Generally, the work environment is changing thanks to the unpredictable economy, technological upgrades, and demographic changes. This transformation is progressive; thus, every department must follow suit- including Human Capital Management- otherwise known as Human Resource or HR.
HR is a vital tool for maintaining a steady workforce which translates into achieving business goals. Therefore, a change in this department inevitably affects the business and triggers the same in others. Consequently, it becomes crucial to understand what HR transformation means for individual business models.
What is HR Transformation?
The HR function encompasses employee-centric duties, including talent management, establishing compensation structures, training and development of employees’ workplace safety, and legal and regulatory compliance. That means that HR transformation is the evolution of these functions to integrate service delivery, talent, and technology, such as adopting artificial intelligence and emerging tech for better business value.
HR transformation redesigns the structure and strategies adopted by the HR function. The improvements often occur dramatically instead of incrementally since the HR department provides the most support for the broader organization’s strategic objectives.
What are the Motivators of HR Transformation?
There is certainly no doubt that any business that wishes to align with the ever-changing business environment has to adopt HR transformation at some point as its plan of action. In this day and age, successful HR transformation must motivate an equal positive change in strategic impact and operational excellence.
The primary drivers of this change for larger organizations include the following factors:
- Elimination of redundant HR activities and procedures- Automating repetitive tasks helps businesses save time and money.
- Improved employee experience- the transformation redirects employees’ mindset and gives them more time to focus on value-added work.
- Better efficiency and data integrity- adopting technology accelerates activities and empowers employees to be more productive while promoting output quality.
- Empowering the HR function to be an enabler instead of an administrator- gives the HR teams the necessary tools to train and guide employees and deal with challenges in the workplace.
These drivers usually intend to make the business or organization more impactful in leadership, performance management, and engagement. Nevertheless, the success of the Human resource department is gauged by its ability to generate substantial turnover, engagement, and career mobility.
Why is HR Transformation Important?
In this age of digitization, HR transformation is a necessity rather than a choice. With this change, businesses can stay relevant in the rapidly changing landscape, irrespective of their industry. HR has a more extensive obligation beyond hiring and making payments in this digital age. Its success promotes the value of human resources, which usually act as the driving force of any business.
The role of an innovative HR executive is to help the organization make meaningful strides by improving the company’s performance. The idea of change stretches back to concepts from other disciplines, including anthropology, psychology, sociology, economics, and organizational development. Thus It is pretty straightforward that the exact change in the HR function triggers both personal and large-scale change.
In a nutshell, organizations need HR transformation to increase the value of their human resources, increase market share, grow in the global markets, reduce costs and motivate the innovation of new products and services.
Common mistakes made during HR transformation
It transcends the internal function of HR to include the external entities that may come from customers and investors. However, the process is sometimes more complex than it sounds. It is usual to make mistakes while implementing HR transformation.
The most common mistake is where a company begins with action before understanding the rationale. For example, making huge adjustments like implementing e-HR or restructuring the department before laying the necessary foundation of putting the business needs front and center is likely to cause more damage than good.
The HR strategy should remain inseparable from the business strategy at whatever point of the transformation.
Other common mistakes include not paying attention to the company’s future needs, using outdated material to inform the change, lack of proper financial planning, and Insufficient technological support.
HR transformation matters because it is the only way to stay in touch with the human capital that drives a business. The HR function should be designed to push for the development of skills and capabilities to trigger, embrace and handle the growth of the business.