While none of the HR's prior responsibilities has gone away, HR departments today are under pressure to rewrite the rules by redesigning talent practices, from recruiting to leadership to performance management; by experimenting with digital apps; and by building a compelling employee experience. All this must be done with a focus on redesigning the organization around teams, implementing analytics and organizational network analysis, and driving a global focus on diversity, culture, learning, and careers.
Digital HR is built on innovation and experimentation. As companies become networks and the employee base becomes both older and younger, new approaches are needed in almost every HR domain. Companies often now use hackathons, rapid design groups, and both prototypes and "minimally viable products" to roll out pilot HR programs.
Design thinking has gone mainstream. Rather than deliver HR programs designed around legacy business processes, HR teams now study employee needs across all segments: hourly workers, salaried employees, managers, executives. Instead of traditional career models, HR is offering journey maps and replacing complex processes with local practices based on an integrated platform. (See the Ford case study in the "Employee experience" chapter of this report.)
Digital HR requires digital technology expertise. While cloud-based HR systems brought tremendous value to organizations, they are no longer enough. Today, HR teams are rethinking their solutions in the context of workflow-embedded apps; Royal Bank of Canada, Deutsche Telekom, Ford, and others now have digital design teams within the HR department. This means using the cloud as a "platform" and building on it for company-specific needs.
The vendor market is reinventing itself: A new breed of HR products and solutions is coming to market, many built around mobile apps, AI, and consumer-like experiences. These tools are enabling HR to become near-real time. As digital HR takes hold and HR organizations become more platform based, business partners are becoming more digitally empowered and able to spend more time in the business.
Where companies can start
- Redefine your mission: HR today must define its role as the team that helps management and employees rapidly transform and adapt to the digital way of thinking. Familiarize yourself with networked organization structures, organizational network analysis, and digital leadership models.
- Upgrade core technology: Replace legacy systems with an integrated cloud platform for a sound digital infrastructure. Upgrade old tools for learning, recruiting, and performance management, and bring in systems that are easy for employees to use.
- Develop a multiyear HR technology strategy: In today's rapidly changing HR technology world, it's important to build a multiyear strategy that includes cloud enterprise resource planning (ERP) platforms, apps, analytics, and a range of tools for AI, case management, and other solutions.
- Build a digital HR team: Dedicate teams to explore new vendor solutions and build others, and consider AI solutions to improve service delivery, recruiting, and learning.
- Organize HR into networks of expertise with strong business partners: Rethink your HR organization model to focus efforts on the employee experience, analytics, culture, and the new world of learning. Make sure these teams communicate well: High-performing HR teams share leading practices and know what the other teams are doing.
- Make innovation a core strategy within HR: Push your self to reinvent and innovate in every people practice. Many organizations are now using new performance management practices built around design sessions. Investigate new innovations in recruiting, including using data to find people who resemble high performers in the company.
- Rotate younger people into the HR profession: Regularly rotate people from the business into and out of HR, use innovation teams to reverse-mentor senior leaders, and recruit new MBAs to bring people with analytics skills into the profession.
- Benchmark: Visit other companies to see what they are doing. HR teams can bring in outside speakers, join research membership programs, and continually look for new ideas to foster innovation. Today's leading practices come from innovative ideas developed around an organization's culture and business needs, not a book.
Further, the HR platform and HR operations center have been designed and built using an agile approach that included multiple releases of both the systems and operations center. This agile approach has enabled the HR process, policy, HR IT, and business teams to learn and build capabilities in the new digital HR environment.