Digital HR is the digital transformation of HR services and processes through the use of social, mobile, analytics and cloud (SMAC) technologies. Digital HR represents a sea change in both the approach and execution, although it takes place on a continuum as organizations progress. It is meant to improve both employee experience and organizational success by transforming the HR function from paper-based, reactive and time-consuming to digital-first, mobile and optimized. Its goals include improving employee engagement and retention and measurably augmenting the success of an organization by continually transforming in an agile way.
Most organizations are only beginning to consider digital HR and work on a strategy, though leading companies are embracing this new way of conducting HR functions, processes and services. As with the digital transformation of business in general, digital HR is considered by industry analysts to be a critical part of the digital transformation of business in general.
The digital disruption of HR
Digital HR is part of the greater landscape of digital disruption. The improvements to digitally based and mobile technologies and pressure from the success of early adopters, including cloud-first startups that are disrupting old business models, have exerted pressure on more traditional businesses to move at least some legacy on-premises software to cloud systems to support modern business processes and a better customer experience. Enterprise software vendors have worked hard to support and even compel these shifts with more and more cloud offerings, not just in ERP generally, but specifically in cloud-based human capital management (HCM) and talent management software.
Examples of this include Workday's founding in 2005 and in moves such as SAP's acquisition of SuccessFactors in 2011. Other factors driving disruption are the growing proliferation of AI and lightweight collaboration, analytics, and other tools, along with the exponential rise of "insta" culture (e.g., learning new talents from YouTube, instant feedback from social media, and the spread of delivery services) and the billions of internet and mobile users. Employees across the generations bring their consumer experience to the workplace and expect its systems, including its HR systems, to deliver the same quality of experience. Those expectations will only increase as Generation Z, considered to be the first true digital natives, increasingly enter the workforce.
How digital HR works
Digital HR, which may also be referred to as the digitization of HR, takes a cloud-first, mobile-first, data-driven, collaborative, iterative approach to HR services and processes with the idea of delivering on business strategy and employee experience. It uses cloud HCM and talent management systems that feature easier deployment, automatic upgrades, fewer technical challenges, and, by many accounts, better automation, demonstrable HR improvements, costs savings and increased ability to integrate modern technologies.
Digital HR uses data and analytics to measure progress at every stage of the employee life cycle, from recruitment to learning and development to retention and offboarding, with the intention of pivoting quickly when a given strategy does not work. It uses lightweight technology to support a focus on agile change, with tools such as pulse surveys and eNPS. Digital HR capitalizes on social media, such as social media recruiting and by incorporating, where appropriate, social media in learning strategies. And it embraces the consumerization of HR, reimagining HR self-service as a truly user-friendly experience for employees.
Digital HR is not just about transforming HR technologically. Because one of the most important goals of digital HR is to take a strategic approach to HR, it reflects a proactive approach to aligning all the functions and goals of HR with business goals and partnering with other stakeholders to determine how best to do so.
Benefits of digital HR
Digital HR can confer a number of advantages to organizations. Here are just a few:
- Digital HR can improve HR processes by using analytics to determine what is and is not aligned with HR strategy.
- Duplicative systems can be streamlined, for example, HR and learning systems, into one portal.
- Using a mobile-first strategy can help deliver a better employee experience to job candidates and workers by making HR self-service and other processes easier to use, and in turn improve engagement and retention.
- Taking an agile approach to HR strategy, processes and tools, where projects are rolled out quickly and iterated, can lower the risk of widespread failures of strategies and technologies that can't be easily changed.
- By using design thinking across SMAC technology implementations, HR can ensure that employees actually adopt tools. Where these are not working, design thinking can help HR leaders and professionals quickly change course.
- Cloud HCM and talent management systems can streamline processes across the employee life cycle, lower costs and enable integration of modern tools and technologies, such as AI.