Digital HR transformations: a general overview

Technology is constantly changing the world and the era of true digital disruption has finally been hitting HR. It is the hot spot of changes, and it needs to figure out what all of this means by redesigning jobs, work, and organizations, so the people will finally get more importance.

The current situation

In 2016 companies realized that the way candidates looked for jobs, captured feedbacks and communicated could have been digitalized with new platforms. Having considered that already more than 50% of internet traffic was coming from mobile devices, yet fewer than 20% of HR applications were running on mobile computers or mobile phones.
So, HR has to do a massive work to overcome the new digital challenges and adopt a digital mindset. This is possible only if HR partners works with IT, adopt design thinking, understanding what people do during their workday and creating user experiences through the digital world, integrate analytics, and analyzing vendor solutions carefully.

The HR technology industry has received more than 2 billion dollars in 2015 to invest in recruitment, performance management, learning,  feedback and employee engagement. It represents a new world for HR technology and design teams, one that will open up new career opportunities and transform the impact HR has on the businesses.

According to Josh Bersin..

This digital HR trend is very significant, as Josh Bersin points out here, as a consequence of the overwhelming working situation for the employees. If digital platforms are always available for employees, the outcome will be reached easily, quickly and successfully. Almost all employees act now like volunteers: they do what they can with their time, and creating digital tools is a clever and successful choice for companies to make this process easy.

Digital is the new e- in e-learning, for example, as Bersin stated in a conference in India for People Matters TechR 2016, and everybody is wondering what does it mean and how to deal with it. 75-80% of the companies in the world are actually worried about how to handle the digital disruption, because they know that it will change everything. The reason why companies like Uber or Airbnb are on the spotlight in this matter is that they are not just approaching technology, but they are also re-organizing themselves and the people within the company. It is a perfect mixture of IT and HR, something that these digital disrupters understood. Uber is, for example, a decentralized company and decisions are made also outside the headquarters in San Francisco, and Airbnb does not have a central structure either. In 2016, 92% of the companies did not feel organized enough to succeed, and only 14% of them knew how to actually re-organize digitally.

In the same conference, Bersin did six examples of digital disruptions taking place right now in large companies: the first one is the shift from cloud to mobile; the second one is the wave of new tools and applications; the third one is explosion of technology for culture and feedbacks; the fourth is a new generation of learning tools; the fifth is analytics and the sixth and last one s the shift from designing processing to design thinking, considered by him the real future of HR.

Some data around the world

In Bersin’s 2017 findings it is claimed that the need to get more digital implies also a new way of managing and engaging with people. Not only is digital transformation a sparkly new technological path, but also a new way of cooperation, collaboration and smarter working. The companies themselves need to be more agile in order to absorb this digital wave, because the 20th century organizational structures are rapidly changing.

This graph shows how countries around the world have been considering digital innovation lately: Southeast Asia, for example, is at the very top of the list, then we do have India, The Netherlands, Australia, South Africa and Italy (on a range that goes from 1 to 100, Southeast Asia won an 83% for the importance given to the challenge of becoming more digital, while Italy, for example, 76%) , afterwords countries like UK, China, Spain, Germany, Brazil and USA a medium level of importance (with a range that goes from 75% to 69%) and, at the bottom of the list, Canada and Japan (respectively, 67% and 61%).

A perfect example of IT and digital HR renovation was made by Reliance Jio, the 4G telecommunications and digital services company headquartered in Mumbai, India, that started its revolution and launched digital telecom services in early 2016, aiming at building a national 4G network across almost 20,000 cities and towns in India. From its start, the HR program was digital in order to allow recruiters, candidates, managers and employees to complete their HR tasks, and these processes and technologies were all supported by apps, reporting and HR operation.
Another example is Timken Company, a leading manufacturer of industrial and automotive components, that has a global workforce with more than 21,000 employees in more than 33 countries. Timken Company decided to move its HR operations on a cloud-based HR solution to support  processes, including recruiting, payroll, succession planning, learning, performance management and workforce analytics. The solution reduced the time it took to pull operations reports, helped accessing business intelligence,  helped with employee engagement and also with satisfaction.

Some data from Europe

Also in Europe some changes have been made: according to studies conducted at the end of 2016 and showed at the beginning of 2017 by PAC, the 52% of European companies claimed that the work environment is ‘very important’ for the success of their company, while the 22% stated it’s ‘critical’ to the company’s economic performance. And the 63% of companies are currently planning to invest in modern apps and technologies within two years time.
PAC confirms once again that companies and business in general should be ready to start new paths in design, operations, management and strategy, but it needs a smart planning.

UK seems to be leading in the delivery and execution of HR digital new practices and it considers IT renovation as a priority in its agenda, but it seems to be less vital in the actual workplace modernization. This slow migration seems caused by the high propensity of service sector organisations in the UK. The cloud readiness and transformation have been highly criticised, and they are both kind of fundamental. Mobile working support is ranked very similarly all over Europe, but in UK the displeasure and annoyance coming from latest worksplace apps and mobile work network access reaches even the 67%.
French companies are deciding how to build their future digital workplaces at this very moment, while in Belgium mobile working seems already to be particularly well supported. Germany is highlighted as a late comer to readying its workforce for the future of work.

..And what about Italy?

For what concerns Italy, in 2016 about 41% of the companies under exam by Osservatorio HR Innovation Practice of the School of Management of Politecnico di Milano understood the importance of digitalization and have started HR Big Data and Analytic projects, regardless of the high costs and the long timing that it required.
Today the number of people involved in the cloud-based systems is about 150 million all around the world, and social recruiters like LinkedIn can now expand the recruitment as never before. The war of talent has now gone digital, and all the players have to learn how to compete in this new era. The 20% of the Italian companies invest in digital learning and the 75% of the companies think  that digital learning is the most interesting way to train people, through webinars (used in the 60% of the enterprises), MOOC (Massive Open Online Courses – 40%), social media (43%), community app (28%), and online tutors (25%).
During the digitalization process many new job positions arose, and nowadays the most needed positions are: digital marketing manager (provided by 22% of the companies), social media recruiting specialist (20%), social media manager (18%), technology marketing officer (16%), digital workspace manager (15%), digital learning specialist (13%).

The Italian Best Practices

Last year the Osservatorio HR Innovation Practice of the School of Management of Politecnico di Milano assigned its award HR Innovation Award 2016 to some Italian enterprises’ best practices that made a real difference when it came to digital HR. The declared winners were: ENI, for the training programs EniCampus and Global Eni Training System, that introduced a teacher-participant interaction training method; Assicurazioni Generali, in the Talent Management section, for its new platform that ensured meritocracy and transparncy; and and last but not least  Gruppo Segesta, in the category Employees administration, thanks to which the company started to make all its administrative processes, its payroll management and reporting completely digital.

Deloitte did a study last year and found out that USA employees check their phones 8 billion times per day. And.. we are not getting anything out of it. Economic productivity in this Fourth Industrial Revolution has actually slowed down since the internet was launched. Why? In Bersin’s opinion, it is because we are still trying to figure out how to manage this power and we did not get to the solution yet.

To conclude, all companies have been facing digitalization and, like it or not, they all need to adapt. The ones that will be struggling less will be Meritocracy’s beloved start ups, already used to being digital and technologically up-to-date. But they all need to adapt and manage this new trend because we cannot predict what technology will do, but HR impact will be growing, that is for sure.