Digital HR: what it is, what it is for and new strategies [mini guide]

Welcome to the era of Digital HR! In recent years, the digital revolution has put companies and their business models to the test: technology has not only impacted processes but has above all helped to disrupt the relationship between companies and customers in favor of the latter and to create new business models. For their very survival, therefore, companies must not only learn to adapt and react to change, but above all, they have to be able to do it quickly.

Confronted by these challenges, people are the real critical success factor in organizations. In the research ”Leaders 2020” published by Oxford Economics, on the key success factors in the digital economy, it emerges what the so-called ”Digital Winners” companies have in common are:

1. executives with enhanced digital skills, a global mindset, and the ability to make decisions based on objective data
2. strong leadership culture
3. more motivated employees
4. less vertical and bureaucratized organizational structures with decision-making delegated to project teams
5. programs for the dissemination of technological and digital skills at all levels of the organization

In this Digital Transformation context, Human Resources are called upon to play a crucial role. In particular, they must focus on securing the right professional skills, designing agile and efficient organizational structures, and spreading the right culture to attract talent and motivate employees. We will see how Digital HR can support this complex mission in a little while.

What is meant by Digital HR?

Let’s face it: HR management in companies has rarely been a promoter of innovation; on the contrary, it has often been accused of being too focused on administrative and bureaucratic aspects and sometimes of struggling to keep up with business needs, ultimately making a modest contribution.

We have already seen how the human factor plays a crucial role in guiding the company through its journey of digital transformation. It is therefore the right time for HR to renew themselves and play a leading role in helping the business make this transformation. And this cannot be separated from the use of specific indicators such as Human Resources KPIs.

In keeping with this objective, HR has the potential to take advantage of digital HR, a new approach that relies on technology (social, mobile, analytics, and cloud) to completely redesign the employer experience with the aim of:

1. reducing the complexity and volume of information and communications that employees handle
2. increasing productivity, but also worker satisfaction
3. changing the way people are selected, trained, and motivated

Let us have a look at where Digital HR can make the most relevant contribution to the Digital Transformation process.

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1. Involvement and motivation of people

The importance of involvement starts from the realization that nowadays people – and this is even more true for millennials – are not so much or mainly motivated by the economic factor as by the fact that they have goals and can enjoy a certain autonomy in pursuing them, by the opportunities for growth and development of skills, but also by the prospect of working in flexible contexts, receiving recognition for their work and gaining visibility internally and externally.

Companies thus find themselves competing with each other not only to attract but also to retain the most valuable resources, typically profiles with technological and digital skills, whose demand on the market exceeds supply, based on ”soft” characteristics such as, for example, corporate culture, leadership type, the relationship between colleagues, work organization, growth and learning opportunities, mission and values, etc.

In short, organizations aim to be seen as ”great places to work”.

But what characteristics must a company have to qualify as a ”great place to work”?

• first of all, to constantly listen to the feedback of the workforce and the critical issues that are highlighted to be able to intervene promptly
• to have leaders who can inspire and develop talent
• to make workers feel they have a purpose and recognize their work
• to ensure a good degree of flexibility and autonomy
• to allow people to express their creativity
• to study pathways for skills development and professional growth, not necessarily of a vertical nature

Apart from the tools used to communicate this image to the outside world, when they are motivated and content, the most credible ambassadors of these messages to the outside world are certainly the employees.

Contribution of Digital HR

Nowadays, some tools make it possible to monitor the level of employee involvement almost in real-time, but there are still many companies that do not carry out any kind of monitoring or do so too infrequently, for example, on an annual basis. This testifies to the fact that, apart from the tools, a cultural change is first and foremost needed at the company level, starting with top management.

An example of the application of the new Digital HR to Performance Management and thus to people’s engagement is provided by GE Power, which has replaced the annual evaluation system with a Performance Development system that allows managers and employees to engage in constant dialogue on topics such as:

1. the professional growth of the employee,
2. the company’s business objectives
3. the evaluation of the manager by the employee

Annual goals have been replaced by short-term objectives and evaluation is no longer based on grades or scores but on the identification of what the employee should continue to do vs. what he/she should consider changing. At any time, the employee can ask for feedback from his or her direct boss and also from other colleagues. Although the app (called PD@GE) is the enabling element, the success factor is the ”coach” mentality that it has managed to spread throughout the organization.

2. Digital HR for redesigning the work experience

While the diffusion of technology has brought unquestionable advantages, it has also contributed to a disproportionate increase in the amount of information a worker has to handle, without increasing productivity. At the same time, organizational structures are also changing with the diffusion of team networks and project work to the detriment of the traditional division by functions.

It has therefore become necessary to redesign work environments and processes to simplify to increase productivity and satisfaction by allowing people to focus on activities that truly bring added value.

The role of design thinking in Digital HR

In the Digital HR field, the branch of design thinking is particularly relevant. This term refers to the ability to design environments and tools to support work requirements, starting from studying ”personas”, as its traditionally done in the design of products and services for customers.

To approach the design of apps and tools successfully, we have to ask ourselves what features they must have to guarantee the best user experience.

Examples of routine activities that can be made more efficient by this approach are training, onboarding of new employees, attendance management, holiday planning, and expense reports.

An interesting example related to onboarding is Telstra, an Australian telecommunications company. Telstra hires thousands of workers a year, but has often experienced problems with low motivation and high turnover of new hires, probably due to the sheer volume and complexity of information that must be metabolized upon joining the company: from the number of products, systems and tariff plans to the corporate culture. Telstra used Digital HR and design thinking to develop a 90-day employee onboarding program. The project was instrumental in reducing the integration time of new employees in the company and increasing their satisfaction.

The main success factors of the project were:

1. the thorough initial analysis phase was based on numerous interviews and focus groups, which made it possible to focus on critical issues and objectives
2. the adoption of an agile development and testing process, based on rough prototypes, to speed up the service tuning process after each test cycle
3. the use of simulation tools for the new onboarding process aimed at involving future sponsors in the project

3. Training

The rapid evolution of technology and market contexts has made the need to train people stronger than ever, but traditional modes of course delivery based on classroom presence or otherwise static and inflexible approaches are no longer adequate.

We live in an era where learning can no longer be a ”one-off” but has to be a continuous process. People must be empowered to provide for their own training needs, decide when, how, and where to access courses, and be able to choose between internal and external sources (e.g. online courses such as MOOCs, on-demand courses, etc.).

In this area, Digital HR can also play a very important role by promoting the development of new training delivery models and sharing knowledge and skills among colleagues.

Mastercard is an example of a company undergoing a profound transformation: from a credit card business to a full-fledged technology company in the world of payments.

Along with this change came the need to spread a more entrepreneurial mindset in the organization, but according to Janice Burns, Chief Learning Officer, this process cannot be guided and imposed from above, but has to stem from the spontaneous and convinced adherence of employees. Every moment can become the right learning opportunity.

But what does the company do in practice to encourage this process?

• it organizes innovation workshops where employees can brainstorm and exchange ideas
• it facilitates mutual training between colleagues
• reverse mentoring, i.e. the scheduling of formal opportunities for juniors and seniors to meet each other, with a mutual commitment to share each other’s expertise.
• it develops internal social learning platforms to foster the propagation of innovative ideas.

New business ideas have emerged from these initiatives, for example:

1. the introduction of contactless payments at metro turnstiles,
2. the purchase and payment of products, e.g. perfumes, directly from advertisements in magazine apps
3. launch a special type of ”benefit card” that identifies the owner via fingerprints and voice recognition to minimize the risk of theft.

4. People Analytics

Another field of action of Digital HR is People Analytics, i.e. systems that enable the collection and analysis of data on employees (from internal and external sources) to develop predictive models and answer questions such as:

1. what are the factors that attract talent to the company, enable them to perform brilliantly and convince them to stay?
2. which personal characteristics are most likely to make people successful leaders, salespeople, innovators, etc.?
3. which profiles are more at risk of leaving or what kind of people are most likely to break the rules?

People analytics systems are now widespread in the market and even included in most corporate ERP systems, but let’s look at some examples of use.

• recruiting: Cisco talent analytics to decide whether or not to open a new office in a certain area of China
  The area looked promising from the height of its pool of 1 million university graduates, but a closer analysis revealed that barely 10% of the pool possessed the skills sought and allowed Cisco to search for a different area before making costly investments.
  In general, Cisco uses people analytics to support its network of around 200 recruiters to fill the 10-15,000 positions that open annually, reducing time and costs.

• productivity: some companies, e.g., have analyzed the sales performance of their agents and found that it is related more to their network of contacts and time spent with customers than to years of experience or the amount of training received. Another example of use is the analysis of email metadata to determine the cause of the difference in productivity between people and identify corrective actions (e.g. reducing the number of meetings the less productive they have to attend).

• retention: people analytics can also be used to understand, based on the analysis of personal profiles on LinkedIn and other social networks, which of a company’s highest-potential people are most at risk of leaving. In the United States, Nielsen used people analytics to understand the causes behind the increase in the number of people leaving. Using a simple but quickly implemented model, they were able to discover, for example, that the peaks in turnover were not related to gender or ethnicity, but to seniority. In particular, the segment of recruits with less than 1-year of seniority was the most critical. The analysis also revealed that a good lever to convince this group to stay in the company was not only ”vertical” promotion, but also the offer of job rotation opportunities.

5. Recruitment and Employer Branding

Recruitment goes hand in hand with employer branding. In addition to establishing a relationship with online candidates, recruiters within companies must also learn how to develop and nurture a company’s reputation.

Employer branding is precisely about the image, values, and reputation that a company builds for itself as an employer. Similarly to traditional branding, which is aimed at customers, employer branding also aims to communicate to the market the characteristics that make a company different and more desirable from others but does so from a professional and employment perspective. The ultimate goal is to win the talent acquisition competition and to retain those already hired.

Human Resources must therefore adopt real marketing strategies to promote the ”company’ brand”:

1. identifying the most effective communication channels: from offline events (e.g. trade fairs, events, career days) to the press and through to the website and social media
2. taking care of content, including through the use of ”brand ambassadors” identified among the most convincing and charismatic employees, who are certainly more credible than recruiters
3. monitoring and managing the web reputation

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Personnel selection today also requires a proactive approach by HR: instead of waiting for replies to advertisements, it’s necessary to intercept the right candidates before they are offered on the market. And to do so, a solid knowledge of the different social media is required (from LinkedIn to Twitch Instagram to Snapchat) and their peculiarities to intercept the different targets with the right platform and the most appropriate language. Social media recruiting is one of the most effective tools for finding people in line with the positions sought.

A recent example of the use of Snapchat is offered by McDonald’s in Australia: applicants are not asked for a CV, but rather a snap to send to the company’s Snapchat profile.

Twitter is also widespread among companies as a recruiting tool: both Disney and BNL have created specific accounts, e.g. @TWDCJobs and @ BNLJob, respectively, while others, e.g. Accenture, post open positions on the official account together with other information about events and news.

Conclusions

As we have seen, Human Resources can play an important leading role in this phase of major business transformation.

To succeed in doing so, however, they need to radically change their skins, bringing in professionals experienced in digital marketing, design thinking, and analytics, and training their employees to acquire all the digital skills needed to interpret the new phenomena taking place and to ride them.

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