Business Demand Makes Digital HR the Top Priority for CHROs

Determined to increase employee productivity, business leaders are giving a higher priority to using advanced HR technology, increasing pressure on CHROs to put digitalization ahead of other efforts such as improving performance reviews and leveraging workforce analytics.

According to Brian Kropp, group vice president of Gartner’s HR practice, CEOs are pushing HR to drive digital transformation and increase innovation throughout the organization. “The organizations that get it right and are able to improve their innovative effectiveness can increase annual revenue by as much as $8,800 per employee,” he said.

This is no small thing, and not only because such dollars are in play. Just a few years ago, the idea of having HR drive most any kind of technology effort was all but unheard of. However, the rapid spread of technology in both the business and consumer worlds has had such an impact on how employees work that integrating it into company operations at all levels and in all functions has become an imperative.

In fact, organizations are increasing their focus on the solutions HR technology can provide as opposed to how a product actually works. Recent conversations with business and HR leaders, users and vendors reveal an increasing focus on a product’s performance and how easily it can be integrated with other tools and processes. As we’ve reported, “artificial intelligence” and “machine learning” are transforming from buzzwords to table stakes.

Culture Critical to Digitalization Success

One question HR and business leaders face is whether it’s better buy or build their digital talent, Gartner said. The company’s research suggests the answer is both: find qualified candidates outside the organization—an obvious challenge in today’s labor market—and develop the digital skills of current employees.

However, the research firm warned, pursuing those courses alone won’t be enough to help companies transform themselves. Organizations must change from within for digital innovation to occur, it said.

That means culture matters, perhaps as much as new technology. Rather than concentrate developing an innovation mindset among individuals and teams, Gartner said its research, “found a broader, more network-based approach to cultivating innovation achieves the best results.”

“Individual or team-based innovation strategies improve innovative effectiveness only marginally,” said Kopp. “[They] typically involve too few actively engaged employees or there’s a lack of momentum for innovative ideas from leadership.”

Strategies For Digitalization

Gartner recommends applying three main strategies to transformation efforts:

1. Involve employees beyond the idea-generation stage. By giving them more visibility into, and ownership of, which ideas to pursue will ensure more workers are actively engaged in innovative efforts.
2. Shift leadership’s thinking toward shared, as opposed to individual, risk taking. HR should help functional leaders collaborate so they can develop a deeper understanding of how to take better “digitally motivated” chances.
3. Supply employees with more guidance on how to use networks to innovate. To accomplish this, HR should take a hard look at how ideas move through the organization and encourage employees to work with colleagues outside their formal structure. In addition, employees should be taught the best ways to move ideas forward.

Many vendors seem to have gotten the message, analysts believe. “Today we pull our phone out, we book a flight, order flowers, whatever–no problem, in seconds. HR should be that way,” one said. “I think that’s what (vendors’) roadmaps are looking like.”

While simplifying digital tools is a big step, tools don’t accomplish much if they’re not used correctly. Gartner’s report is another signal that encouraging learning and flexible processes are becoming more important to a business’s success.

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