The role of HR in digital transformation



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9 mins

Changing how your business works, and the culture within it, will need the support of your HR team to ensure the success of its digital transformation. Here’s how HR management software will support this implementation, as well as benefit employees and improve process efficiency

Think about how you carried out certain tasks at the start of your career, and compare to how you complete those same duties now. How different are they, and what do you do currently that you couldn’t imagine just a few years ago?

No matter whether you’ve been in HR for three years or three decades: things have changed. More sophisticated HR systems are being used, different interfaces make your job easier – and those manual tasks you did early in your career may also be a thing of the past.

If not, then your organisation could be in need of digital transformation: not only as a way of keeping up with the competition in our increasingly digital age, but also to improve workforce efficiency. So how does HR fit into this puzzle?

Digital transformation will affect an employee’s role, as well as the culture of the company. And it’s the role of an HR team to support the implementation of new technology to guarantee the success of this substantial investment. Here’s what digital transformation means to you and your organisation, its benefits, and how people teams can support change.

In this article

  • What is digital transformation?
  • Digital transformation in an HR context
  • Applications and uses of digital transformation

What is digital transformation?

Digital transformation – or DX – is the use of digital technology and strategy to change the customer experience, culture, or business and operating processes of an organisation. This can be using the cloud, having a remote-first workspace, or updating processes to meet customers’ requirements. It can also include reskilling employees, and using digital tools such as artificial intelligence (AI) so colleagues can focus on other tasks.

For enterprises, digital transformation is about analysing customer demands and using technology so the end user’s experience is better. In HR teams’ case, their ‘customers’ will be employees and other workers.

But don’t confuse digital transformation with digitisation. While digital transformation is about change at an organisational level, digitisation is about smaller initiatives. In an HR context, digitalisation might mean moving from paper-based expense forms to an online expense system, while digital transformation would be a much bigger-scale project, such as payroll and HR system implementation.

Digitalisation is something different again, and is more about processes. One example is ordering a pizza: this has changed over the past few decades, from needing to make a phone call to now having a number of digital components involved. About two-thirds of Domino’s orders in 2019 were digital, and the brand now considers itself as ‘an e-commerce company that sells pizza’.

Digital transformation is essential for organisations in 2022: every organisation now is a digital brand because of trends that were accelerated by the Covid-19 pandemic, such as remote and hybrid working. It can be difficult to incorporate your data to make business-critical decisions but, unless you can use that information to generate business intelligence, then you’ll always be in the early stages of digital transformation and will be outperformed by the competition. So you need the correct tools and platforms to generate this business intelligence – then act on it – as soon as possible.

Digital transformation in an HR context

Digital transformation in an HR context involves changing operational HR processes to become more streamlined, automated, and driven by data. Transforming your HR operations in this way will help people teams (and line managers) make better decisions , take action more quickly, and respond to new challenges more quickly. HR also have a wider role to play; that of supporting digital transformation initiatives led by other teams – helping them to communication the reasons for and benefits of change, and making sure everyone has the right skills to take full advantage of the new technology that’s being introduced.  People teams also have a crucial role to play in creating an organisational culture that supports and embraces growth.

Benefits of digital transformation for HR teams

Successfully transforming HR processes through technology can reap a number of benefits for people teams, including:

  • Standardised, automated processes, through a united HR tech stack, will improve efficiencies and give our HR team more time to spend on activities that enhance the employee experience
  • Modern HR software can help to better connect your people to your organisation’s mission, culture, and values – which in turn can give them a greater sense of purpose, boosting productivity and performance
  • Tools that help you analyse performance, the effectiveness of L&D interventions, and skills gaps, will help you create career paths that set up your people (and organisation) for future success
  • Unifying your people data in a single platform gives you complete visibility of information – as well as better accuracy of data – enabling you to make informed decisions and eliminating inconsistencies. The analytical capabilities of this technology will support your team in making the correct decisions, so the people in your company can increase their productivity, effectiveness and efficiency
  • You’ll also find using digital transformation within your company will lead to an improvement in employee satisfaction. Showing how you value your colleagues by optimising your processes means they’ll have a sense of achievement. They’ll be happier in their roles, and will be more productive than those who aren’t. It reflects well on you as an employer, too, as colleagues will offer positive reviews on your company – which will then attract top candidates

This investment in the digital transformation of your HR setup will contribute to reducing costs in the long term. Not only can you save time (and resources) as you streamline processes, but better workforce visibility means more internal appointments and therefore lower external recruitment costs.

Applications and uses of digital transformation

There are myriad ways HR departments can support digital transformation within an organisation to ensure its success: for the team, employees, and the company itself. Here are three examples of how to increase the chance of a positive outcome during the process.

Employee experience

Implementing technology in the correct way can improve both an employee’s job quality and their performance. One way to do this is to incentivise colleagues to use technology to automate tasks to benefit both themselves and your brand.

Those who’ve automated a significant amount of their work could be rewarded with four-day weeks, for instance, or receive bonuses or attend training sessions that may be at a higher cost. These employees could become automation coaches within your organisation, or offer automation consultancy outside the business.

You can also work with managers and employees to check how process automation can redesign and safeguard certain roles. If there are particular tasks that can be automated, this is an opportunity to increase time and focus on higher-value tasks. Technology, such as talent management software, can support HR teams to conduct this assessment efficiently to find out more about current skills.

Here’s one example. Sumitomo Mitsui Banking Corporation (SMBC)   – yet headcount didn’t reduce. These employees were retrained and transferred to a new subsidiary, SMBC Value Creation, which offers process automation expertise to other financial brands.

There are also circumstances where alternative roles aren’t an option. Unilever found that and families so, with local government and non-government agencies, it set up reskilling initiatives with a funding programme for entrepreneurship. More than 2,000 of these employees are in other employment, and it’s reported the initiatives have had a positive effect on the community.

Conduct a skills gap analysis

Part of your organisation’s digital transformation is to adopt new tools and processes as technology evolves, and how your organisation adapts to these changes to grow. So, when you implement this new technology, you need to devise an onboarding programme and training plan for colleagues so it will be a success – and your brand achieves its return on investment (ROI). Routine skills gap analysis activities will highlight any failings in these training programmes, so those employees who are affected can get more training.

Consider a healthcare provider undergoing digital transformation. It can involve moving patient records, schedules, appointments and billing information to online electronic health record systems and apps. This will be a more streamlined process for the provider and patient, but there may be a digital skills gap with employees. So a skills gap analysis here will show what support each person needs for this new technology.

A culture of change

One reason digital transformation could fail is if you haven’t considered how it will affect not only your employees, but also your organisational culture. The aim here is to optimise how your colleagues work, so they’ve more time for high-value tasks. Without this consideration, your initiative won’t be a success.

So you need to make sure your employees are well prepared for this change, because it’ll be a cultural shift as well as a technological one. You need leaders who understand the culture, can set expectations on how jobs will be affected, and support the implementation of new ideas and a different way of doing things.

Change management is about continuous improvements and cultural shifts. So you and your employees should be accustomed to change – and the way to make this more familiar is through your culture.

HR, with its bigger role, can guide this cultural shift so your organisation’s digital transformation can be a success. You can help staff understand why change is happening because, if your employees don’t buy into either the new technology or processes, they won’t want to take part.

Digital transformation is intended to use digital technology and strategy for initiating change that ultimately affects employee experiences, processes, or organisational culture, so the information you generate from this can lead to better business decisions. Your HR department will need to be a crucial part of this process, ensuring they receive the right support to take advantage of this technology.

If your HR team is in need of digital transformation, book a demonstration of Ciphr’s integrated people management solutions or download our brochure to find out how we can help.