A Pink Slip for Digital Technology? Three-Quarters of HR Executives Say Current Digital Tools Have Not Yet Delivered Optimal ...
October 10 2018 - 9:51AM
Digital technologies power the evolution of employment practices,
but the transformation has not been easy for many human resources
departments. According Bain & Company, three-quarters of HR
executives and managers say their current technologies have not yet
achieved optimal performance, threatening their ability to attract,
hire, develop and retain the best talent in their industries, and
leaving them at a considerable disadvantage among their
competition.
Bain & Company’s latest report, HR’s New Digital Mandate,
which includes results from a survey of 500 HR executives and
managers in the US, UK and Germany, illuminates where the pitfalls
lie and how HR functions can take advantage of digital’s
potential.
“In the ongoing battle for top talent, digital technologies play
an increasingly prominent role,” said Michael Heric, a partner in
Bain & Company’s Performance Improvement practice.
“Digital tools offer new ways for human resources teams to attract
great talent, as well as reduce costs. Business outcomes such
as speed, quality and accuracy are also becoming major reasons to
invest, but many businesses already lag in their adoption and
application of these tools, leaving the door open to competitive
threats.”
Survey results reveal that some 87 percent of respondents
believe that digital will fundamentally change HR, but 75 percent
acknowledge that their IT systems and technology have not yet
achieved the business outcomes they desire. The good news is that
digital transformation in HR is still in its early stages; however
the window of time to catch up may be closing as 57 percent of
respondents plan to increase their IT budgets by as much as 10
percent over next two years; one-quarter plan to increase budgets
by more than that.
Despite the increased appetite among HR leaders for more digital
tools, Heric cautions about HR departments’ ability to absorb
them. Depending on the HR process in question, the research
found that 23 percent to 31 percent of HR departments still use
manual, Excel-based or paper-based processes as their primary
method for delivering different HR services. Bain &
Company anticipates that will change drastically over the next two
years: for instance, from 23 percent of HR departments primarily
using manual processes in recruiting to 4 percent, and from 31
percent to 7 percent in career management. Some 78 percent of HR
departments expect to use machine learning in at least one HR
process within two years.
The challenge will be to integrate all of the new technology on
top of already disparate tools, many of which are unintegrated,
have interfaces that users find difficult to understand or are
missing critical functions.
Drawing on the experiences of leading HR teams, combined with
insights gleaned from Bain & Company’s research, the report
identifies six rules of engagement companies can follow to take the
reins of their digital transformation:
- Measure success based on business outcomes.
Historically, HR used its technology to improve productivity.
Today, the role of technology in HR has become more
prominent. In fact, for areas other than payroll and
recruiting, reducing process-level costs is a much lower priority
than broader business outcomes such as speed, accuracy and
quality.
- Bring rich, consumer-grade experiences to the
workplace. HR’s customers across the lifecycle –
from candidate to retiring employee – increasingly expect an
experience as easy, convenient and personalized as they encounter
with the best retailers or service providers. Leading companies are
using digital technologies to meet these expectations.
- Raise the game on analytics. Analytics is
proving to be a critical means of informing HR decisions, such as
limiting the number of required candidate interviews; creating an
onboarding agenda for an employee’s first week of work; and
producing an algorithm to review rejected applications that allow
companies to hire talent that a traditional screening process would
otherwise have missed.
- Test and learn. Companies can get a lot of
mileage out of technologies even at the experimental stage, such as
chatbots that can field notifications from call-center employees
who are too sick to come to work to help managers adjust schedules
automatically.
- Build ecosystems, not islands. As
employees increasingly expect access to best-of-breed content,
services, and networks, HR departments are turning to partners
outside the organization to staff HR related events and
resources.
- Fix and simplify processes, data and systems.
RPA and machine learning have a broad range of valuable use cases.
Often, though, it would be better if companies could simplify and
standardize underlying business processes, data and systems, which
would reduce the manual work in need of automation through RPA in
the first place.
“Human intervention is still critical to HR to assess and
motivate people, but the range of use cases for digital continues
to grow, and the mandate for HR executives is clear,” said Heric.
“They have an opportunity to create a portfolio of digital bets
that will transform the workforce experience, make better talent
decisions through analytics, automate processes, free up time for
higher value activities, reduce costs, and most importantly,
improve business outcomes.”
Editor's Note: To arrange an
interview, contact Dan Pinkney at dan.pinkney@bain.com or +1 646
562 8102
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Media Contact:Dan PinkneyBain & CompanyTel:
+1 646 562 8102dan.pinkney@bain.com