Transforming HR into a strategic function: What the CHRO of 2020 should be focused on!
5 June 2018
Did you know that 92% of all surveyed businesses are undergoing digital transformation?
At present, more than 1 in 3 CHROs see legacy IT systems and cultural resistance to change as the top two challenges to delivering Digital Transformation. These roadblocks to transformation are preventing CHROs from shaping their function to a strategic one, with systems and processes still designed for a system of records, rather than a system for managing innovation and offering insights. This is also the result of European enterprises often leveraging a complex set of poorly integrated information systems for employee administration, payroll, talent management, performance management and other HR related processes. However, focusing on legacy IT and disparate systems can be misleading. The first thing that CHROs need to keep in mind is that managing change starts from their department.
Barriers to digital transformation:
Underestimating the high level of cultural resistance to digital transformation in the organisation and underinvesting in managing change can be a major flaw for the DX strategy of the business.
CHROs give more weight to diversity and exponential thinking when they recruit than business leaders do, and this comes on the back of years of expertise and understanding the importance of an inclusive and diverse workforce that can think outside the box. Developing practices that foster and reinforce this can create the conditions to improve new ideas and innovations at a time of fierce competition. In addition, CHROs have an important role in bringing new talent to the organisation through referral programs and by looking at the internal pool of applicants to get the best fit.
It is therefore a critical failure when CHROs end up accepting established practices and KPIs without challenging the HR team to be innovative, in an era of disruption.
That is also the reason why CHROs need to plan ahead and help the business be better prepared and in sync with market dynamics. Any CHRO that wants to transform their function into a strategic partner delivering Digital Transformation needs to rethink and identify the roles that require retraining and development.
Of course, this can be successful only through cooperation and sharing of information with IT and lines of business. The survey shows that only 1 in 4 businesses feel that HR and Business units are perfectly aligned and less than 24% say that IT and HR are well aligned! Therefore, CHROs need to work with IT, not only to address legacy systems, but also to help create a working environment that fosters collaboration and alignment between employees, HR and managers.
We all know that the wave of digital transformation has been putting pressure on businesses right across Europe. But how much do we know about the actual level of impact and the overall reaction to this pressure? In a unique new study, IDC worked together with Cornerstone OnDemand to understand how this is impacting organisations and discovered a range of different strategies being implemented to deal with some of these internal pressures. Whether it’s the availability of talent or recruiting for the age of disruption there are many new challenges facing organisations today.
- Work with the CIO to streamline and integrate information systems to improve workforce transparency, and the ability for HR to predict skill gaps and talent requirements.
- Focus on organisational culture as a key agenda point to address during your meetings with business executives. Think about a set of ‘employee values’ that need to be embraced by leadership.
- Identify the jobs and skills that require (re)training and development.
- Don’t just look at job requirements and educational background, but also ask your team to assess a candidate’s cultural fit and references as part of the selection process.
- Don’t treat the CIO like a gate keeper, but as a partner or facilitator of the business. Ensure that you assign a ‘process owner’ from the HR department to help optimise HR services for employees.
- Don’t underestimate your ability to improve employee happiness. Driving policies for flexible working, creating opportunities for personal development and mobility, and fostering a feeling of team-spirit improves culture and impacts business performance.