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The digital evolution in HR management

Digitization in human resources management

The HR department is also affected by digital change

Estimated reading time: 5 minutes
What is this article about?

“Digital transformation in HR management”, ‘HR 4.0’, ‘digitalization of HR processes’, ‘HR department of the future’, ‘smart HRM’, ‘workplace of tomorrow’, etc. - all these terms make it clear that HR is undergoing a digital transformation. HR departments in a wide range of organizations are asking themselves the same questions:

What does this mean specifically for our organization?

What HR processes do we actually have and where is digitalization worthwhile?

What are the basic steps to follow?

Who can we turn to if we need support?

In this blog post, we deal with precisely these questions. Based on our experience as a management consultancy with a focus on digitalization and process management, we will find answers for you.

These will help you to classify the terms mentioned. You will understand which steps make sense for your company and how you can receive support for your digitalization project.

But before we go into the problems and solutions described, we will first clarify a few basics about the background to digitalization in HR management.

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Digitization in HR processes

Why are HR processes suitable for digitalization?

The digital transformation has been occupying HR departments in many organizations for several years now. Since the coronavirus pandemic at the latest, it has become clear that the topic cannot be treated as a peripheral issue. It must move to the center of HR activities.

Many HR processes are recurring, rule-based and time-consuming. This begins with the creation of contracts and extends to the recording of working hours and the sending of employment references. Such processes are very well suited to digitization. In addition, there are often a large number of internal and external interfaces, e.g. to other specialist departments or HR agencies. Interface management also benefits from digitalization.

Advantages of digitalization in HR management

What are the advantages and potentials of digitization?

The advantages and potential of digitalization are obvious. If mainly administrative and routine work processes are standardized and automated, considerable monetary and time savings can be achieved. This reduces the time spent on individual tasks and allows employees to focus on other, more complex activities. As a result, the HR department, for example, has the opportunity to place employees at the center of its attention. It can act more strategically and in an advisory capacity instead of spending time on administrative activities. Topics such as HR development can be dealt with more intensively and the role as an interface to managers can be better fulfilled.

At the same time, employees are not unnecessarily distracted from their actual core tasks, for example thanks to digitally streamlined vacation requests. Their workload is reduced and the employee experience is sustainably improved.

Furthermore, the digitalization of HR can improve collaboration across locations by harmonizing the IT landscape and standardizing processes. One key finding from the coronavirus pandemic for HR management is that companies with largely digitalized processes coped with the crisis more easily than those that were just starting out. This has once again highlighted the need to digitalize human resource management (HRM).

Various digital processes in the HR area

What HR processes are there?

Digital transformation therefore makes HR management more efficient, effective and flexible. But what is the approach to digitalization in HR? To answer this question, it is helpful to know which HR processes generally exist in a company.

HR processes are often divided into three areas: Controlling HR processes, Operational HR processes and Service HR processes (see figure below). Each area is in turn divided into different HR processes. These range from HR policy and strategy, HR planning and recruitment to HR administration and service.

A HR process also consists of different tasks and workflows. Overall, all HR processes contribute to varying degrees to the added value of HR management and therefore directly or indirectly to the added value of the entire organization.

What HR processes are there?
Over 80% of HR managers surveyed in Germany rate the digital transformation in HR as positive or very positive.
Statista 2022
Survey on digitalization in the HR sector

The LEITWERK approach
Procedure for the digitalization of HR processes

We now have an understanding of HR processes and the potential of digitalizing HR management. What steps are now necessary to digitalize HR processes?

1. Step 06

Determining the organization's overarching digitalization strategy

  • Determining the organization's overarching digitalization strategy

    First of all, it is essential to know the overarching digitalization strategy of the entire organization and to align the transformation in HR accordingly. To this end, all relevant information (e.g. fields of action, roadmap and goals) of the overarching digitalization strategy is obtained from the responsible persons. You can find out more about digitalization strategies in our blog post.

  • Determining the current status of HR management

    Next, all HR processes and tasks that take place in the company are listed. As many HR departments are in a kind of transitional stage between outdated files and innovative tools, it is then checked whether and to what extent the existing HR processes are already digitalized and which tools are already in use. The IT department should also be involved here in order to assess the error-proneness of existing software. If the required skills cannot be covered internally, it is advisable to call in external experts for advice and support at this point at the latest.

  • Identification of starting points for digitization

    Once the existing HR processes in the company and their degree of digitalization are known, the next step is to consider which of them should be (further) digitalized and to what extent. It is important to proceed in a targeted manner and, in particular, to digitalize those HR processes where the most benefits can be achieved. The following questions can help with this:

    • Is the (sub)process very time-consuming?
    • Does digitalization of the (sub)process lead to quick wins?
    • Does the (sub)process have many standardized, manual and repetitive activities?
    • Does the (sub)process tie up a lot of resources and is it heavily interfaced?
    • Is the (sub)process inefficient?

    In many cases, digitalization is particularly worthwhile for HR processes where one or more of these questions can be answered in the affirmative. Common examples include contract creation, working time recording, payroll accounting or the maintenance of HR files.

  • Definition of requirements for the new, digital HR processes and tools

    Once it has been decided which HR processes are to be digitalized and to what extent, the objectives and requirements for the new, digital HR processes (target processes) and tools are defined. As personal and confidential data plays a major role in the HR department, it makes sense to pay attention to certain security and data protection standards as well as sufficient stability when selecting tools. Here you will find an overview of other useful requirements for an HR tool. In this step, it is essential to define the requirements in such a way that they correspond to the overarching digitalization strategy of the entire organization.

  • Start of implementation

    Once the requirements have been defined and one or more suitable tools have been selected, the implementation and introduction of the new, digital HR processes begins. This includes migrating the data to the new system. Even if this task is usually only required once, it is important to allow sufficient time. In this step, it is also necessary to regularly review and optimize the efficiency of the digital HR processes and tools. If necessary, previously defined requirements are revised again.

  • Establishment of accompanying change management

    As with other change projects, it is essential to establish continuous, accompanying change management right from the start - i.e. from the first step - in order to ensure the success of the digitalization project. At the same time, it is important to clearly highlight the reasons for and benefits of the automated processes for the company and for individual employees and to empower the workforce to use the new tool for specific target groups.

    Managers should clearly demonstrate their willingness to embrace digital innovations, motivate and inspire their employees and thus set a good example and role model. After all, digitalization in HR management will only be successful if the new processes are then put into practice by the workforce. (You can read more about change management in this blog post).

Procedure for the digitalization of HR processes

Did you like the overviews in this article?

You can download all the diagrams here free of charge!

Do you need support with the digitalization of HR processes?

Feel free to contact us if you need support with the digitalization of HR processes.

From the harmonization and standardization of HR processes in a German OEM to the digitalization of HR qualification - our consultants have the necessary experience and qualifications to shape the digital transformation in your HR department together with you.

We are also a certified Personio partner and can therefore support you in your decisions with comprehensive expertise in the field of HR software.

  • Certified Personio Partner
Do you have questions on this topic or are you interested in a consulting service?
Feel free to contact us!
Sebastian Linder - LEITWERK Consulting
Your contact person
Sebastian Linder
+49 89 189 235 96
sebastian.linder@leitwerk-consulting.com
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