How to Drive Digital Transformation from the HR Function
Posted inHR Trends
onJuly 29th, 2019
- Updated onJuly 30, 2019 - 2:49pm
According to Gartner’s 2018 CHRO survey, 61% of CHROs are unprepared to manage digital transformation, whether for the business or their function. For many, this uncertainty may stem from the considerable difference between today’s activities and the demands of tomorrow’s organization.
In the Gartner’s 2018 Annual CHRO survey, HR Digitalization was the number one priority in 2018 among CHROs they surveyed.
“Heads of HR are under extreme pressure right now to realize the promise digitalization has to offer.” Gartner 2019
Gartner identified five macro strategies the HR function is expected to employ to lead its own digital transformation:
- Attract more digital candidates
- Gain better insights about employees
- Coach managers to develop the digital capabilities of their team
- Improve technology to drive employee self-service at work
- Evolve performance management
Over the course of two meetings, members of AJO’s HR Leader Exchange (HRLE) explored this topic from two perspectives:
- HR’s functional digital initiatives
- HR’s broader role in driving digital transformation across the enterprise
HRLE members shared what their organizations are doing, tackling questions such as:
- Who owns digital?
- What actions should HR be taking now?
- How to attract talent and assess digital mindset in prospective employees?
- What does an HR leader need to be effective in digital transformation?
- How do HR leaders need to think and act differently?
- How to cater to the multi-generational workforce?
Taking the Pulse of Digital and HR
The first HRLE meeting earlier this year benchmarked where HRLE members are today. Participants explored digital transformation by way of seven key impacts as shown below, giving consideration to what it takes for HR leaders to be effective today.
Eight actions that HR should be taking, as proposed by the Conference Board, were reviewed and discussed (see graphic below).
Source: Driving Digital Transformation. What's the Role of HR, Conference Board | 2018
Ahead of the meeting, seven HRLE members shared their input (shown below). The resulting discussion and input from additional participants reinforced these findings. The bottom line is that HR organizations of all sizes have some catching up to do.
|HR Leader Exchange: HR & Digital Survey||To a great extent||To some extent||Not at all|
|To what extent has your organization taken a deep dive into digital transformation?||14%||57%||29%|
|To what extent is HR building a deeper understanding of what is changing?||86%||14%|
|Is HR partnering with IT leaders on the digital strategy?||14%||43%||43%|
|To what extent is HR helping the organization identify how leaders and employees will need to behave differently as a result of the digital transformation?||57%||43%|
|To what extent is HR leading the effort to replace outmoded aspects of culture and build new ones as needed?||86%||14%|
|To what extent are you in the process of determining the optimal organizational structure required to support the digital transformation?||14%||43%||43%|
|To what extent are you defining new leadership behaviors and competencies that will be required to lead the digital transformation effort?||43%||57%|
|To what extent will existing leaders be reviewed for suitability and redeploy or release those who can't adapt?||14%||71%||14%|
|To what extent is HR identifying how the organization's demand for talent will change as a result of the digital transformation?||14%||71%||14%|
|To what extent is HR optimizing the mix of technology and people?||71%||29%|
|To what extent are you proactively seeking new types of talent, where to find them, and what they want?||43%||57%|
|To what extent are you currently reviewing the need for a more flexible resourcing strategy that includes contingent workers?||14%||57%||29%|
|To what extent are you redesigning HR practices to fit the new business model?||14%||57%||29%|
|To what extent are you assessing your internal talent supply regarding skills, adaptability, and learning agility?||100%|
Survey of HR Leader Exchange Members - March 2019 n = 7
The second meeting took a deeper dive into how HR is leveraging digital technologies with special consideration to changing workforce demographics. The discussion was led by Lori Torell, Associate Director, IT Account Services at Merck Animal Health. She was joined by Anna Verrichia, Associate Specialist. Lori introduced herself as a GenXer while Anna is a Gen Y.
Digital Transformation and AI in Hiring
- New hiring technologies allow HR to connect, scale, and individualize the candidate experience. Lori demonstrated the pace of digital transformation occurring within HR by referencing several hiring tools:
- Textio to write unbiased job postings and attract a more diverse pool of applicants
- Wonderkind leverages AI to find candidates based on their online behavior and targets them with the right job ads on social media, Google, and beyond.
- Pymetrics uses simple online “culturally agnostic” games to measure traits like spontaneity, attentiveness, and flexibility. Algorithms match candidates to the opportunities where they’re most likely to succeed.
- VidCruiter offers several tools designed to automate and simplify the hiring process while enhancing the quality of applicants.
- Click Boarding delivers a personalized, branded, self-guided onboarding experience that can be accessed any time from any kind of device.
- Hivebrite helps firms create and maintain durable bonds with their former employees.
Some of the key takeaways from the discussion were as follows:
- Differentiation is key to attracting employees. HR is increasingly leveraging digital technologies to attract, hire, onboard, and develop employees. Organizations are advised to let go of ‘boring’ job descriptions that aren’t differentiated from one company to another and focus instead on the employee experience. Describe what your organization can offer by way of its unique culture, its people, and the type of work experiences, versus bullets on a job description.
- Leverage marketing strategies and techniques to sell experiences. HRLE members shared examples of how they are having to think and act like marketers today.
- What’s working:
- Video is attracting more candidates
- Social media channels such as Instagram and Facebook, although younger generations favor Snapchat over Facebook
- A “Talent Tuesday” on LinkedIn that focuses on one job each week
- What’s working:
The challenge: Treading a fine line between technology that targets an audience or social channel and avoiding potentially discriminatory practices of excluding populations.
How Can HR Partner with IT?
HRLE leaders touched on the importance of working across functional boundaries and adopting agile ways of working. Lori Torell urged HR leaders to partner with IT, bringing in their IT colleagues early and often as new HR technologies are being assessed. When a true partnership is established, IT can provide valuable input and help when it comes to making the business case, becoming a strong advocate.
Hiring ‘Digital Mindset’ Employees
Lori Torell suggested that hiring practices are changing, as companies push forward their digital transformation. Not only are companies creating digital transformation roles or offices, but day to day job openings are now more focused on digital skills as well. Three shifts were noted by Lori as shown below.
“There is a change coming, one that sounds a bit out there, but the walls between functions – like sales, marketing and IT are breaking down. Agile teams are being put together, for a brand or a geographic market, where everyone works together, sharing traditional roles. Competitor info and customer insights are parlayed into new marketing/sales tactics and then results are quickly measured and the cycle starts again.”
Lori Torell, Associate Director, IT Account Services at Merck Animal Health
What are the Digital Mindset Skills and Competencies Companies Should Seek and Develop?
According to the Conference Board, only 10% of executives surveyed agreed that their leadership team has the skills and knowledge needed for the company to succeed in the digital world.
HRLE members discussed the skills and competencies demanded of future employees, concurring with the themes outlined in the Conference Board’s report with respect to those specifically demanded of leaders. Although not intended as an exhaustive list, the Conference Board highlighted these digital leader skillsets:
- Flexible in the face of ambiguity and change
- Able to cede some of their status and power to empower others
- More transparent, sharing information more freely
- More open to risk-taking and iterative innovation
- Active learners, not just subject matter experts
Lori advised that potential candidates will evaluate your organization on where it stands digitally. Some recruits will want to work for a market leader while others will prefer to help a company leapfrog the competition. She recommended knowing where you are and looking for candidates that will be the best match for not just where you are, but also where you want to go. She shared the following “Digital Benchmarking” job aid to help position where your organization sits relative to its competition.
Shaping Organization Culture
One common theme that emerged from the Conference Board study and a Harvard Business Review entitled Building the AI-Powered Organization is the importance of shaping organizational culture to overcome barriers to transformation success. The HBR article authors, all McKinsey practitioners, argue that only 8% of firms in their research engaged in core practices that support widespread adoption. They argue that organizational leaders must work on breaking down the formidable cultural and organizational barriers by making these three shifts:
- From siloed work to interdisciplinary collaboration.
- From experience-based, leader-driven decision making to data-driven decision making at the front line.
- From rigid and risk-averse to agile, experimental, and adaptable.
Managing the multi-generational workforce - A Millennial Perspective
HRLE meeting participants also heard from Anna Verrichia, a self-described “Gen Y on the cusp of Gen Z” from Merck Animal Health. Anna offered perspectives on Gen Y and digital and Gen Y and culture, providing insights into the mindsets of those born digital.
Anna shared data she had gathered from 35 of her Merck millennial peers in preparation for the meeting, highlighting the generational backdrop against which digital transformation initiatives are being implemented and which will impact future work and organization culture. The following are the poll responses from her 35 peers.
(Scale: 5- Very important, 4- Fairly important, 3- Important, 2- Slightly important, 1- Not at all important)
Anna made the following points:
- Millennials don’t open their laptops when they can access information on their phones, which is the ‘go-to source’ for quick answers on how to do something.
- 60% do not have work email on their phones
- “Lazy” is the stereotype that bothers millennials in the workplace the most. There’s a desire for work-life balance and a flexible (non 9-5) culture where they can arrive earlier and leave earlier “when their work is done”. This desire may have been misconstrued by older generations for whom working long hours was seen as important for career progression
- Their biggest concern as a millennial in the workplace is the expectation that they need to gain experience rather than being given opportunities. They are entrepreneurial, seeking jobs with purpose and advancement. They are less loyal (more like consumer shoppers)
- 49% millennials openly talk about finances/salary
Since the HRLE agreed that one of the ways to support each other is through sharing information, the following list includes references from this post and additional reading.
Recommended Reading & References
Hiring Reading & References
- The 2019 State of Artificial Intelligence in Talent Acquisition: Get ahead of the curve in an area that promises high impact and dramatic growth by HR Research Institute. Insights into today's usage and understanding of AI in recruitment, the utility of specific AI-related tools, the future impact of AI in talent acquisition, and how AI is affecting and will affect major areas of recruitment - including candidate sourcing, candidate assessments, candidate interviews, candidate selection, and onboarding.
HR and Digital Transformation
- 5 Business Strategies for CHROs to Lead Digital Transformation by Mary Baker | Gartner, 2018
- Agile in HR: It Has Arrived by Josh Bersin | June 18, 2019
- Driving Digital Transformation – What’s the Role Of HR? – Conference Board, 2018. “The digitization of HR is a hot topic among human capital practitioners and thought leaders. But when HR leaders think about digital transformation’s impacts, they often focus on the ways technology can improve the delivery of HR services. Far less attention has been paid to digital transformation’s impact HR’s role: 1) the new ways it’s expected to deliver business value and 2) the knowledge, capabilities, and skills HR leaders need to deliver against those expectations. This report, third in a series from The Conference Board on digital transformation and human capital, defines what HR leaders must do to help their companies succeed in digital transformation with its unique business and human capital challenges.”
- Gartner Top 3 Priorities for HR Leaders in 2019 by Jackie Wiles | Gartner, 2018. 843 HR leaders globally identified these three initiatives as priorities for HR in 2019.
- HR Faces a Growing Digital-Skills Talent Gap by Tom Starner | May 1, 2019. HR executives need to start planning a strategy for closing the impending digital skills gap, according to new research from The Hackett Group: The Next-Generation HR Talent Profile: How Will You Fill the Digital Skills Gap? HR executives need to recruit new digital talent skills but upskill existing talent as well.
- HR Under Pressure: Falling Behind in the Race to Transform by Richard Wellins and Sayed Sadjady | DDI Global Leadership Forecast, 2018. The authors address where HR is today and conclude with advice on where to start, and how to excel and differentiate.
- What HR Transformations are on the Horizon? by Tony DiRomualdo and Franco Girimonte | July 19, 2019. Experts from the Hackett Group explore how digital technology is changing HR.
Digital Mindset Resources
- 7 ways to develop a digital-first mindset by James Aguilan | Oct 2018. Seven steps to developing the right mindset to make a success of your transformation.
- Digital Transformation 101- by Brian Solis | July 15th, 2019. Brian defines digital transformation and outlines the six phases that companies pursue in the quest to achieve digital transformation.
- Raising your Digital Quotient by Tanguy Catlin, Jay Scanlan, and Paul Willmott | McKinsey Quarterly, 2015.
Digital Transformation Leadership
- Building the AI-Powered Organization by Tim Fountaine, Brian McCarthy, and Tamim Saleh. | HBR Vol 97, Issue 4, July-Aug 2019
- Digital transformation and AI adoption: 5 lessons from senior leaders by Alison DeNisco Rayome, April 16, 2019. Organizations have high aspirations for digital transformation and AI use, but face several challenges, according to Boston Consulting Group.
- Digital Proficiency - A 2020 Leadership Competency The fourth in AJO’s series of 2020 leadership competencies explores digital proficiency.
- How CEOs can tap AI’s full potential Also download PwC’s full report (PDF) for a deep dive into AI, including a chapter on preparing your people to work differently.
Pam Grosicki is AJO's VP, Marketing and Communications. After her first career in Human Resources in diverse U.K. organizations, Pam leverages her passions for adult learning and development, marketing and branding, social media, and technology to her second career as an HR marketer in the U.S. She lives in Asheville, NC with her husband and their current canine companion, Gus who they rescued from a local animal shelter.