How do you build a digital HR strategy?
Companies are struggling to build a digital strategy and roadmap for their HR function. But is it a good idea to implement one at all? The answer is: yes, absolutely. We are in the midst of the 4th industrial revolution, the world of work is changing faster than ever before, it is a revolution that was anticipated by science fiction authors before economists and business leaders even became aware of it. A digital HR strategy provides the opportunity for HR to shape the future of work for their business and have a clear view on how jobs will be lost and gained. A roadmap sets course and speed for the HR function and for people priorities within the company. Companies with a distinct HR Digital roadmap endow themselves with a foundation to not only cope with these changes but to influence them to gain competitive advantage.
The conventional way: Digital HR = HR Technology Roadmap
Of course, a digital world does not only require change from people and businesses. It also comes with new technology enhancing the activities and effects of an HR function. Technology being put into the hands of end-users, new digital listening techniques, interpreting vast amounts of social media information to better understand and even predict the wants, needs, and capabilities of people. This opportunity is mirrored by an evolving HR technology market. Gartner sees cloud-based HRIS on the ‘slope of enlightenment’, with Workday, SAP, and Oracle as market leaders, and mainstream adoption happening as we speak. The market is growing by 12% per year. From our research we know that the average Fortune 500 company spends $10M USD per annum on new, cloud-based HRIS. Obviously the standard approach to the digital age in HR is a heavy investment in technology that helps to ‘do what HR does, but in a digital way’. This approach often leaves HR teams very busy – and often unnerved by the major efforts, often two years of labour, it takes to implement the new technology.
The better way: Digital HR = Business Value in the New World of Work
Is there a better, more promising alternative to just trotting down the same alley as before, ‘doing what HR does, but in a digital way’? Yes, but HR has to identify the right levers that it can pull to generate business value in a digital world. TI People’s research studied this question and found that HR should set three new priorities:
Actively manage the customer’s experience of the function
Develop the organisation from job-based to skill-based and
Provide workforce analytics insights
HR teams should focus on these three levers and not allow ‘the new HRIT system’ to dominate their agenda. HR teams should not only change the WHAT of the digital agenda but also build new HR capabilities to operate in this new environment – and in that way shape the HOW.
If you’re interested in learning more about how to build a digital HR strategy and what to include in your roadmap, then you might be interested in our online training course on digital HR, where we walk through the critical areas to include in your digital HR strategy in more detail. You can also read more about the WHAT and the HOW of building a digital HR roadmap in this blog post.
ABOUT THE AUTHOR
Volker Jacobs is the CEO and founder of TI People and an Executive Director and co-founder of Insight222 Limited. Volker holds degrees in economics and information sciences, has worked for U.S. and European consulting companies and started his own HR management consulting business that he sold to CEB. At CEB, Volker held a senior management position with a global responsibility for HR consulting and HR technology before co-founding TI People.