HR Digital Transformation: What is it? Are you on board?

Is HR Digital Transformation, just a new buzzword in the HR world?

Or more broadly, in the corporate world?

This is worth exploring. But first, what is HR Digital Transformation?

HR Digital Transformation: Defined

HR Digital Transformation is the process of changing the operational functions of HR to be automated and data driven. Given the business-wide impact of HR, the transformative process, when executed successfully, impacts the entire organisation.

How so?

So, by having more data and insight into performance and efficiency of individual teams, coupled with the right technology, and the way work is done can be completely streamlined. According to Deloitte…

It’s about HR teams taking up the dual challenge of transforming HR operations on the one hand, and transforming the workforce and the way work is done on the other.’

Deloitte Human Capital Trends Report

HR digital transformation is never easy. To be successful, a ‘whole of organisation’ approach needs to be taken, not just the inclusion of and direction from HR.

Also, HR digital transformation isn’t just about technology. This is a common misnomer, and one that can severely limit the potential of transforming the HR business function, and in turn how it serves the entire organisation.

HR digital transformation is about serving the needs of the business and requires the involvement of all business units. It must factor in your strategic intent: from your business strategy to your people strategy.

HR digital transformation starts with:

  • Knowing your people as an organisation: how flexible are they to change? What are their needs? Where are the gaps in efficiency and output? What suggestions are they making for change?
  • Knowing your culture: what will suit the business culture in current state, and how do you foresee the culture changing in a positive way, in line with HR digital transformation
  • Knowing your needs: where are the opportunities to produce better, more efficient, and more commercially robust outcomes?

Once all these factors are identified, then the HR digital transformation strategy can be deployed.

human resources transformation

The Stages of HR Digital Transformation

There are potentially multiple ways to approach HR Digital Transformation. However, the fundamentals of the strategy are largely similar. These are:

HR digital transformation

Source: AIHR

Stage 1: Business as Usual

You recognise the current state of your organisation from the key factors of:

  • Culture
  • Workforce
  • Leadership
  • Strategy
  • Commercial goals
  • Vision

Stage 2: Present and Active

By undertaking various experiments in the organisation, you’re seeking to drive and enhance the digital literacy and creativity of your people.

This might include experiments such as social media listening, to better inform your marketing team. New communications and interactions channels for teams, like SLACK. Gamifying competition within teams for new ideas. These experiments will reveal those workers more likely to be digital champions, ready to facilitate ongoing digital strategy and experimentation.

Stage 3: Formalised

The HR digital transformation gets underway, focused on relevance to the business. Customer and productivity data starts to influence decision making across the business. Gaps in data analytics are identified, enabling further enhancement of the digital pathway. Collaboration across the business increases. Marketing and IT formulate a tech roadmap. Customer journey mapping highlights the new priorities for better customer experiences. Education at all levels of the business enables broader views for digital change.

Stage 4: Strategic

Collaboration starts to pay off in the business. Sharing insights, analysing customer journeys, and refining operations with new technology boosts productivity and efficiency (and talent engagement). The customer becomes the central focus, business wide. With ROI tied to marketing initiatives, business leadership can closely track cross-channel results. Leadership recognises the internal digital change agents, by giving them a seat at the decision-making table. Investment in new people, processes, and technologies ramps up.

Step 5: Converged

An HR digital transformation team is formed, with new talent and newly recognised talent. IT helps to drive and improve the customer experience across the business, thanks to emerging data insights, applied by the relevant teams. Customer journeys are remapped to draw further innovation using digital technologies, coupled with traditional methods for marketing and talent engagement.

Stage 6: Innovation and Adaptation

A new digital ecosystem is established and becomes the new ‘BAU’. A flatter management and decision model replaces the old hierarchy. Customer experience drives product development, marketing, sales, service, and HR. The innovation team monitors digital developments, and a talent gap analysis identifies new hire needs.

HR technology

Getting There: How to Get Started with HR Digital Transformation

STEP 1: Establish a clear goal

Clearly define the business goals, which are initiating the need for HR digital transformation. These goals will typically be a need of employees, or an issue they encounter that HR digital transformation can solve.

It’s important to remember at this early stage, that throughout the process of HR digital transformation, the focus must remain on the employee as the end-user.

STEP 2: Get everyone on board

Buy-in at all levels of the business is crucial for HR digital transformation to be a success. From board level stakeholders, the leadership team, mid-level managers, and staff, this is a process that will affect everyone. The luddites will want to exit if they don’t want to change.

STEP 3: Keep it simple (KISS)

Start the process simple, and small. And grow the reach and impact across the business gradually. Look at the areas of your HR processes that could do with digital remodelling – such as shortlisting, recruitment, onboarding, learning and development, payroll, IT). Talk about this initiative with leadership and employees. Giving everyone a voice will empower people, and gain greater buy-in.

STEP 4: Prioritise the good ideas

There will likely be a multitude of ideas to consider as this process evolves. Prioritise these based on both business impact, and effort. So, what will be the business impact of digitising the ideas, and how much investment will be required to get the ideas off the ground? Start with ideas that are high impact, low effort. This will help build empirical evidence for the business case as the HR digital transformation grows.

STEP 5: Assess performance

Ongoing performance analysis is critical to prove ROI and business success of the HR digital transformation. Critically assess what works, and what doesn’t. And do this without attachment or expectation. Remember: the digital transformation must actually solve real business problems.

STEP 6: Keep culture in mind

Respecting your existing culture and the mindset of your people – from grassroots talent to management – is key in any digitally transformative process. Helping people to understand the power of a digitally enabled operation, and providing them with the right education, will greatly assist in shifting the culture to one that is more digitally minded.

And Finally

Like it or not, HR digital transformation isn’t just a new buzzword in corporate  Australia. Also, it’s not longer an option. It’s inevitable. The pace of change in the business world to one that is heavily digitally enabled, has been staggering in recent years. Keep the benefits and ROI in mind as you embark on your HR digital transformation. Benefits such as:

  • Reduced time to analyse operational reports
  • A more efficient and productive operation
  • A better customer experience
  • More engaged workforce
  • Greater access to business intelligence


As one of the world’s leading providers of contingent worker management solutionsCXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.

If you are interested in discussing our insights on HR digital transformation, and would like to find out more about how we can work together, please contact us.