HR Digital Disruption: The Biggest Wave Of Transformation In Decades

by James Larkin on 13 February 2017

While digital is successfully disrupting almost every industry it comes into contact with, it is also set to revolutionize how organizations and companies themselves operate, meaning big changes are afoot for any CHRO.  HR technology is becoming an area of utmost strategic importance: with over $2Bn invested in 2015*, the trend continued in 2016 and investment levels are expected to continue rising. The change to the HR department that digital technology will bring will be all pervasive and omni-directional throughout every company. This paper explores these manifold changes and clusters them into three broad groups: ‘Inward’ (changes to the office of the CHRO), ‘Outward’ (changes at the employee / manager level) and ‘Across’ (changes to the organization at large).

Looking Inward: digital enablement of the CHRO’s office

Over the next few years, the CHRO will become one of the more tech-savvy executives on the management committee. Already we have begun to see many CHROs recruit or develop a Head of HR Transformation or Head of HR Technology & Services to kick off this agenda, starting with the replacement of old, licensed HR platforms with modern, cloud based technologies that offer greater insight through analytics and more flexibility to scale HR services up and down. For many, this is the first step to becoming an agile, digital HR environment.  In addition, we can expect more plug-and-play solutions within the CHRO’s arsenal as we witness an explosion of solutions in the market for recruitment, talent management and employee development.

Work reflects play – aligning learning & engagement technology with the social realm

Employee engagement and learning technologies have taken a page out of social media’s playbook, with many organizations pursuing strategies to roll out employee communication technology that mimics social media’s quick, versatile, and multi-channel approach. The employee of the future will digest information from their employer digitally, on a mobile device (typically on the go), in either an easy to digest video/audio format or as user-friendly articles. Be it a company’s quarterly earnings, a message from the CEO, or changes being made to the company’s benefits program, such content will be consumed and shared around the organization in a manner similar to how content flows through social networks today – liked, shared, and interacted with.

In addition to putting the HR department in every employee’s pocket, HR applications will need to become far more customer-centric, and follow the principles that today’s consumers demand: think mobile shopping or Google’s suite of products. Stellar UX, granular levels of personalization and immediacy of use will be paramount for an HR organization to keep employees engaged. Employees will expect an intranet to be engaging and personalized, and even self-curated - similar to their experiences with modern social media, online shopping and entertainment providers.

Learning & Development will go through a similar change – already we are seeing organizations’ success stories in P2P learning, video learning, and localized mentorship across groups of peer-level employees. This modern approach to learning & development will increase in a digital HR environment – the old model of reverting to class based learning, or stationary, solitary PC-based surveys and courses will soon be a thing of the past.

A new suite of tools: multiple measurements of employee success

Another aspect of inward-facing changes will be performance and talent management. In the last three years alone, we have seen an explosion of new market entrants looking to disrupt the formerly steady ERP ecosystem. Instead of large, clunky enterprise systems, these new entrants are offering deeper insight and greater agility in decision making than ever – all of them looking to plug into a digital CHRO’s portfolio. The roster of start-ups and new services in this space alone is astounding. It ranges from real-time employee recognition, to wellness and mindfulness tools; from tools to allow employee level goal management and completion to apps for attendance management and employee location management; from video recruiting to online bias training.  

Moreover, with the workforce of tomorrow consisting primarily of millennials, talent development methodologies will change in tandem with this digital revolution. Gamification of career development will ensure employees stay motivated month-to-month and quarter-to-quarter. With an HR organization that is primarily cloud-based, and capable of integrating multiple third party solutions, the CHRO of the future will be more enabled, more informed, and more strategic, than ever.  

Looking Outward: digital technology enabling the workforce and management

Outside of the CHRO’s department, employees beyond HR will feel this digital revolution just as much as their HR counterparts. Employees will have the HR department in their pocket, and be able to execute their responsibilities more efficiently than ever. They will be more informed (through personalized intranets and channels of information), more engaged (through crowd-curated content and more natural communication technologies) and more career focused (maintaining a line of sight into their career and development from month to month/ quarter to quarter) than ever, with digital technology as the enabler.

Multi-use of mobile devices becoming the norm

Employees will become more de-tethered from the office, and will have a suite of products that allows them to operate from anywhere and work on anything. One of the biggest issues on the CIO’s agenda for 2016, which will continue into 2017, was employee enablement technology, and creating the digital workplace – allowing employees the ability to work, and collaborate, across multiple devices. The CHRO and CIO should be leading this agenda in lockstep, to ensure that no function or group of employees are left out. Whereas a few years ago digital enablement really meant ‘enabling the salesforce’ with mobile devices, this transformation will be about ensuring employees feel as connected to the company as possible, whenever and wherever they work. Central to this is a design-focused approach to processes, applications, user experience and flexible labor. 

Analytics and customization – enabling employee and management

With cloud technology solutions increasing across the marketplace (aside from the CHRO’s office), more employee data is obtainable than ever. With this data comes the potential for customization and increased agility. Employees will be able to give real time feedback to management on new applications and business processes, providing the HR department instant insight into culture-effecting gripes and department-wide bugbears with technology.  Furthermore, with a multitude of connected digital devices, managers (and the CHRO) will be equipped with masses of data that can be leveraged to optimize training and personal development, improve business process, increase performance and reward staff in a more meaningful fashion. With all this data flooding into the CHRO’s department, there is likely to be a rapid increase in the demand for stand-along HR Analytics departments.

Looking Across: digital will unlock the millennial generation’s talent

Aside from the factors discussed in ‘Looking Inward’ and ‘Looking Outward’ occurring en masse throughout an organization, a digital environment will foster collaboration, creativity and new strategy generation like never before. We are already starting to see real-time opinions being shared by employees – some organizations have already begun trialing a red-amber-green system for individual employees to log their satisfaction (both generally and relating to specific issues), giving insight into leader’s management style, agreement with a business strategy or direction, and potentially giving employees an anonymous channel to speak up when they see improper practices.

The next step is to democratize leadership and decision making, giving employees a direct channel to the management committee to voice their concerns, share their ideas and potentially add to (or change) a company’s strategy – many expect this form of bottom-up strategy creation to become the norm in the workplace of tomorrow. 

Furthermore, better digital technology for collaboration will allow business silos to break down, and cross-functional partnerships to become commonplace – teams from around the world will be able to socialize, comment, and improve one another’s work in real time. Employees will no longer feel like localized employees in their office or city, but global citizens of their organization.

When one takes into account that three of the biggest complaints from millennials regarding today’s corporate work environment are: I) feeling a lack purpose and progression in their career; ii) not being heard by management and; iii) not feeling connected or loyal to their company; opening up new channels of digital collaboration - with their teammates, inter-department peers, and with management - could be the key to unlocking an entire generation of talent.

Digital is no longer a department or the sole remit of the Chief Digital Officer. It is a way of working that pervades the entire organization, from the CEO downwards. Talent, engagement, innovation and cross-functional thinking are crucial. The HR function has the chance to play a pivotal role in leveraging the power of digital transformation and enablement, ensuring that companies attract, retain, and reap value from top millennial talent and thereby stay ahead of the competition.      

*According to research conducted by CB Insights.