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Successful Digital Transformation Is The Key Agenda For HCM

by Vijay Sinha, - Sr. VP-HR, JSW Energy August-2018

Continuing to evolve itself into a strategic function, new age HR is being referred to as HCM (Human Capital Management) which is building capability for the organizations to deal with VUCA world. Starting with Personnel and Administration function to handle personnel welfare and administration, the department fizzled out to emerge as HR function which managed employees’ motivation and developed performance metrics for the employees. From administering wages and welfare of workers during Industrial revolution, Personnel & Administration function evolved into a more dynamic function known as Human Resource Management which focussed on skill enhancement of talents and linking organizational objectives with individual KRA’s. With increasing demand to improve productivity in order to remain competitive in a highly volatile market, the evolution of Human Capital Management acquired significant importance and evolved as holistic talent management process to positively impact the productivity and profitability of an organization. Evolution of HR from a support function to a strategic business partner is yet not fully embedded in the work culture of the organizations and HR needs to work closely with different levels in the organization and create several examples as well as leverage digital platform to demonstrate its’ quantifiable contributions to the P&L.

With increasing digitization and disruptive technologies, the world of HR is changing fast. The need to harness digital technology requires HR to gain more technical expertise. Digitization of payroll processes and leveraging IT systems to deal with recruitment has helped to free up HR department from time consuming manual processes which in turn benefitted HR to focus more on strategic thinking and gain better insight with the help of Human Capital analytics. Analytics drive good decision making and engagement drives a better bottom line.

Traditional HR practices are becoming extinct and are no longer effective in motivating young employees. With increasingly advanced technologies, traditional approaches are giving way to more systematic and decentralized approaches. Moving from hierarchical career path to well-defined lattice career growth, Talent management today is more individualized with focus on personalised rewards reflecting global culture and multigenerations. Ability to manage generational differences among the workforce has become preferred leadership style.

Agility has become one of the most essential characteristics of a successful organization at the time of continuously changing business paradigm and increasing business uncertainties. Creating a workforce which is able to manage volatility and handle change effectively remains a good measure of effective Human Capital Management. 

With the separation of traditionalists as well as baby boomers and increasing composition of millennials in the work force; use of latest technology & social media platform is rapidly growing among the workforce. However, HR is still lagging behind in the use of digital platform. Need to switch over to web based solutions&mobile applicationsis felt across businesses in view of the changing work patterns &behaviours. Millennials are not happy with annual assessments or feedback and are looking for more frequent feedback which can be a reality only in the event managers are enabled to do performance assessment on mobile applications or use cloud based applications. Similarly, use of social media in employer branding and recruitment is becoming popular and is proving effective to attract, retain and engage talents in digital world. There is a strong need to strengthen current HRIT landscape and create an IT architecture which is essential for driving digitization across HR processes.

In my recent experience of setting up a very large shared services for five business verticals of the Group for three functions viz. Finance & Accounts, HR & Commercial. I realized that implementing an effective Shared Services Centre to handle employee’s life cycle operations is a very powerful intervention which enables organization to respond to employees in a faster, stronger and smarter way. At the same time, it frees up middle and senior managers to move from day to day operations to handle tactical or strategic contribution to the organization. Besides, standardization of processes across geography helps large businesses to manage them effectively. Another futuristic advantage of this intervention is the ease to move to any new platform smoothly if required dueto changes in technologies& processes besides seamless integration of a new business without much trouble.

The Human Capital Management strategy must take into account the rapid changes which are impacting businesses due to disruptive technologies as well as Social & Geo political changes. While impact of BREXIT would be felt by many corporates worldwide, many other political developments in one part of the world will also continue to impact businesses in other part of the world. Though millennials and gen X constitute around 56% of the workforce, the remaining employees who belong to different generations viz. baby boomers & traditionalists need to catch up fast with the digital change. The challenge before HR is to drive this transformation and orient people to embrace digital changes. One can build ultra-modern infrastructure & hardware but the real success would lie in quick adoption of technology from top to bottom and demonstration by the top management will speed up the  transformation. HR has the biggest task to instil the digital DNA among its’ rank and file to lead, engage & sustain. Building organization wide communication strategy to connect with employees shall be very important intervention that will drive a successful HCM agenda. The two way communication module will definitely help achieve business objective with speed and transparency.