buzzword today, and businesses across industries need to continually pivot to stay relevant in these times. This means the HR function must be a few steps ahead to facilitate managers and teams to evolve with the changing circumstances. And, disparate systems that are not scalable do not fulfill this purpose.
- Expensive and Time-Consuming IT support: Several organizations still rely on third-party IT support for every small upgrade that is both time-consuming and heavy on the wallet. This reliance slows down the pace with which these companies can keep up with external circumstances.
- Shift in Demographics: Workforces across industries today are diverse, with over 4 different generations employed simultaneously. Policies, systems, and processes then need to be flexible and pliant to support information exchange and reskill old workers to create a cohesive culture and working environment.
- Lack of Technology Adoption: Gone are the days when organizations could shove archaic systems down employee's throats. Today's tech-savvy workforce is unlikely to use technology that does not serve the functions effectively. Systems that talk to each other and require limited manual intervention are the need of the hour for businesses to function seamlessly.
- Inadequate data: As the HR function's role becomes more strategic, decision-making across the organization must rely on accurate data and facts. Several organizations today face a blind spot here as they are forced to make assumptions and work with incomplete or incorrect data, which could impact the company's growth in the long run.
- Regulatory compliances: With evolving external circumstances, governance, and statutory compliances, HR teams without prompt tech support end up buried in manual efforts to ensure compliance. Rigid systems that are not scalable and flexible to meet with the company's changing needs often become redundant, leading to duplication of efforts and multiple manual interventions. Besides being a drain on the resources, such interferences are also more susceptible to errors.
Contemplate the challenges you are currently facing, deep-dive to understand how they impact your organization, and explore whether the transformation is necessary. Find out why digital transformation should be the number 1 HR priority in 2020.
Consider if Digital Transformation is the Answer
Once you establish the need for transformation, there are a few critical considerations to ponder before going ahead with it.
A few questions you could contemplate on before considering a transformation further are:
- WHY: What is the purpose behind the transformation? Why is the change required? Why is the change necessary to implement now?
- WHAT: What would be the final outcome delivered through this transformation? Is the result aligned with the overall business goals and futuristic business needs? What could be the possible obstacles to making this happen as planned?
- HOW: How effective are the processes currently? How will you go about making this change happen in your organization? How can you align the investments and resources needed for its success? How would it impact the organization if executed well?
Visualize the HR Transformation
Once you have considered the critical factors and decide to go ahead with the digital transformation, it is time to design a vision for this transformation. By aligning it to your overall business goals, set a vision for the organization's outcome and quantify, or qualify the benefits to be gained.
Adopting HR Technology could lead to automation, enhanced efficiency, better visibility, improved workforce morale, increased compliance, among several other benefits. Digital Transformation could free up the bandwidth of HR teams currently buried knee-deep with admin work to become a more strategic and resource business partner.
Depending on the current gaps in processes and capabilities, design an end-to-end digital roadmap for the transformation clearly identifying these 3 parameters:
- The final outcome: Beginning from the overall goal you wish to achieve and pen down what could be the business impact of these changes. It could be reducing cost per hire or cost per replacement or enhancing employee engagement to retain high potentials. Define the outcome in a specific and measurable manner.
- The desired timeline: Just a vision is not merely enough if there is no timeline to achieve the desired results. Estimate a realistic possibility of when the transformation would be complete and could start delivering noticeable results.
- The change agents: Set up accountability. Assign responsibility internally to individuals or teams, who would lead the transformation. Clarify the investments required to make this transformation happen to get visibility on the return expected from them.
Obtain Stakeholder Buy-In
No transformation can take off successfully without the buy-in of the leadership teams and the key stakeholders.
Before approaching the leadership committee, invest in making a thorough business case that answers these fundamental questions:
- Purpose behind transformation: What are the current challenges faced? Why is the change necessary? What will it help achieve? Is it aligned to the overall business goals?
- Share the vision: What is the expected outcome? What are the consequences if this is not taken up now? What is the estimated ROI on this effort?
- Resources required for execution: What is the investment needed? What are the cross-functional resources or support needed? Who is responsible for leading this change internally?
Beyond just the financial sign-off from the managing committee, you would need the support of senior managers, line managers, and team leaders to ensure the changes trickle down across the organizational hierarchies.
Any change could be met with resistance from the workforce, and buy-in from the ultimate users becomes critical to achieve widespread adoption. Be sure to take the time to guide your employees through why this change is necessary, what you hope to accomplish through this transformation, and how it could benefit them in performing their roles within the organization.
Clarity on the vision and alignment with overall business goals set the much-needed foundation for any successful transformation. Be sure to spend enough time strengthening this base and reap the rewards with a smooth, glitch-free transformation.
In the interest of every organisation and HR team that is planning to implement their HR Tech transformation during lockdown or even later in remote mode, we have collated best practices from 3 such implementations we led during COVID-19 for Max Bupa, Quantela, & Vijaya Diagnostics, along with comprehensive checklists and ready-to-use templates for a successful HR digital transformation.