HR Leaders today face a dual challenge of doing digital and being digital. They need to drive the digital transformation agenda and re-skilling efforts on one hand while at the same time transforming their own HR function for the future.
I. Doing digital: Leading digital transformation and re-skilling efforts
Digital transformation is expected to create more than $1 trillion of value for companies all over the world and numerous surveys estimate more than 80% of CEOs and Senior Executives running a digitalization initiative or a transformation program in their companies. However, only 5% of these digital transformation programs will ‘achieve or exceed’ desired results. This is because digital transformation like any other change management program is not easy to orchestrate and steer in large corporations. It requires alignment at the top, agility at the middle and mobilization of frontline and can only be possible at scale with active involvement of HR function.
One of the biggest concern of companies running digitalization initiatives is the availability of ‘digital’ talent to meet current and future needs of the organization. It is expected by 2030 companies will typically have more than 70% of workforce comprising of Millennials or Gen Z, majority of them working in data science, behavioural AI etc., about 50% working as full-time staff and more than 33% working from home. On top of that with increasing maturity of AI routine tasks especially in structured and predictable environment can be easily automated and will create huge redundancies. It is critical for HR leaders to assess the skill gap for their organization and define the ‘Future of Work’ in their context:
• What is the skills gap between today’s and future workforce?
• How to utilize hiring, up-skilling and re-deployment to meet future skill requirements?
• What initiatives are needed to align the workspace (e.g., mix of physical and virtual co-working spaces, flexible configurations), workforce (e.g., digital natives, freelancers, gig workers) and work culture (e.g., collaborate, lifelong learning oriented) for the future?
Research by McKinsey and company estimates that globally over 60% of occupations will have at least 30% of their activities that are automatable in future. While less than 5% of these occupations can be 100% automated but more than 80% will have some portion of tasks that become redundant.
So, the real challenge for HR leaders is increase awareness and engagement of the workforce towards digitalization and carry out re-skilling at scale to meet current and future digitalization needs. Ultimately, AI will not replace Humans but rather Humans who can work with AI will replace Humans who cannot!
II. Being digital: Transforming HR operations
Most companies tend to focus their digitalization efforts either on sales & marketing function or supply chain and operations in the beginning to identify high business impact use cases. But, HR too as a function has lot of potential to benefit from digitalization. With the advancement in AI/ ML, new sources of data and advance computing power has revolutionised most of the HR activities. It can help make daily decisions about who we hire, how we deploy them, what teams we put them in, what projects we have them working on and provide a fact-based analysis to support the instinctive decision-making process and also de-bias the overall process. Let’s look at some of the most popular use cases and applications increasingly being adopted in HR function today:
1. Hiring – The ability to find and attract the right talent today is more critical than ever. AI can help analyse data, for example, based on social media activity, connections and posts and can provide relevant job recommendations to target applicants. It can also accelerate the screening and shortlisting process going beyond the standard resume assessing potential applicants’ role specific skills (e.g., by analysing their videos) and also reduce the overall bias while increasing the diversity of the hiring pool.
2. Engagement – AI can help curate personalised learning programs based on employee information skill set, experience, behaviours and learning patterns. It can be used in combination with IoT devices for e.g., health & fitness tracking, attendance & biometric recognition or tracking people interactions (e.g., sociometric badges) and physical movements of course in compliance with individual preferences and regulations around employee data privacy. Companies especially in industrial sectors have also been actively using AR/VR tools for a more engaging and immersive training experience especially for engineers and technicians.
3. Retention –People analytics based on AI can also be utilised for evaluating attrition tendencies in employees. They can analyse for instance most common reasons contributing to employee attrition and then generating score for each employee based on the probability of them quitting their jobs. This can help companies save not only costs but also the time and effort involved in hiring and onboarding process
4. Support – RPA (Robotic Process Automation) bots or AI driven assistants can help automate lot of standard and routine tasks of HR function for example, scheduling meetings with candidates, booking rooms for training sessions or generating employment proof, invitation letters etc. Not only, they can free up time to invest in more meaningful activities (e.g., coaching, development feedback) but also provide a seamless 24x7 service to the employees reducing unnecessary email correspondence
Digitalization is opening new opportunities for HR leaders. The most important thing they can do today to add value to the business is to better understand technology, better push it, and use it to integrate the workforce to the business and get people performing better. At the same time, technology is not a panacea. Its effectiveness depends on designing, implementing and using it to meet a company’s specific needs—and doing so requires a good understanding of technology’s potential while keeping a laser sharp focus on the underlying business need it is trying to address.