What Makes Digital-Savvy CHROs More Successful Than Their Counterparts?
Successful CHROs are the need of the hour. As work and workplaces undergo tectonic shifts at the intersection of economic, technological, and social dynamics, the role of the Chief Human Resources Officer (CHRO) holds more significance at the C-level than ever before. While businesses pursue their digital strategies amidst talent turbulence at hybrid workplaces, the human resources function stands in a bidirectional relationship with technology. While it must adopt digital technologies to modernise its operations, it must also oversee the effective adoption of digital technologies entering the hybrid workplace.
The role of the CHRO in helping the organisation navigate today's business landscape cannot, therefore, be understated. However, according to Gartner, only 40% of CHROs can fulfil their roles today. Understandably so, the CHRO has traditionally focused on people and processes more than technology. However, when digital maturity drives 23% greater profitability and makes businesses 64% more likely to realise their business goals, technology has been infused into workflows and interactions in diverse and complex ways.
In this environment, the CHRO's digital quotient will be a crucial determinant of their success and, consequently, that of the organisation. Here's what it will take for the CHRO to achieve this moment of mutual triumph.
Key success factors (KSF) for CHROs in 2022
The last couple of years has led to significant learning for the CHROs. Dealing with an overnight redefinition of what constitutes the workplace to changing priorities and dynamics in the talent market, CHROs are coming to realise that long-established benchmarks are beginning to either look different or undergoing a change of meaning (think average time in a role, number of employers over a lifetime, and productivity measurement). In 2022, CHROs are focusing on these KSFs:
- Undertaking a holistic outlook towards employee well-being includes improved work-life balance and better mental, financial, and social health.
- Improving D&I metrics and addressing high turnover of diverse employees, especially as 70% of employees seek employers with a strong commitment to diversity.
- Redesigning performance measurement workflows to adapt to the workflows of hybrid models and fostering transparency within the workforce concerning data collection.
- Re-evaluating the efficacy of the traditional Ulrich model and transitioning to an agile HR operating model to support continuous transformation.
- Ensuring that employees accept the tools and rules of the hybrid workplace positively.
Digital is the top priority for CHROs
In light of these emerging priorities, digital technologies have become the CHRO's greatest ally. Today, leading CHROs are turning to digital technologies to realise the following outcomes:
- Running core HR workflows on the cloud is 82% cheaper, 88% more secure, and 86% more productive. Therefore, cloud transformation of HR is a top priority for CHROs.
- Because remote work is here to stay, adopting effective remote productivity solutions (that measure more than just logins and screen time) is on the agenda of 95% CHROs.
- Hybrid workplaces are built on digital-first principles. Measuring employees' satisfaction with their tools of the trade and how they receive a newly implemented solution is an ongoing concern for CHROs.
- The skills requirements of the organisation are evolving rapidly with digital acceleration, and 70% believe that closing the digital skills gap is the task of the HR function. Therefore, CHROs are undertaking a data-driven approach to managing talent supply and demand, upskilling, and workforce planning.
CHRO's success is linked to their digital quotient
To succeed in their role with revised priorities, the CHRO must approach their agenda with a digital-first focus. This involves defining a target state for the HR operating model, staying abreast with how other leaders are deploying digital technologies to pressing challenges and adopting a data-driven strategy to solve problems like retention, diversity, and diagnosing the hybrid workplace. Take a look at these in detail.
Define a target HR operating model
Digitising core HR workflows come with significant financial incentives for the HR function and frees HRBPs for high-impact, strategic initiatives. However, to transition to this state, CHROs must envision how workflows are accomplished in the target state and how this model helps them achieve their outcomes. For example, to what degree will the workflows be automated, how will sensitive data be secured, and can the model be scaled? Adopting modern, cloud-based HR platforms represents a significant opportunity here, as it will free CHROs from the risks and challenges of siloed digitisation.
Encounter challenges with a data-driven approach
Organisations constantly apply Artificial Intelligence (AI) and Machine Learning (ML) to tackle pressing challenges. For example, a sentiment analysis tool that integrates with Microsoft Teams and team chats of various departments is being used by organisations to gain insights into employee satisfaction rates. Similarly, others are leveraging AI to curate personalised learning journeys for their employees. However, 32% of HR leaders say that data quality and volume are critical to the success of AI initiatives and a well-articulated strategy.
These action items indicate that CHROs must bring strong digital expertise to their role. While companies will achieve these outcomes through the board's intervention, the CHRO must spearhead the digital evolution of the organisation's human capital strategy.
Nailing the outcomes of digital initiatives
The HR operating model of the future is built on modern technology paradigms such as data platforms, SaaS solutions, AI, and RPA. At peak maturity, it will leverage technologies like blockchain and AR/VR, which have already entered the Gartner Hype Cycle and are due for mainstream adoption in HR over the next decade. This means that HR transformation will grow increasingly complex from a technical standpoint; the stakes will be higher, and so will investments.
To realise the outcomes of such digital initiatives, the CHRO must form a synergy with the CTO and the CIO and evangelise HR transformation within the organisation's larger digital strategy. In turn, the CHRO will also play a key role in fostering a digital culture, especially as 49% CXOs expect them to empower change management through digital initiatives.
Digitally-savvy CHROs in action
CHROs at leading organisations are already reimagining their people strategy with digital solutions. For example, Volkswagen Commercial Vehicle's CHRO is leveraging a digital platform to let their employees swap work with one from a different role for a limited period to bring flexibility and foster cross-functional skill sets in their organisation. Similarly, the Global Head of Workforce Analytics and HR Strategy at Experian led the creation of an analytics platform to reduce employee turnover by 4% over two years. At National Aviation Services, CHRO Bu Hamdan has implemented a digital HR platform to track 180 KPIs, which help the organisation with improving budgeting, retention, succession planning, and other strategic decisions.
HR departments that function with traditional tools and legacy processes will experience the rising infusion of digital technologies in the workplace as an ambush. However, digitally-savvy CHROs are leveraging technology to drive operational excellence in core HR operations and tackle pressing challenges with it creatively. As hybrid workplaces mature and the digital economy expands, words like culture, inclusivity, and purpose will begin to slip out of the hands of traditional CHROs that resist the influx of digital into the organisation's most valuable assets: its people.