Stages of HR Digital Transformation

As a people-centric role, human resources (HR), is one of the key business functions that can benefit from digital transformation in an organization.

According to EY, digital HR keeps employees satisfied and helps to attract new talent. Working with customers at FlowForma I see many other benefits for the HR department. Productivity improvements, enhanced employee experience and driving cost savings are just some of the outcomes I see regularly.

In this blog, I will provide a guide to start and scale HR digital transformation alongside real-world case studies of successful digitalization programs. You'll leave with actionable insights into best practices to begin your HR digital transformation journey. Let’s get started.

What is HR digital transformation?

HR digital transformation is the empowerment of managers, employees and candidates with digital technologies to improve experiences, processes and workflows. Digital transformation supports HR to work faster, smarter and more productively.

In HR, many of the daily tasks are human-centric and repetitive. Onboarding, for example, is a process that is a prerequisite for any new starter for an organization.

As a task that requires a series of repetitive steps, it is ideally suited to digital transformation and process automation.

Digital transformation will not only benefit the managers leading HR but also the IT department, staff and external stakeholders involved in HR processes.

Why is HR digital transformation important?

As a key driver of success in the digital age, digital transformation is pivotal for the HR function. Here I highlight the key reasons why digital transformation is important for HR.

Data driven decision making

Digital transformation facilitates the capturing of data digitally through digital technologies and the reporting of this data through visually rich dashboards.

This evolution in how data is captured, reported and analyzed provides HR managers and senior business leaders in organizations with a 360 degree view of HR performance and enables stakeholders to make better decisions based on real-time data.

Here I'll provide a real-world example of an HR dashboard created with FlowForma's analytics component. This illustrates how stakeholders can easily access, report and analyze HR process data for better decision-making.

Enhance employee and delegate experiences

According to EY, organizations that invest in employee experience achieve higher profits, revenues, productivity, and employee retention compared to those that do not. 

HR digital transformation provides a more streamlined employee experience. Digital tools improve productivity, freeing up time for more value-added tasks.

With a successful HR transformation process, prospective employees engaging with HR will experience a modern, engaging process, creating a positive first impression of an organization.

Improve HR productivity

Productivity improvement is a key outcome of HR automation. Within the digital transformation ecosystem, process automation is one of the major drivers of productivity improvement via the automation of HR processes.

All employees involved in HR processes, as well as HR leaders, can benefit from digital transformation. Improved productivity will free workers time to focus on value-added tasks.

Lower HR costs

In our world, digital process automation is the engine room of HR digital transformation. Digital process automation drives productivity improvement, which in turn unlocks significant cost savings for HR. In today's cost-focused business environment, cost savings are welcome news for HR functions.

Examples of HR digital transformation

HR onboarding

Onboarding is one of the key HR use cases that we see digitalized. Onboarding requires recruits, employees or external stakeholders to go through a series of steps to complete the onboarding process.

It is therefore an ideal task to automate and deliver immediate ROI to employees, process owners and the wider HR team.

One organization that has benefitted from onboarding digitalization is Morgan Construction, a leader in heavy civil construction, mine development, environmental projects, and oil and gas construction.

Morgan Construction implemented FlowForma Process Automation as a workflow solution to streamline the onboarding process, minimize human errors, and enable automated, accurate progress reporting.

The team at Morgan Construction is now better organized, with enhanced control to prevent manual errors, and can access timely and accurate results and reports. This efficiency has saved a significant amount of time, enabling Morgan Construction to scale its business without needing to create new positions.

Read more about the Morgan Construction case study here.

Interested to see how fast and easy it is to digitalize an onboarding process?

Watch FlowForma's product experts digitalize an onboarding process in under one hour:

Performance appraisal

Performance appraisals are a key stage in every employee's journey. This process analyses key performance indicators, provides a platform for feedback and guides employees' journey within an organization.

When performance appraisals are conducted using spreadsheets or emails there are risks to data quality, lost information and delayed employee communications. Automating the performance appraisal process has significant benefits to both HR and the employee experience. Including:

• Accelerated communication

• Accurate data for employee appraisal

• Enhanced employee experience

• Time savings for the HR team

• Cost savings for HR

A tangible example of an HR team successfully digitalizing performance appraisal is Eurofound, the EU Agency for the improvement of living and working conditions. The company's Human Resource Development Plan (HRDP), which motivated the investment in FlowForma Process Automation, is a comprehensive employee review process conducted annually.

This process engages all employees and is guided by each staff member’s reporting officer to evaluate job performance and ensure alignment with core company values.

Following initial training from the FlowForma team, Eurofound took just one week to develop a solution tailored to the complexities of the HRDP. This solution involved multiple stakeholders, incorporated extensive form exchanges, and included an appeals process within the workflow.

This was just one of the processes digitalized by Eurofound. As a result of its digital transformation program, they achieved 75% efficiency improvement for the business.

Read more about the Eurofound case study here.

Annual leave / Paid Time Off (PTO)

Requesting annual leave is a standard process within every organization. However, it can be resource-heavy for HR when the process is recorded in spreadsheets or emails.

There is also the risk of data inconsistencies when annual leave is recorded using manual methods.

As a repetitive human-based process, annual leave is an ideal process to digitalize. HR departments can benefit from digitalizing annual leave processes including:

• Improved visibility of annual leave for employees and the HR team

• Save time, money, and resources with productivity improvements

• Data is accurate and reduces the risk of employees taking additional annual leave

• Improved employee experience with a fast, simple, and accessible way to request annual leave

The stages of HR digital transformation

One framework for HR digital transformation that I like to reference was coined by the esteemed digital analyst, anthropologist, and futurist Brian Solis. This six-step digital transformation framework can be applied to HR as well as other business functions. Here are the key stages:

1. Business as usual

We have all experienced a workplace where the employees weren't happy with the status quo. Picture a time when you knew HR processes were slow, broken, or simply wrong. Legacy technologies are used, data is siloed and information is hard to find.

But, the senior leaders in the organization are not prioritizing digital transformation to address these challenges. This is what's called 'business as usual'. The organization is aware of the challenges but has not committed to solving the problems.

2. Present and active

The process of HR digital transformation starts. Tools are deployed to support digital transformation and drive the project forward. HR is educated about digital transformation. At this stage, digital champions will naturally emerge in your HR department.

In the FlowForma world, we call these champions citizen developers. Citizen developers are non-IT employees who have an interest in digital and who can digitalize processes using a no code tool like FlowForma Process Automation.

3. Formalized

Digital transformation is underway for the HR department. Having digitalized its first process successfully, the HR leaders are looking to digitalize more processes across its function. Data is surfaced to HR leaders and senior business management, helping to inform decisions.

4. Strategic

At this stage, data is central to the HR digital transformation journey. HR leaders and senior management are looking to shape the future strategy and expand digitalization. A roadmap of strategic digitalization initiatives is developed, and additional resources, and funding are allocated.

5. Converged

This stage is where organizations achieve true economies of scale and ROI. Digitalization expands beyond the HR department to other functions. The value of digitalization is surfaced via executive dashboards that showcase the ROI from the tech investment.

6. Innovative and adaptive

Innovation and data take center stage as continuous improvement initiatives are deployed. The HR digital transformation begins the cycle of improvement based on real-time data for informed decision-making.

Continuous improvement drives further ROI to support the expansion of digital transformation within the organization.

How to get started with HR digital transformation

Like any project, I would recommend a strategic approach to HR digital transformation. Here I've created a handy checklist for you to follow to guarantee success.