While there is a large scale fear that automation will replace jobs and humans, Deloitte’s 2014 report “From Brawn to Brain” found out that while 80,000 lower-skilled jobs in the UK were lost over last 15 years to technology, about 3.5 million new highly skilled jobs were created over the same period. This indicates that HR needs to be deeply involved in assessing the impact of technologies on the business and work with the business to help prioritize and deploy effective mechanisms to help employees cope up with this new way of work.
These changes are giving rise to the digital HR, as HR function is asked to help lead the digital transformation of business.
Deloitte’s Human Capital Trends 2017 classifies this change in HR in 3 categories:
- Digital Workforce: How organizations can drive new management practices, a culture of innovation and sharing and a set of talent practices that facilitate a new network-based organization?
- Digital Workplace: How can organizations design a working environment that enables productivity, uses modern communication tools and promotes engagement, wellness and a sense of purpose?
- Digital HR: How can organizations change the HR function itself to operate in a digital way, use digital tools and apps to deliver solutions and continuously experiment and innovate?
In our quest to find out what Indian organizations are doing in these areas and particularly how HR is driving their own digitization agenda, we tried to understand this by talking to a cross-section of HR leaders in various organizations of different sizes and sectors. This article mainly talks about what we found out about the use of technology in HR and the changing nature of HR’s role and skills in different organizations.
The application adoption
As seen in figure 1, here the application adoption is the highest in Payroll, Performance management, Employee survey and Feedback; and Employee Expenses. It is surprising to see that Time and attendance is slightly lower than these categories.
In a highly competitive talent market like India, it’s interesting that only 60 percent of companies are using HR technology in areas like recruitment, onboarding, talent relationship management, and background verification. The other categories mentioned here suggest a significant possible upside for HR technology companies, as more and more companies will look to adopt these solutions.
From this data, it appears that smaller companies are more focused on Learning and Career path as compared to mid and large companies.
Figure 1 - % adoption of various HR technologies by organization size
The cloud adoption
When we look at data about cloud adoption in this dataset we realize that companies are more comfortable putting recruitment, talent relationship management, onboarding, employee survey and feedback and learning solutions in the cloud while still keeping payroll, time and attendance and compensation solutions out of cloud. This data appears to suggest that companies prefer to keep a hybrid environment with certain core applications on-premise and the others in the cloud. With many HR tech vendors making a definitive move to the cloud, they would have to evaluate how they would convince their existing and potential customers to move from on-premise solutions to cloud. The HR leaders, in turn, will have to work with their technology partners to create a strong business case for moving to the cloud.
Figure 2 - % adoption of cloud by organization size
Whose problem are we solving?
HR leaders seem to be more focused on improving efficiency and effectiveness of HR processes than on approaching HR technology investments from a business problem perspective. This could indicate that HR leaders are still being held accountable for HR process metrics, and organizations are yet to really make the transition to hold HR accountable for specific business outcomes.
Figure 3 – Problems being solved by deploying HR technology
When asked to rate factors that impact their decision about HR technology solution, HR leaders are largely focused on integration and getting the right data from the HR technology solution.
The top 3 areas where HR leaders are focusing their efforts are:
- Ensuring the solution integrates with other solutions,
- Getting the right data to feed into the system and
- Identifying the right solution that meets our needs.
This clearly indicates an inward focus where identifying and defining needs of multiple stakeholders is not in the top 3 areas HR is thinking about. In the changing and fast evolving HR technology and business context, HR leaders will have to thus quickly realign and reassess these priorities. We believe that by focusing on their internal customers and stakeholders, HR will be able to drive the business benefit and thus be able to perform a more strategic role using the HR data generated by HR technology solutions.
While this inward focus is evident, HR leaders expect HR technology to be a strategic enabler and a way to create unique and integrated employee experience. This indicates that HR is possibly struggling to convert the strategic intent into specific actions they need to undertake for the strategic value to be unlocked.
Is HR Technology helping?
While HR seems to be focused on solving their internal challenges using HR technology across organizational size, the subsequent analysis reveals that it is able to deliver on that promise in smaller organizations, as compared to mid and large organizations. While most smaller organizations HR agree that HR technology has helped them to reduce HR workload, in mid and large size organizations we see a mixed picture where HR technology has increased workload. This could mean that with HR technology in place mid and large size organizations are expecting more from the HR professionals beyond the transactions, which is a good sign for the HR fraternity.
The curious case of the unsatisfied buyer
While companies are investing in HR technology, it appears from our data that the HR buyer is not always very happy with the technology solution. In light of the above data, when HR is largely focused on solving their process problems, it is expected that the software meets those expectations. However, it appears that except Payroll and Time and attendance, most other HR technology solutions come short.
This could possibly mean that beyond these applications where “employee experience” is not a major factor or is fairly “standardized” across industries, companies are struggling to manage HR and employee expectations from HR technology solutions. When one looks at this data with another data in this report, in which HR is not considering all stakeholders in the decision making, it becomes clear why HR is not happy with the solution provided by the technology vendor.
The emerging technologies
In this dataset, we see that smaller organizations are more willing and able to experiment with the emerging technologies of artificial intelligence, Machine learning, robotics and chatbots. This is no surprise as smaller organizations are likely to have the necessary autonomy and nimbleness to experiment with these solutions.
This also tells us that if HR technology vendors are looking to onboard mid or large size customers on these technologies, they will have to invest a significant amount of time in educating various stakeholders in the decision process. It is interesting that in this dataset we did not find any mid or large-sized organizations which have adopted to chatbots as yet. We do see a common ground in People Analytics where companies irrespective of their size are in the process of exploring and deploying People Analytics solutions.
What would HR like to see?
HR leaders are looking at a wide array of solutions to emerge in the HR technology landscape, which helps them to solve specific business problems.
Some of the solutions that HR leaders are looking for in the HR technology market are:
- Predictive analytics of attrition
- Platform to connect with freelancers
- Fully integrated recruitment solution
- Cross-functional collaboration tools
- AI-based chatbots
- Compensation and benefits solutions powered by AI and ML
- Succession Management
This indicates that HR technology solution providers have a lot of white spaces in the Indian market, while also indicating that the ecosystem needs to educate HR professionals about solutions available in the market. With more than 2000 HR Technology solutions available globally and an estimated 700 plus in India, it’s extremely difficult for HR technology buyers to be aware of everything. In this extremely crowded HR technology market, the solution providers have to ensure they use effective marketing strategies to reach their target audience.
Changing roles and Skills
The top 3 roles that HR leaders believe are being impacted by the use of HR technology are:
- HR Operations,
- Sourcing and Selection and
- People Analytics.
The least affected roles are:
- HR Business Partner,
- Learning and
- In this, we expect the role of HR Business Partner to be increasingly redefined by technology in near future in ways which move away from process compliance to insight driven interventions.
- While technology might eliminate certain tasks and roles within HR, the leaders believe it will also create newer tasks and roles.
The top 3 roles they believe technology will shape in the near future are:
- HR Digitization Expert,
- People Analytics Expert and
- Employer Branding Expert.
We believe all these roles will have technological acumen as the key skills required and would enable organizations to drive higher value from their technological investments.
In these changing roles, HR leaders believe the top 3 skills required to stay relevant are:
- Design Thinking,
- Workplace Collaboration and
- People analytics
We notice that all these new skills require cognitive human processes, thus indicating that HR leaders expect to leave the mundane to technology while engaging with creative processes themselves. It is interesting to note that Always and Anywhere Learning System and Organization Design also come close to the top 3, while Social Media Marketing and Holistic Performance Management are relegated to the bottom.
The vision for the future
HR leaders expect technology to eventually take up most of the mundane transactional part, while they focus on strategic interventions based on predictive analytical solutions deployed. They expect the emerging technologies like artificial intelligence, machine learning, and robotics to be deployed in HR to achieve this vision. The HR leaders are very clear that these solutions will come into existence to create a unique and seamless employee experience across various HR processes throughout the employee life cycle.
We see that HR in India is at crossroads. While they are currently discharging their duties which appear to be partially technology enabled and largely transactional in nature, they are clearly focused on the future and possibilities in the near future with the use of technology. The HR leaders are trying to make right technological investments in their journey to transform HR function aiming to improve the overall employee experience and strategic value delivered. This presents a very dynamic and encouraging marketplace for HR technology buyers and solution providers.