What is digitalisation in HR?
Digitalization in HR means transforming traditional HR processes using the latest technology. Digital HR uses the cloud and software as a service (SaaS) to automate HR processes and workflows. Cloud is revolutionising HR, streamlining HR processes and allowing HR and People teams to focus on people (Sage Advice United Kingdom, 2020).
What is HR Digitalisation?
Human Resource (HR) digitalisation is the most significant change affecting organisations and has since gained exponential adoption over the years; HR must execute new methods and procedures to keep up with the rapid modernisation of the workforce. The benefits of the systematic process are creating newer operational HR processes to help improve communication, collaboration, and access to data analytics (HealthMetrics, 2022).
Studies
Studies show that digitalisation practices such as "Monjin" video interviewing improve hiring accuracy by as much as 86% due to the usage of automation in determining the candidate's specialisation, technical skills, and years of experience. This results in streamlining process which leads towards better efficiency and productivity which saves time and cost for your business.
Moreover, research from Oxford University, found that 90% of HR administrative roles are likely to be automated by 2035. Already in Malaysia, talent in the country says that they are affected by AI, with 61% of participants from a Hays survey confirming they have experienced an impact of automation, either partially or significantly (HealthMetrics, 2022).
Benefits of Digital HR
1. Automation frees up time for the HR professional.
Perhaps one of the most obvious benefits realized by embracing digital HR is the fact that automating easily repeatable, low-value tasks frees up time that an HR professional can use to perform other, high-value tasks.
Administrative duties like data entry, pre-screening of applicants, and even the processing of payroll in some organizations, can require hours of attention each week, which could be put to better use on tasks that require more critical thinking, reasoning, and evaluation.
“Automating administrative tasks within HR brings us forward into thinking more strategically and holistically,” Penque says.
2. Technology allows HR processes to become more efficient.
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Beyond simply freeing up time for other processes, making the switch from manual to automated or tech-supported HR processes also allows for increased efficiency in many areas.
Digitizing the recruitment process, for example, can reduce friction and improve how HR professionals service job applicants. This can, in turn, prevent high-quality applicants from growing frustrated and abandoning the application process. More high-quality applicants mean that an HR professional has a greater chance of hiring the applicant who best fits the needs of the role and the company culture.
Similarly, algorithms and artificial intelligence have made it easier than ever to screen out applicants that do not meet the minimum requirements for a particular job, allowing the HR professional to instead focus on the applicants who most deserve their attention.
Similar increases in efficiency can be realized across many of HR’s functions(O’Connor, 2021).
3. Embracing technology allows HR to become more data-driven in many of its processes.
At both the organizational and individual levels, businesses generate troves of data each and every day. By learning how to capture and analyze this data, it is possible for businesses to leverage data in their decision-making processes, tying decisions back to a logical rationale instead of an observation or gut reaction. This, in turn, allows for more disciplined processes.
HR analytics—also known as people analytics, talent analytics, and workforce analytics—refers to the ways in which human resources teams can leverage data in their processes to better meet the department’s strategic goals, whether they’re related to recruitment and hiring, retention, motivation, or development.
Benchmarking key performance indicators such as average cost per hire and time to hire can, for example, enable HR professionals to set goals for improvement and better understand what, if any, impact is derived from changes to processes or workflows.
“HR analytics allows both the HR department and the business at large, to understand insights and create improvements for our people,” Penque says. “It allows us to improve the effectiveness of our people-related decisions” (O’Connor, 2021).
4. Digital advances allow the company to adapt to a changing workforce.
Thanks to advancements in technology, geography, and proximity are no longer as great of an issue when it comes to securing top talent as it was in the past. It is now easier than ever for companies to connect with prospective employees and facilitate remote work as necessary. Some examples of this trend include:
It is important to note that these are just a few examples. A plethora of other technologies has all played a part in bridging the gap between employers and applicants, enabling a truly global workforce(O’Connor, 2021).
Challenges in digital HRM
• Ineffective and unsystematic data
• Platform processes high costs
• Conundrum about digitalisation will make their job redundant
• System Inefficiency in consolidating tasks (HealthMetrics, 2022).
Conclusion
The world is moving towards digitalisation. Every day there is an innovative product or solution coming out. We have to adapt to new changes to survive and face competition. Meantime encourage the employees to learn digital work culture. And adapt to digitalization gradually which will help reduce the cost of transforming to changes.
Reference
HealthMetrics (2022) 10 HR Digitalisation Practices That Your Organisation Can Implement. Available at: https://healthmetrics.com/m/10-hr-digitalisation-practices-that-you-can-implement-right-away/ (Accessed: March 20, 2023).
O'Connor, S.W. (2021) What is Digital Hr? how technology is changing the field, Northeastern University Graduate Programs. Available at: https://www.northeastern.edu/graduate/blog/what-is-digital-hr/ (Accessed: March 20, 2023).
Sage Advice United Kingdom. (2020). What is digitalisation in HR? [online] Available at: https://www.sage.com/en-gb/blog/glossary/what-is-digitalization-in-hr/#:~:text=Digitalisation%20in%20HR%20means%20transforming [Accessed 20 Mar. 2023].
A timely topic, Azeem. My question to you is, what are the potential consequences of biased HR technology in the recruitment and hiring process? This is keeping in mind that HR tech uses artificial intelligence, which is trained on data. Such AI-powered tech is only as unbiased as the data it is trained on. Keen to know your thoughts on this.
ReplyDeleteWhat is most likely to happen when you use an AI in the process of recruitment is that it only chooses the best of the best. As a result of that many might not fit into the criteria, so their résumés might get rejected even before giving them a chance to prove themselves and their capacities. so it leaves no place for a person who has potential to improve with the time.
ReplyDeleteBecause I personally believe that, with the correct training and experience, he or she will give you a very good performance.
It also leaves no space to an individuals improvement with time, as it only chooses the best candidate from the very beginning.
Good observation, Azeem. I am of the opinion that 'bias' is going to exist within HR Tech that uses Artificial Intelligence. The only way to improve on this shortcoming would be to have developer teams comprise of diverse individuals, who will invariably diversify the pool of learning data that a given HR technology platform would be trained on.
DeleteFrom my perspective, while technology can automate and streamline many HR processes, overreliance on technology can lead to dehumanization of the HR function. If HR professionals become too dependent on technology, they may lose sight of the importance of human interaction, empathy, and judgment in the HR decision-making process.
ReplyDeleteI agree with your perspective that technologies can make HR work easy and will do an effective task, Still HR managers do not recommend to completely depend on technology. HR should have human interruption whenever decision making.
DeleteYes, what you said is correct, HR has to have a human touch on HR functions and decision making. The HR functions cannot be automated, some areas can be digitized such as HRIS, Attendance system, performance appraisal system, record keeping so on and so forth.
DeleteThe use of digital technology in HRM has revolutionized the way organizations manage their workforce. However, there are also several challenges that come with the implementation of digital HRM. One of the most significant challenges is ensuring data privacy and security. As HR departments collect and store sensitive employee information, it is crucial to implement effective security measures to prevent data breaches and cyber attacks (Schramm-Klein & Morschheuser, 2021). Another challenge is ensuring that employees are comfortable with the use of digital technology and have the necessary skills to use it effectively (Lepak et al., 2021). This may require HR departments to provide training and support to employees on how to use new technologies and tools. Additionally, there may be resistance from some employees who prefer traditional methods of communication and may be hesitant to adopt new technology (Lepak et al., 2021). To overcome these challenges, HR departments need to carefully plan and execute their digital HRM strategies, taking into account the needs and preferences of their workforce, and ensuring that data privacy and security are a top priority.
ReplyDeleteWe need to face challages, when we step into new technology and digitalisation for instant sharing confidential information will have security issues. We need to implement proper security systems. There is potential security issue when we in digital world. However at the same time there are network security companies there. Company's job to acquire right security system. This way all companies can adapt to digital world.
DeleteI agree with you Azeem. Organisations should be well aware of the potential threats that they might have to face in this regard and should have proper implementations for them. Consulting security experts is essential now a days as we are in digitalising era.
DeleteWell structured. AI in HR process would reduce significant amount of time and effort for all the administrative tasks such as resume screening and shortlisting. It may also reduce gender and ethnicity bias in recruitment. However, if the AI replaces the role of HR department it would reduce employee morale. It also does not allow human interaction and judgement in the decision-making process.
ReplyDeleteHere we discussing the digitalisation in Human resource management. Adapting to computer, technology, new devices, cloud, applications, softwares. These digitalisation will improve the quality of human resource managers roll, It will reduce the time consumptions in human resource tasks, And help human resource managers to do the task easily in the palm of hand. Moreover which will be more accurate when we provide correct data in it.
DeleteTimely topic. As per my view, these digital transformation benefits need to be more weighed for data security. I mean someone can take others' personal details and take advantage of them. It's good when it is digitalized because it will save everyone valuable time.
ReplyDeleteDigitalisation is gradually growing day by day. Which has benefits as well drawbacks. When any individual or company moving to digital world; which should be adapt to the changes. Which need to take security measures in advance. There are data leakage, information theft such things always coming along with the. technology. It's in users hand to protect there information by hanging proper security services for instant virus guard and VPN network.
DeleteThe topic reflects effectiveness situationally. Digitization has many advantages, including easier access and retrieval, lower cost, faster communications, and increased security. It is utilized in all human resource processes to increase efficiency and streamline operations. Recruitment and selection are two of the most important areas of human resource processes.
ReplyDeleteDigitization has a proven impact on reducing unemployment, improving quality of life, and boosting citizens' access to public services. Finally, digitization allows governments to operate with greater transparency and efficiency.
Timely topic.
ReplyDeleteSmall- and medium-sized enterprises (SMEs) play a crucial role in the global economy as they generate a significant portion of the world's jobs and GDP. Specifically, these businesses create nearly 70% of the employment opportunities and Gross Domestic Product (GDP) worldwide (World Economic Forum, 2022).
Similarly, "SME's make up a large part of Sri Lanka's economy as well, with over one million SMEs accounting for approximately 75 percent of all businesses. These are found in all sectors of the economy and are estimated to contribute about 45 percent of total employment in Sri Lanka" (Source: https://www.ifc.org/wps/wcm/connect/region__ext_content/ifc_external_corporate_site/south+asia/resources/gendered+impacts+of+covid19+on+small+and+medium+sized+enterprises+in+sri+lanka#:~:text=Small%20and%20medium%2Dsized%20enterprises%20(SMEs)%20make%20up%20a,total%20employment%20in%20Sri%20Lanka.)
In Sri Lanka, the initiation for digital transformation of HR functions of SMEs tends to progress at a very slow pace. This can be a bottleneck to the country's economic growth as well.
What is your view on the same?
Small and medium businesses are operating in a low investment as only an individual otherwise few investors running the business. They will not have enough resource to even have departments. In this we can not expect digitalization in human resource management. We can expect to have digitalization in private and public limited companies; where the capital investment will high and ready to adapt new technologies.
DeleteNice and timely article Azeem. Overcoming challenges in digital Human Resource Management (HRM) requires strategic planning, proactive measures, and continuous improvement. Several best practices can be implemented to address these challenges effectively.
ReplyDeleteChange management is crucial in the digital HRM journey. Organizations need to ensure that employees are trained and equipped with the necessary skills to adapt to digital HRM processes (SHRM, 2019). Regular training programs, workshops, and communication channels can help employees understand the benefits and purpose of digital HRM, reduce resistance to change, and foster a culture of continuous learning and improvement.
Selecting the right HRM technology is critical for success. Thorough research, evaluation of different options, and investment in user-friendly and scalable HRM systems can streamline workflows, reduce manual errors, and enhance data accuracy (Deloitte, 2019). Integrating HRM technology with existing systems and processes is also essential for seamless operations.
Data privacy and security are paramount in digital HRM. Organizations must implement robust data privacy and security measures, such as encryption, access controls, and regular data audits, to safeguard sensitive HR information (European Commission, 2018). Compliance with relevant data protection regulations, such as the General Data Protection Regulation (GDPR), should be a top priority.
Employee engagement should not be compromised in digital HRM. Regular communication with employees through various channels, such as virtual meetings, forums, and feedback mechanisms, can help keep them engaged, informed, and involved in HR processes (Bersin et al., 2019). Ensuring that employees have access to the necessary support and assistance for HR-related matters is also crucial.
Continuous improvement is key to success in digital HRM. Organizations should continuously assess the effectiveness of digital HRM processes and make necessary adjustments based on feedback and performance data. Regular monitoring, evaluation, and feedback mechanisms can help identify areas for improvement and drive continuous enhancement of HRM practices.
By implementing these best practices in change management, technology integration, data privacy and security, employee engagement, and continuous improvement, organizations can successfully overcome challenges in digital HRM and unlock the full potential of digital technologies to enhance HR operations and drive organizational success.