The HR industry is facing an unprecedented challenge to develop new capabilities to add business value and stay relevant. Transforming HR to enable business strategies is a complex process consisting of three major stages that require tremendous commitment and effort. This article provides a simple introduction to these stages
Increasing employee expectations.
Ever-changing business environment and a fierce battle for talent.
This is just a fraction of serious changes and trends that have been hitting HR in recent years. Unfortunately, the industry has been failing to adapt to many of these changes and improve continuously, which led to a widespread perception that HR is failing.
While HR is certainly not going anywhere, it needs to develop new capabilities to stay relevant. This is where the new wave of HR transformation comes into play. Its purpose is to make HR less costly, more efficient, and introduce more employee-centric workplace cultures.
In other words, it’s not supposed to a movement led by a group of HR leaders anymore, but a company-wide strategy.
In this article, we’re going to talk about what goes into the exciting next generation of HR transformation and how it shapes the future of HR.
HR Transformation in 2020: How is it Different This Time?
In the past, the strategies that could be considered transforming sought to make the existing HR industries more compliant, effective, and efficient. The overarching theme was that HR was as great as it could possibly be, and the problem was to make it faster and cheaper for organizations.
While the same goal being equally relevant today, the demands for HR professionals have increased. Today, HR has become much more strategic in nature; moreover, it now has to enable business growth and strategy by ensuring that companies have the ability to enter new markets more easily and maintain progressive staffing models that attract top talent.
Oh, top talent. The issue of talent shortage is considered by HR transformation strategies as one of the pressing ones. Indeed, the lack of qualified professionals now tops the list of emerging risks for companies in 2019, according to Gartner.
So, clearly, HR transformation will be even more impacting and complex, as it has to tackle these complex issues, add value, and stay relevant.
So does it intend to overcome challenges like these? Here are 3 essential stages of the latest HR transformation.
Stage I: Take Advantage of Technology
Addressing the legacy thinking that limits the use of technology in everything HR professionals do is one of the first steps to a successful transformation. Every HR practice stands to benefit from technology, and here are just some of the examples:
Communication within a company. By using specially designed communication tools and platforms, people can share information, run meetings regardless of their location, connect with customers, and do other things
Workforce. HR professionals can take advantage of technology to hire people remotely, plan workforce, hold meetings with people, start contracts, researching candidates on special platforms or databases, train employees, plan careers, and personalize benefits
Employee performance. Managing workforce performance by utilizing specialized automated tools for analysis, reporting, and motivation
Organizational communication. Company-wide communication systems can help HR professionals to share best practices, create policies, make decisions and do other things regardless of the size of the organization or location of employees.
Access to information and data provided by technology will be a game-changer for many HR professionals, as they will be more empowered and aware to make better decisions.
Stage II: Create an Employee-Centric Culture
To stay relevant and provide value for organizations, HR will need to change the approach of supporting employees. Instead of a more HR-employee kind of dialog, we’re going to see it becoming more “adult to adult” conversation. This means that HR professionals will need to work to improve employee journey in the organization and help them achieve their development goals as well.
Creating such a culture goes well beyond asking employees what their professional development goals are. Here are just some of the changes that employee-centric culture requires:
Making changes to IT infrastructure to enable it to serve employees better, from anywhere (cloud HR solutions, etc.)
Conducting regular employee surveys to find out their opinions on the latest news, decisions, etc. and recommendations on the company’s developments, policies, etc., and help them share new ideas
Introducing a flexible working schedule. This means providing remote work opportunities and other perks enabling to improve work-life balance
Making the workplace more employee-friendly. This includes introducing such ideas as student loan reimbursements, loyalty programs, therapy or spa treatments, in-house celebrations, and other perks
Making changes to leadership styles. Managers and supervisors should transform their personal leadership style to harmonize it with the employee-centric culture, i.e. adding such features as being more open, taking employee suggestions, giving constructive feedback, and conducting talent conversations.
Not only employee-centric culture allows employees to contribute more to the organization, but it also improves their commitment as well as the desire to stay. With the ongoing talent shortage that HR tries to battle with advanced recruitment strategies, this is simply priceless.
Stage III: Introducing Workforce Analytics and Reporting
Most companies today are sitting on an unbelievable amount of HR data without doing anything to take advantage of it. One of the main reasons why companies fail to understand and leverage workplace analytics is the lack of tools able to deliver, but this is quickly changing due to the arrival of Artificial Intelligence-powered systems.
The simplest way in which one could demonstrate the value of using workplace analytics is the transition from “What is happening?” to “What might be happening?”
For example, a company has tons of workforce data but can’t quite understand the main drivers of trends. This is the initial point in the so-called “information maturity curve,” which one can summarize by “What is happening” question (because that’s what HR is asking at that point).
The next stage in the information maturity curve is the transition to basic workplace analytics by using technology; at this point, HR finds out the answer to the “Why is it happening?” question, or discover the reasons behind HR trends in an organization.
The final stage occurs when HR develops the ability to take advantage of functional and predictive analytics, and finally is able to answer “What might be happening?” question. At this point, the insights produced by HR analytics are perfectly suitable to be used for strategic HR decisions that increase business value.
Here’s an example of how a data analytics tool can help with generating helpful insights:
A skills gap in the workforce that overinflated sourcing costs and led to underperformance
Report and data used to generate analytics:
Unfilled jobs reports, data on applications to fill these jobs, data on the time to hire a person for a critical job, and the report on internal movement by skills
Insights Generated (Results of the Analysis):
The analysis tool has discovered that a) the hiring process for the critical jobs has slowed down in 6 months, leading to an increase in the time needed to fill these positions, b) the pool of applicants has decreased by 30 percent within a year, c) the available skills in the workforce are insufficient to close the gap.
Actions to Resolve the Issue:
The management can decide to implement the following actions: a) make changes in hiring policies to recruit from other regions of the country or international candidates, b) use social media recruiting tools and research to locate more candidates and invite them for an interview, c) reduce the time spent by recruitment professionals on sources failing to provide candidates.
As you can see, a data-driven approach could be effective to obtain specific insights and make evidence-based decisions to resolve HR-related problems.
So there you go, 3 stages of the successful HR transformation strategy, explained as simple as possible. Clearly, this time the scope and effect of the transformation are wider and more complex than ever, so the journey to a completely new HR won’t be easy. However, this is something that companies will have to do to stay competitive and address the issues that businesses face in the current ever-changing environment.