What is Digital HR And Why is it Important

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Digital HR is just one among many business trends fueled by rapid advancements in technology. As a business owner, you may also be wondering – is digital HR worth the investment?

Well, to answer this question, we need to understand what digital HR is in the first place.

Below, we’ll try to define HR and introduce you to its benefits. Believe it or not, but digital HR is a must for any company. Find out why below!

What Is Digital HR?

Digital HR refers to the incorporation of digital technology into a company’s Human Resources process. The “digitization” of a business’ HR may be performed in two ways:

  • Transformation of the entire HR workflow, when the company turns as many of its HR processes into digital form as possible.
  • Transformation of specific processes, e.g. when the company switches to virtual and remote interviews and leaves everything else untouched.

HR expert Dave Ulrich writes that digital HR involves four phases.

  • Efficiency, where companies invest in technology platforms to make their HR process more efficient.
  • Innovation, where companies come up with new, innovative tools and methods to streamline the management of HR.
  • Information, where companies start leveraging information and come up with data-driven insights into the current state of HR and how it can be made more optimized.
  • Connection, where the company encourages employee connection through entertainment, social networks, and other digital tools.

These days, digital HR is very tightly connected with advanced technologies like machine learning algorithms or HR analytics. Machine learning and artificial intelligence enjoy particular popularity thanks to the wide availability of computational resources.

Pretty much any aspect of a company’s HR department may be altered and optimized with digital technology. But when it comes to the “how” – how digital HR will be precisely implemented – each company may and should come up with unique solutions that will perfectly suit the internal environment and established workflows in its HR department.

Benefits Of Digital HR And How It Can Help Your Business

What is Digital HR & Why is it Important

If your company’s HR workflow still entirely depends on pen and paper, then switching to automation and digital technology is obviously going to require considerable investment. So why would you want to dedicate tens of thousands of dollars to incorporate more technology in your HR department?

Well, here’s what digital HR allows your company to achieve.

1. Technology makes HR processes more efficient

First and foremost, digitization will make your HR processes more efficient.

For example, artificial intelligence and machine learning could make it easier for HR experts to screen out applicants. Although training AI models requires considerable resources, in the long term, they could help your HR professionals avoid wasting hours on sifting through thousands of résumés.

Aside from that, incorporating more technology into your HR department can allow you to prevent frustration among applicants. If your application process is not intuitive and overcomplicated, then it’s highly likely that high-quality applicants will get annoyed and won’t even bother to complete the application.

These are just two ways of streamlining HR processes with technology – you can come up with many more.

2. Digital HR is more data-driven

Data is crucial for making business decisions, so why not make HR more data-driven as well? If you collect and analyze data, your decisions will be based on logical observations rather than intuition. Real-world data allows you to more objectively assess the current state of your HR processes and implement more effective strategies aimed at their improvement.

Aside from that, data allows you to benchmark performance indicators such as average cost per hire. Data lets HR experts to set goals and compare results against these goals as well. Furthermore, data will enable HR analysts to identify the “why” behind successes and failures in your HR department.

3. Automation frees time for HR experts

Processing of payroll and pre-screening applicants requires hours and hours of mental investment. Not only are these processes tedious, but they also take precious time which HR experts may have otherwise spent more efficiently.

Simple and repetitive tasks – like data entry or applicant shortlisting – may be relatively easily automated, enabling HR experts to focus on more useful problems that can’t be solved via technology as easily. Most importantly, by taking trivial problems out of the equation, digital HR allows professionals to dedicate more time to holistic issues.

4. Digital HR allows your business to adapt to changing trends

To explain this point, let’s have a look at how the COVID-19 pandemic has impacted businesses when it comes to technology and automation.

The outbreak of the pandemic and the ensuing lockdown forced businesses around the world to switch to remote work. Needless to say, to be able to efficiently communicate without regular physical contact, companies had to adopt a wide range of digital solutions, such as video conferencing and collaboration tools.

What do you think, which companies have been better prepared for this sudden shift – companies that had already established digital workflows, or those that had neglected the potential benefits of automation and technology?

The answer is clear – companies that had already switched to digital processes had an easier time adapting to the new logic of communication.

As for companies that hadn’t made use of automation – well, they had to quickly reshape their workflow to adapt to the situation.

This is merely one example, but it perfectly demonstrates how digital HR could allow you to become better-adapted to changing market trends.

Aside from that, social networks are becoming more and more popular among HR experts and applicants, and not taking advantage of them would significantly undermine your ability to identify and attract high-quality talent.

5. Digital HR improves employee experience

Finally, the line between employees’ personal and professional lives has become very blurred in the 21st century, especially after the outbreak of the coronavirus pandemic. Streamlining HR processes for employees is thus crucial for improving their user experience. Satisfying your employees is no less important than satisfying clients.

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