Whether HR in your organization has undergone a digital transformation or not, the world is going ahead and changing the way this traditionally administrative process has functioned. At the center of this transformation is data, lots and lots of data. How has HR evolved from a paper-based process to an entirely digital process? Here’s a look at the journey of the digital transformation of human resources.
From on-premise systems to the cloud, from paper to digital, the digital transformation journey of HR has not been smooth. Not only has it demanded the transition to new systems, it has demanded the transition to a new mindset and a change in the perception of what HR is capable of. It has modified the role of HR from a traditional process-oriented role to a role requiring a combination of skills of human resources professionals, IT professionals, data analysis professionals, and strategic business partners.
Here’s how HR has evolved over the years, and how it has become possible for it to transition to a more mature role.
1. The Fourth Industrial Revolution Arrives
The fourth industrial revolution was defined by Professor Klaus Schwab as the fusing of the physical, biological, and digital worlds, changing the way we live, work, and relate to one another. The development of new technologies has an impact on all disciplines, including HR.
What the fourth industrial revolution requires is a large amount of upskilling. In an age defined by AI and data, there are not enough skilled personnel available to make sense of it. Even HR professionals must think and act like data scientists, and this forms the essence of HR’s digital transformation. While HR is expected to take responsibility for their own reskilling and upskilling, they are also expected to take charge of the learning needs of their organization’s employees.
“The good news is that employees are willing to reskill; they say that they’d happily spend two days per month on training to upgrade their digital skills if offered by their employer,” notes Carrie Duarte, PwC’s Workforce of the Future Leader. Employees are ready and are aware of their need to reskill for the future. Are organizations and HR enabling this?
2. HR Moves to the Cloud
The cloud arrives, and HR’s transition from manual processes moves to a single center of information. Cloud computing in HR simplifies recruitment, enables innovation, helps boost employee well-being by bridging the communication gap, and allows a more global approach to human resources. This gives HR a more strategic role in the organization and earns it a seat at the table with the C-suite, making it a business partner for the organization and giving it the authority to contribute to key business decisions.
In an article titled Cloud Computing in HR, community contributor Riya Sand says, “With cloud computing, human resource managers are presented with a unique opportunity to create a level playing field regardless of office location. From remuneration to training and performance metrics, Cloud computing ensures every aspect of employee management is centralized.”
3. Data Begins to Drive All Decisions
As the cloud centralizes all information and data, HR begins to glean insights from this data. By processing data using analytics, machine learning, and artificial intelligence, HR now uses these insights to recruit the ideal candidate, predict which employee has the potential to be a key leader in the organization, and which employee is at risk to leave the organization.
“In the future workplace, products that can organize data in meaningful ways will be the norm and companies will need skilled data analysts and strategists who can help managers interpret data for better decision making,” says Laura Butler, SVP People and Culture at Workfront.
This creates a new role in the HR department, the HR data scientist. Though all HR professionals must now think like data scientists, a special role is critical to be able to analyze, interpret, and enable decision-making through data analytics. Data is the mainstay of HR in its digital transformation journey and will define what the future workplace will look like.
4. The Traditional Resume Loses its Value
“Most current resume metrics are losing value quickly in the new skills-based economy,” says Brianna Foulds, Sr. Director of Talent Acquisition at Cornerstone OnDemand. “The resume of the future will consider historical performance, personality, and peer reviews more heavily than whether you went to an Ivy League school, and organizations will be able to identify potential for success.”
As data defines our abilities more than our degrees do, we see the traditional resume losing its value. HR practitioners and recruiters understand the irrelevance of the degree and now use data to identify the skills candidates can bring to the table and whether they have the right attitude towards their jobs. This leads to hiring more quality talent for the organization.
5. Emotional Intelligence Still Trumps Artificial Intelligence
HR’s digital transformation journey is nowhere near over. But if there’s one thing that leading thinkers and analysts have reassured us about, it is that machines are nowhere close to taking HR’s jobs. While AI can predict and even prescribe action points for HR, it is our human judgment that will always inform our decisions. In fact, our decision-making abilities are strengthened by the amount of data and the tools we have to process that data.
“In moving from automation (in the industrial age) which was productivity oriented, to digitalization (in the tech age) which is revenue oriented, HR professionals need to apply themselves to get more out of people’s minds - not out of their legs and hands but their minds. HR is the new owner of productivity,” believes Johnny C. Taylor, Jr., CEO at SHRM.
This means that for HR, the challenge remains to use these technologies efficiently to a) manage a new workforce that will increasingly comprise contingent workers, and b) leverage their emotional intelligence to truly connect with employees and offer a well-rounded employee experience where they feel heard and valued as part of the organization.
Where Is HR Expected to Go From Here?
The future of HR is bright, and it is continuously evolving. What HR professionals need to do is continuously learn and unlearn to keep up with rapidly changing technologies. HR departments of the future will be completely digital and made up of people who are familiar with data analytics and have the emotional intelligence to use the insights offered by these analytics to enhance employee experience. They will also demonstrate the scientific thinking capabilities needed for data-driven decision-making.