Why HR should be leading digital transformation from the front

Research shows that the biggest pressures HR leaders face lies in ensuring effective digital transformation, but rather than see it as challenge, HR leaders should act as a catalyst for change and lead from the front

HR leaders are under immense pressure to juggle the demands of their role with the needs of their business against a backdrop of some of the greatest challenges of their career. According to research from professional services firm, EY, challenges include the need for HR leaders to demonstrate the financial impact of the HR function and the need to become a trusted senior advisor within their organisation.

But the pressure to develop a digital workplace is proving the greatest challenge, with the majority (70 per cent) of the 2,500-plus HR leaders polled for EY’s HR under pressure survey having felt an increased need to up their game in applying both HR technology and analytic skills to their role in the past three years.

HR leaders vs. other leaders on key challenges

But just 16 per cent of respondents to the survey feel prepared for a digital workplace, which compares with 37 per cent of all leaders, who feel very prepared. This is perhaps unsurprising given the pressures currently facing HR leaders.

Mary Woolf, Senior Manager, EY people advisory services, explains: “[HR professionals] are getting a 360 degree impact from digital transformation, because they’re both trying to help shape where their organisations are going while trying to live their own transformation through automation and artificial intelligence, so they’ve got a huge learning curve for themselves around how to do digital to help them better support the business.”

She adds: “HR professionals must educate their business on digital and what’s different, and how the business can start using digital to help themselves, so [HR leaders are] both the recipients of [digital transformation and] the owners of it, and [they are] having to retool themselves because of it.”

“HR professionals must educate their business on digital…and how the business can start using digital to help themselves”

HR leaders and the digital transformation starting point

HR leaders should focus immediately on five key action points to help themselves and their organisations prepare for digital transformation.

1. Understand what digital transformation actually means

A common mistake that many business leaders make is to consider digital transformation purely in terms of digital technology. But as Woolf explains: “The reality is that digital isn’t a thing anymore. It’s embedded into the way that we work [and] it’s embedded into the way we approach our tasks every day, [so] HR needs to figure out how it weaves through the business to be a natural part of how it operates.”

HR leaders must also consider digital natives coming into the workplace, for whom digital technology and a more collaborative working environment with a flatter management hierarchy are key.

Although most organisations are still hierarchy- and consensus-driven organisations, digital transformation is driving a shift towards agile working practices, employee empowerment and decision-making at lower levels.

Organisations are starting to work horizontally, yet their structures are inherently vertical, from profit and loss accounts to performance management systems and operating processes. These traditional hierarchical frameworks simply don’t align with the collaborative, horizontal frameworks enabled by digital transformation.

HR leaders therefore need to start role modelling a more collaborative and horizontal working practice within their own business function. By leading the way, it will enable them to secure buy-in from the rest of the business for the work ahead around digital transformation.

2. Build capability in business acumen

To effectively role model the behaviours required for digital transformation, HR leaders need to formulate their own strategy, which requires them to identify exactly what they want their function to be in the next few years and their business case for how they plan to achieve this. This requires a long hard look at every aspect of the HR function, from its technology to the programmes it plans to deliver out to the business.

Ultimately, this review should enable them to identify areas that could benefit from digital automation, to enable them to, for example, better perform administrative tasks, as well as programmes that may no longer be creating value for their organisation. Ultimately, HR leaders must identify how to become more strategically focused.

How to differentiate

3. Rethink talent management

Talent management is a key area in which HR leaders can learn to become more strategically focussed. In fact, HR leaders can lead from the front and differentiate themselves from their peers by overhauling their approach to talent management altogether, starting with themselves and their own team. This should include a review of the skill sets they have in place, the skills they need to support the future direction of the business and a strategy for how they plan to plug any gaps in between.

HR leaders then need to consider whether or not upskilling is a viable option and if not, how employees from different job roles around the business could help move their team in the right strategic direction.

Ms. Woolf says: “The roles that HR professionals did yesterday are not the roles that they have to do tomorrow, so how do HR leaders start looking at the market to bring in a very different kind of HR professional than they have traditionally had?”

“How do HR leaders start looking at the market to bring in a very different kind of HR professional than they have traditionally had?”

One example is an HR leader having recruited a chief marketing officer in a bid to gain a fresh perspective on the customer experience in place within their organisation.

4. Reposition HR

As part and parcel of this rethink around talent management, HR leaders must also consider HR’s raison d’etre, which will in many cases require the repositioning of their function. Woolf explains: “Traditionally, people feel that HR should be about the care and feeding of employees, that it keeps people inspired and pulling together to keep the business moving forward; but that’s not what HR over the years has morphed into. It’s morphed into a compliance group [focused on] protection for the company, and so it needs to shift back out of that.”

HR leaders must return to being employee champions who can unleash the potential of people, which by necessity must involve the relinquishing of non-HR tasks. By setting boundaries and communicating to the business exactly where HR function’s remit stops, HR leaders can return to what they do best: employee relations. This links nicely back to point one, whereby HR leaders who truly understand the essence of digital transformation can take a strategic approach to using technology to help streamline their function and free up the time they require to better support their workforce.

5. Identify business strategy

But HR first needs a catalyst to make the aforementioned changes in preparation for digital transformation, which according to Woolf will depend on the imperatives of their business and the external pressures under which they will be working, be they industry pressures, revenue pressures, regulatory pressures, ethical pressures or the pressure of uncertainty.

“What’s the vision they’re going after? What are - in three sentences - the things that they’re going to achieve? Until that purpose and pressure is defined and clear, HR doesn’t have a clearly defined reason to shift and equally doesn’t know which direction to shift in,” she says, before concluding: “They need that direction first.”