5 big challenges HR faces with digital transformation

The benefits of digital transformation are widely acknowledged. 

It helps ensure business continuity, improves customer and client satisfaction, and reduces human error. Organizations gain data-based insights to inform decision-making, enjoy significant cost savings and revenue growth, and secure competitive advantage. Employees are better engaged, more motivated to deliver their best work, and less stressed out. Job candidates, meanwhile, are afforded a seamless and enjoyable recruitment experience, which not only aids hiring organizations in the acquisition of top talent, but also drives brand reputation. 

Taking all of that into account, it’s no surprise that organizations are expected to invest $3.3 trillion in digital transformation projects by 2025. But it’s worth remembering that each of these benefits go hand-in-hand with a successful digital transformation - an accomplishment that is much easier said than done. 

In 2016, for example, Forbes assessed the risk of failure in digital transformation to be 84%. More recently, a study by Boston Consulting Group found that 70% of digital transformation projects fall short of their goals. Wherever you look, the statistics aren’t good - and that’s largely because organizations are prioritizing the implementation of technologies and tools over the needs of the workers who will be using them. 

People challenges, such as outdated HR processes, employee pushback, and poor workforce planning strategies, are often the biggest barriers to digital transformation. In this article, we outline how HR departments can overcome these obstacles, and pave the way for successful digital transformation. 

1. Strategic workforce planning

Strategic workforce planning is a critical business process that aligns an organization’s evolving needs and goals with its people strategy. HR departments will adopt various methods, programs, and tools to meet and predict current and future hiring needs. As a result, organizations can benefit from reduced labor costs, an increased ability to meet the demands of customers and clients, lower turnover rates, and heightened employee productivity and motivation.

In the context of digital transformation, strategic workforce planning is especially relevant. Ongoing digital transformation efforts mean business priorities are shifting constantly, and at a rapid pace. To accommodate these changes, organizations must ensure that the right people are in the right place at the right time - a responsibility that falls largely to HR departments. 

To establish an effective workplace plan, HR leaders must have a clear understanding of their organizations’ ongoing and future objectives. That means partnering closely with business leaders, not only so they can understand their needs, but so they can make a compelling case for strategic workforce planning. What are the benefits? How will it support the company’s digital transformation efforts? What tools and technologies are recommended? What resources will be required? And so on.

2. HR processes 

For three very good reasons, HR departments ought to be at the forefront of their organizations’ digital transformation efforts.

1. Digital transformation requires an agile and flexible people strategy. Not only do organizations want the means to attract, recruit, and onboard people efficiently, but they also want to upskill the existing workforce as and when it is necessary. The latest and greatest developments in HR technology can support both of these requirements. 

2. A lack of employee buy-in is one of the top barriers to successful digital transformation. As the most people-oriented department within the business, HR teams must lead by example, demonstrating the many and varied benefits of digital transformation to both candidate and employee. The new hire who enjoys a highly streamlined onboarding process, or the employee who benefits from online training will be more inclined to sing the praises of digital transformation. 

3. The rise of remote working, catalyzed by the outbreak of COVID-19, changed everything. McKinsey’s American Opportunity Survey revealed that 58% of employees now have the option to work from home for all or part of their working week. Further, the research found that, when offered, almost everyone will take the opportunity to work flexibly. To attract and retain the best talent with the right skills from all over the world, an organization's technological infrastructure must support remote recruitment and work. 

So how is technology being used by HR departments today? 

Blockchain provides security and transparency, enabling HR and recruitment professionals to securely share information and quickly verify employee data. Skills assessments enable organizations to test prospective and current employees, informing hiring and succession planning decisions. Resume parsers quickly screen job applicants, which allows HR professionals to focus on more strategic and value-adding tasks. Digital learning, training, and development programs mean employees can acquire new skills no matter where they are in the world. Automated recruitment and onboarding processes mean organizations can secure top talent, before they are poached by a competitor. Chatbots make it easy for teams to engage consistently and meaningfully with candidates - scheduling meetings, answering questions, and sending follow-up communications. Finally, video conferencing apps, online office suites, team chat apps, and cloud storage are supporting the shift to remote working. 

3. Workplace culture

Digital transformations will fail without significant cultural change, since humans are naturally resistant to change. HR departments must prioritize making their organizations more “digitally friendly” to secure employee buy-in and the fast adoption of new tools and technologies.

Communication, training, and support is the winning trio to achieving this. 

Communication - HR departments must be able to explain the “why” of their organizations’ digital transformation in minute detail and keep employees informed and engaged every step of the way. There are lots of different ways to raise awareness and highlight the benefits of a digital transformation program, be it regular office hours, weekly newsletters, or town hall meetings. Remember, it’s far better to over-communicate than under-communicate.

• Training - Once employees are on board with the concept of digital transformation, HR departments must ensure they have the skills and the know-how to actually use the new tools at their disposal. There’s little point in investing in a cutting edge technology if the majority of workers are incapable of using it to its full potential. The most effective method of training will depend on the type of technology implementation. Sometimes a brief online tutorial will suffice. In other scenarios, HR departments may need to invest in a substantial upskilling program. 
• Support - An organization’s digital transformation work is never done, and so it’s important that HR departments establish a culture of continuous improvement and change. Employees will be much more receptive to this when they feel they are getting the right amount of support. Further, workers should be encouraged to actively partake in their organization’s digital transformation journey by submitting feedback and suggestions. Digital transformation should unleash employee innovation and creativity, not stifle it.

4. Management

It can be particularly difficult for people managers to flourish during a digital transformation. Not only is there pressure on these individuals to lead by example and quickly adopt new technologies, but digital transformation usually necessitates a complete change in management style. For example, a top-down management approach, so often pursued by middle managers, is regularly undermined by digital transformation.

For those who have successfully pursued the same leadership techniques for many years, accepting and embracing a change like this can be enormously challenging, and often drives an increased resistance to change. 

As such, managers must be supported and empowered at every level of an organization’s hierarchy. They need to understand their roles and responsibilities within a new company structure and be provided with the necessary training and guidance to excel. As with employee buy-in at a more junior level, it’s important that managers are involved and engaged throughout the digital transformation journey, to ensure new technologies and processes will be welcomed by all. 

5. Values

The benefits of digital transformation might be many and varied, but in their haste to automate everything, some organizations forget to put their people first. 

If left unchecked by HR departments, the rise of automation in the workplace can contribute to a lack of personalization, resulting in neglected and unhappy candidates and employees. 

Let’s imagine Organization A decides to automate their end-to-end recruitment process. 

A highly-qualified candidate sees a targeted job advert via a social media platform and decides to fill-in the application form. Their submission is screened by a resume parser to identify key words and they are shortly invited to complete a skills assessment. 

The candidate’s performance at this stage of the recruitment process confirms that they are a great fit for the role, and so they are invited to attend a final-round online interview with one of Organization A’s senior managers. The candidate is required to schedule this meeting via a chatbot. Unfortunately, the only available time slots for the next three weeks are early in the morning, clashing with the candidate’s school run. There is no obvious way for the candidate to request an alternate interview time, or explain their unique circumstances. 

In the meantime, the candidate has been approached regarding a similar role at Organization B. While they enjoy an equally efficient recruitment process, it was much more straightforward for the candidate to schedule an interview at a time that worked well for them. This was largely thanks to the offer of a briefing call, which was conducted by one of Organization B’s hiring managers. 

Before long, the candidate secures and accepts the role at Organization B. Not only had they lost interest while waiting around for Organization A, but the clinical recruitment process lacked a personal touch and tarnished their perception of the brand.

While this might be a pretty basic example, it serves to illustrate the importance of pursuing a digital transformation journey that augments an organization’s existing processes and enhances the employee experience. 

A one-size-fits-all approach won’t work for digital transformation. Each candidate or employee has different goals and priorities, as well as different expectations of their employer. HR departments should ensure technology implementations support the unique, and forever evolving, needs of their workforce. 

Want to learn more about the importance of putting your people first whether it’s to advance your digital transformation efforts or uncover the unexpected and untapped skills in your organization? Get in touch with 365Talents today.