The human resources (HR) department is probably the most impacted group in any organization since the pandemic struck. One reason is the acceleration of digital transformation among companies where nearly three quarters (74 percent) of the businesses surveyed in the Philippines have embarked on the digital transformation journey at the height of the health crisis in 2020, according to a study commissioned by Epson. This makes it more difficult for the organization’s culture to adapt to the digitization that’s sweeping the company, presenting challenges to HR professionals.
Another driver is the work-from-home arrangement which is now transitioning to hybrid work, i.e., a combination of remote work and on’site work. This is creating challenges to HR groups in the areas of staffing, performance management, and ensuring productivity. Lastly, these drivers are forcing HR operations to transform and digitize to align with the digital transformation strategy of the organization.
All these compel the HR departments of organizations to transform digitally. HR digital transformation is a set of initiatives to leverage on and align with the company’s digital transformation, hinging on three pillars.
The first is transforming organizational culture. While most of the companies now are embarking on digital transformation, culture remains to be the single biggest barrier to its success. HR’s role is to align the company’s culture with the transformation initiatives, by developing among the employees a strong shared sense of purpose, freedom to experiment, distributed decision-making, agility, and innovation.
The latter is one key component of culture that needs to be developed across the organization. In our consulting work, we help measure, develop, and sustain the culture of innovation among organizations with a methodical approach in transforming the building blocks of innovation — values, behaviors, climate, resources, processes, and success. HR is in the frontline of culture transformation through executive sponsorship, execution, and monitoring.
The second pillar is transforming the way work is done. There’s an ongoing debate on the true impact of work-from-home arrangement on productivity. Mixed reviews and studies on its impact, with some pointing to an unaffected or decline in productivity, while some herald the significant productivity gains.
But wherever employees work, HR needs to provide resources to employees for them to perform their jobs with autonomy, to maintain positive mental health, to participate in e-learning, to develop strong bonds at work, and achieve work-life enhancement. HR needs to the facilitate the provision of devices and tools, decent internet connection, and other employee services tools.
The third and last pillar is transforming HR operations. Before the pandemic, chief executive officers (CEO) prioritized other functional groups in digital transformation efforts, such as operations, customer, service, and marketing and sales. The HR department is always left behind.
But with the acceleration of digital transformation across the organization, with its attendant changes in culture and the way work is done, HR operations likewise need to transform to enable the other transformation pillars. Sadly, the 74 percent of the small and medium enterprises that embarked on the digital transformation journey at the height of the pandemic still focused on the marketing and sales, and customer interaction, according to the study.
Therefore, HR departments need to get the buy-in of the CEO and the board to its operational transformation the addresses the people-related challenges such as staffing, performance management, compensation management, and training and development of employees. HR needs to modernize its operations with human capital management systems, performance management systems, learning management systems, and health and safety monitoring systems. With all these systems available in the cloud, it is easier for HR to justify the investment with usage or subscription fees.
As with any digital transformation, HR digital transformation is a journey that’s starts with having clear goals and a plan, getting the buy-in of the CEO and the board, implementing pilots and phases to effectively manage it, and adjusting before implementing company-wide.
But ultimately, it’s the responsibility of the HR executive to own these initiatives and align with the organization’s digital transformation strategy.
The author is the founder and CEO of Hungry Workhorse, a digital and culture transformation consulting firm. He is a Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at firstname.lastname@example.org