Why Digital is changing HR?

For years, the human resources function has shouldered much of the responsibility for managing people, in a largely segregated operation. Technology advances will change all this, by integrating talent management into the fabric of everyday business. HR IT will thus become a vital component of organizational performance in an increasingly competitive and fast-changing world. As HR heads toward a future characterized by Big Data, integration, mobility, social media, gamification, and cloud computing, the ability for organizations to manage their people will grow more flexible, agile and customized.

Digital technology is continuing to evolve at breakneck speed, and it permeates nearly every aspect of our working lives. In the coming years, digital will empower people to take significantly more responsibility for talent management and HR activities. As digital enables talent management to become less of a centralized HR activity and more of an activity that is embedded in the fabric of everyday business, it will fundamentally change HR as we know it.

Digital advances promise to reshape work as we know it

Digital is fundamentally changing the way businesses and governments operate—from how they interact with customers, citizens and suppliers, to how they manage their employees. New digital technologies enable not only greater integration and flexibility than ever before, but also the ability for employees to have a greater share of voice and ability to participate in defining and even creating their own work experiences. Digital is thus poised to radically disrupt HR as usual and redefine the future of the human resources function in the next decade. Eventually, HR and talent processes and the technology that enables them will no longer constitute their own domain or even be primarily performed by a central HR function. Rather, many aspects of HR and talent management will become fully embedded in how work gets done throughout an organization, thereby becoming an everyday part of doing business. HR departments that ignore this transformation could face obsolescence.

In this point of view, we explore five recent digital developments that we believe will conspire to transform HR:

1. Data and integration will be king
2. Digital will give power to the people
3. Consumer applications will find a home in the enterprise
4. Digital will enable customized talent management
5. Cloud computing will enable new flexibility and agility

Let’s going into detail one by one to understand what we are talking about.

1. Data and Integration will be king

Analytics has been heralded as the new step change for HR. The use of data to produce business-relevant insights that lead to action. Yet few HR organizations have a robust analytic capability. Collecting data on employees (such as engagement rates) can be expensive and time consuming; new technologies promise to make this easier by enabling HR professionals to offer different employees a ten minute or less online “pulse” survey every day to provide a real-time view of engagement that is not possible with traditional, annual surveys.

2. Digital will give power to the people

As digital technology advances, it’s helping companies embed talent management into the fabric of everyday business and into employees’ work and personal lives. Technology advances are enabling HR to put the “human” back into human resources, and helping give people management back to the people.

I’m not talking about the traditional notion of self-service here, or the ability for employees to perform mundane administrative HR activities themselves, like updating their address or viewing a paycheck without HR’s intervention. Instead, we’re talking about involving employees and managers in high-impact talent processes—including recruiting, hiring, succession planning, learning and shaping career paths. All this will happen thanks to an emerging class of social and market-based tools that will let employees manage almost every aspect of their professional lives digitally.

3. Consumer Applications will find a home in the enterprise.

Closely linked to the advent of cloud computing is the rise of businesses like LinkedIn, where talent management systems live on the web and are shared by companies. Today, for example, employees and job candidates can input the equivalent of their resumes and skills on such sites. By doing so, they may circumvent the need for internal talent profile databases that aggregate individuals’ skills, job history, education, competencies and more. Other sites, like TalentBin, even let organizations build talent profiles by mining the “social exhaust” from sites like Facebook, Twitter and Quora to build searchable talent profiles about people’s professional interests, skills, passions, and accomplishments. With the advent of companies like these that support more user-friendly processes, such as searching for people with particular skill sets in particular geographies and interviewing them through video, processes like staffing can be shifted to line managers instead of being performed by HR. Market-based mechanisms could motivate people to use external systems for internal purposes. For example, if employees don’t input their skills into a site like LinkedIn, they risk missing out on opportunities (such as projects and new job assignments) that might have benefited from their skills.

4. Data will Enable Customized Talent Management.

Technology transformed marketing by enabling customization of products, services and marketing messages. (See: Trends Reshaping the Future of HR: Managing Your People as a Workforce of One). Likewise, it can transform HR by empowering it to offer highly customized talent practices that optimize each employee’s performance. Most organizations have already achieved maximum cost savings by using information technology to standardize and harmonize their people practices across their global operations. But HR professionals can now leverage that standardized framework to tailor employment practices to every worker.

5. Cloud computing will enable new flexibility and agility.

Increasingly, organizations are accessing shared resources, software and information over the Internet on a pay-as-you-go basis. Whereas the traditional big, siloed, industrial HR application that spanned multiple areas of functionality was created precisely because connecting disparate systems from different vendors was quite difficult (and usually involved expensive systems integration experts on the back-end), today big ERP vendors
like Oracle and SAP are offering these systems over the Internet in the form of software-as-a-Service (SaaS). Likewise, new cloud-based platforms like those from Workday and Salesforce.com are being built from the ground up with web-services-based connectors, open architecture, and an orientation toward data analytics and integration. This may make it increasingly easy and inexpensive for newer cloud-based solutions to connect with one another.What is the impact on the Business

As we have discussed in the context of each of the five IT developments, digital advances will have significant implications on employees, managers, and leaders alike. The most important implications include:

• Talent management will become an everyday activity for each employee and manager.
• The focus of information and decision making will shift to employees—and away from a central group like HR or a small group of top leaders.
• Digital will knock down silos and blur boundaries—between HR and business lines, between consumer applications and enterprise applications, between layers in the organizational hierarchy, between business processes and HR processes, and between work and personal life.
• Talent management processes will better serve the business—because they’re customized to an organization’s changing needs and to the employees that work to make the business a success, and are able to more flexibly adapt to changing business conditions.
• Talent practices will become more integral to the business’s strategic capability because they are data-driven, and because talent data is better integrated with an organization’s business data.

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