Digitisation in HR

The remit of an HR manager is very broad. The more time they spend on salary administration or expenses, the less time they have for topics such as employer branding or Talent Management. A company can differentiate itself on the market with good employer branding - but hardly with a salary paid on time. The aim of Digitization should be to put HR employees at the heart of the process and simplify or eliminate routine work. The Harvard Business Review documents this connection in a study as follows: Pioneers in Digitization are typically also the pioneers in their industry. If you want to be competitive and a market leader in your Industry, you need to keep your HR tools up to date. We show you which three levers are available to you to achieve this.

Accept the new reality

Many companies rely on old RFPs (Request for Proposal) or existing process documentation to select one or more tools. However, the stored requirements often date back to a time when the Nokia 8210 was all the rage. An SMS was limited to 160 characters, emojis did not exist and there were three letters on a key. Based on the conditions of the time, a special SMS language was created. But who still knows Nokia today? No one today would think of looking for a device that primarily has buttons with a good pressure point. Unfortunately, similar scenarios often occur in HR.

For example, a large industrial group has purchased an expense tool and is trying to fit it over the existing country organisations and guidelines. However, the guidelines, payment strategy and travel organisation were completely outdated. Five years later, most employees are still submitting their expenses via Excel and HR still has no overview of whether the guidelines are being adhered to or not.

A global chemical manufacturer has done things differently: global guidelines and payment methods have been harmonised thanks to comprehensive reporting options and the consolidation of all expenses in one tool. All employees in 29 countries now use the same expense process, the same expense types and the same checking mechanisms. Only legal aspects have been adapted locally. The effort involved in the expense process has been massively reduced and the overall costs have been minimised.

So before you invest heavily in Digitization, it is crucial to understand what goal you are pursuing and how this can be achieved with today's technical possibilities. Also review your processes and guidelines. Bring them up to date. What has been done in the last 20 years should carry significantly less weight.

Put employees at the centre

Digitization today is often based on the requirements in HR. However, this is a mistake. HR should put its "customers", i.e. the employees, at the centre. This approach can also be illustrated well.

The HR department of a Swiss packaging company is relatively satisfied with its processes. Wages are paid on time and working hours are recorded correctly. In recent years, a lot of time and money has been invested in an on-premise solution. The company now wants to protect these investments and hold back innovation. The problem is that many of the company's employees are extremely dissatisfied. The company is in the bottom third of the ratings on Kununu. HR is not making a positive contribution to improvement with the existing processes. There are also risks for the company because application processes do not comply with data protection regulations, for example. Application dossiers are sent around by email and not always deleted in time.

A private equity company, on the other hand, consistently places its employees at the centre and offers almost all Services via a cloud platform. The company is extremely successful and attracts the best talent in the Industry. Here, too, HR is not solely responsible, but smooth administrative processes allow it to focus more on employee-related topics such as employer branding, well-being and Talent Management.

Develop an HR vision and strategy and put your "customers", the employees, at the centre. Think about what added value you want to offer your customers as HR. Use simple and proven tools such as the Business Model Canvas or Kim & Mauborgne's Value Curves to identify this benefit. Identify the areas in which you can offer the greatest added value and start Digitization there. Don't be afraid to question existing and rigid processes, especially if they stand in the way of modernisation.

Digitise end-to-end

HR is a collection of dozens of interlocking processes. There are countless tools for every small and large process. There are over 300 solutions for performance management alone. As good as some of these tools are, they are of little use if they are not part of a comprehensive digitalisation strategy.

BMW currently produces the i3 with a relatively short range of 200 kilometres and does not provide a charging infrastructure. As has been the case for the last 20 years, owners have to drive to a garage to carry out a software update. The company was one of the first to start series production of electric cars in 2013. Today, BMW's head of development, Klaus Fröhlich, concludes that people are still not really interested in electric cars.

Tesla, on the other hand, is pursuing a different model. The company offers a network of more than 1,300 charging stations and sells vehicles with ranges of 300 to 600 kilometres. The cars are regularly updated over-the-air. In several countries, the Model 3 is the best-selling vehicle in its class. While Tesla has thought through the issue end-to-end, BMW has only focussed on the technical solution. The result: with a Tesla, you can drive from Sweden to Sicily without any problems. With an i3, this endeavour becomes a test of patience due to different plugs, charging standards, long charging times and poor aerodynamics. Another consequence: BMW is now losing massive market share to Tesla. In the USA, more Tesla Model 3s are sold than cars in the same class from BMW, Audi and Mercedes combined - without advertising and discounts.

Take a holistic approach to HR digitisation. Even if digitisation is an iterative process, it is essential to have a strategy for it. This is the only way to minimise media disruptions, reduce costs and ensure an optimal Employee Experience.

Once you have selected solutions, they can be further connected and optimised - via various types of integration:

• User integration: For example, a chatbot that can be used to access various Services. Employees are not interested in the tools used in the background.
• Process integration: With the help of RPA (Robotic Process Automation), cross-tool process steps, such as onboarding, can be highly automated. For example, guidelines or course invitations can be sent automatically upon enrolment.
• System integration: interfaces and APIs ensure smooth data synchronisation between different solutions.

There is no single recipe for successful Digitization in HR - the starting points are too different for that. However, you can avoid many stumbling blocks with the following steps:

1. Create resources to drive the topic forward.
2. Put together a strong team. Put your "racehorses" in position: a team that is open and capable of driving digital change forward. This team does not have to consist exclusively of HR.
3. Develop an HR strategy that puts your employees at the centre.
4. Think in terms of end-to-end processes. Analyse processes from the perspective of your employees.
5. Start with the topics that deliver the greatest added value. Sell your strategy internally with a sound business case.

Sources

• https://c1.sfdcstatic.com/content/dam/web/en_us/www/assets/pdf/misc/hbr-report-salesforce.pdf
• https://www.g2.com/categories/performance-management