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Are You Prepared for the Digital HR Transformation?

Human Resources

The digital era is transforming human resource processes, responsibilities, and career opportunities. Some organizations have embraced this transformation, while others are struggling with the uncertainty of strategically managing the rapid pace of change.

At the 2017 HR Tech Conference in Las Vegas, Mike DiClaudio of KPMG spoke about how organizations are looking at the digital HR transformation through two distinct lenses.

Views on HR transformation

According to a 2017 KPMG survey, one group of companies has readily adopted cloud HCM platforms, leveraged shared services, and is leading the way on automation with a high degree of direct access.

The second group of organizations are deeply invested in legacy HR systems. They have many HR business partner populations, no direct access, and are skeptical of automation.

Their executives know how “disruptive” digital HR capabilities could benefit their business, but they’re not sure if they have the infrastructure, skills, and talent to successfully adapt to the changes.

  • 65% say they view tech disruption as an opportunity.
  • 68% have taken steps to challenge themselves in the past year.

This is an opening for HR to figure out how to bring the appropriate talent and capabilities to their company. HR strategy in that sense is not simply about quickly filling open positions; it’s about hiring for the skills and talent necessary to meet company needs now and into the future.

Are companies prepared for change?

Of members of the first group who have embraced the digital HR transformation:

  • 91% have moderate to extensive change management capabilities.
  • 66% are driving the conversation on the impact of intelligent automation inside their organization.
  • 92% view intelligent automation as having a significant impact on the HR function.

Members of the more skeptical group don’t think of artificial intelligence (AI) in HR systems as a real possibility, and are focused much more on process. A significant percentage have major challenges in delivering strategic HR value to their companies.

  • 43% acknowledged shortcomings in supporting new HR technologies.
  • 36% stated they have inadequate change management capabilities.

Of the full 887 executives polled as part of the KPMG study, one-third planned to implement a new human resource management system (HRMS) in 2017. Among the anticipated benefits of the switch:

  • 63% thought they would improve HR transaction processing.
  • 62% saw themselves delivering value-added services.

In order to prepare for implementing a new HRMS, HR departments have taken these steps over the past 18 months:

  • 63% improved people management.
  • 60% have reengineered key HR processes.
  • 44% have refocused the role of HR business partners.

One goal, two outcomes

KPMG found that among companies who tried to implement cloud HR technology, 75 percent claimed success.

Some common factors between these organizations:

  • 72% have changed their operating model alongside their implementation.
  • 73% have built a business case that identified clear measures for success.
  • 89% are viewed as adding strategic value to their business.

For the 11 percent of organization for which their cloud HR technology did not meet expectations:

  • 85% reported not changing roles or structure consistent with their transformation.
  • 90% did not identify measures for success and managed their program against those metrics.
  • 75% reported having moderate to no change management capabilities.

Intelligent automation is coming

As the pace of change accelerates, HR leaders may have a more difficult time staying out of the way of their own processes to provide strategic value to the business. That’s where cognitive automation may become helpful.

The field of HR automation has quickly evolved from basic process automation to enhanced process automation, to cognitive automation. Or in other words, from rules engine, visual data collection, and workflow to processing of unstructured data and base knowledge, to AI/predictive analytics, and evidence-based learning and decision making.

These emerging cognitive systems mimic human brain functions: perceiving, reasoning, and learning. They find patterns in a company’s information and provide insights based on those patterns.

They ultimately may become personal assistants for businesses in the way that Amazon’s Alexa functions in the consumer market. But even with full cognitive automation, experienced HR professionals will still be needed to provide proper guidance, ethics, and direction.

Augmenting, not replacing, expertise

In that sense, intelligent automation isn’t about replacement, it’s about augmentation. It allows HR departments to get more work done, faster, so they can provide more strategic value to the company.

36% of organizations expect to employ intelligent automation, primarily in these areas:

  • 61% talent management
  • 57% talent acquisition/onboarding

Anticipated benefits include:

  • 56% improved performance
  • 54% positioning staff for more strategic work

The right place at the right time

The digital era of HR is here whether your organization is ready for it or not. By looking at this HR transformation through the lens of opportunity, rather than fear, you can help your company take advantage of powerful innovations, such as the integrated Paychex Flex® HCM technology and service platform.

As the KPMG research shows, embracing change, preparing, and staying flexible could help you get the most strategic value from HR now – and well into the future. Make sure your HR department, and your company, are ready.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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