HR In The Digital Age: The 6 Stages Of Transformation

Irani Srivastava Roy Dec 11, 2023

Over the last decade, digitalisation has touched every aspect of the corporate world, enabling higher productivity and efficiency through automation and data-driven insights.

Ask anyone in any leading organisation’s human resources, operations, finance, information technology, or marketing function about what tools they use at work, and they’ll almost certainly utter the names of widely known digital platforms. Prod further and ask why such software is needed, and the standard response will be that they have significantly improved data availability, insights and clarity to enable swift decision making.

Tools such as email, messaging platforms, and office suites have been around for decades. However, over the past 4-5 years, the emergence of artificial intelligence platforms has significantly transformed how organisations work. And generative AI – which truly arrived late last year with the entry of ChatGPT promises to take organisations' productivity to never-seen-before heights. What remains to be seen is the way these tools are utilised and deployed for productivity, performance and cultural solves.

In the HR function, digital tools can enable automation of tasks, thereby reducing the amount of time spent by them on repetitive tasks. HR teams, which were long thought to be immune to technological disruption – due to their employee-facing interpersonal roles – widely started using tech-enabled tools in the last decade for several tasks, such as screening candidates, streamlining recruitment and keeping employees engaged.

Early uses of technology in HR

In the last decade, most HR departments began using simple digital tools to parse through thousands of resumes. These tools helped shortlist candidates much more quickly than before.

A recruiter who wanted to hire someone for a position that demanded an MBA in marketing could instruct such software to shortlist all resumes that contained the keywords ‘MBA in marketing’. This feature was a godsend for talent acquisition teams that faced the task of manually sifting through thousands of resumes daily. Though innovative in its time, the entry of AI-powered tools revealed the limitations of such parsing software.

The transformation from digital to 1st generation AI saw advancements in concepts like talent marketplace, learning recommendations and predictive career paths. Since HR began using AI tools that use neural networks, many recruitment processes have now become much more automated. Through gamified tests, AI often evaluates prospective candidates’ skill levels even before HR interacts with such employees. Used cases of prediction of success in a particular role during shortlisting is also being used by several organisations that hire at scale. Some organisations have made majority of the recruitment process till a final interview with a human recruiter and manager, completely AI-driven.

Availability of AI-powered sentiment analysis can be used to gauge employees’ current sentiments and can determine whether employees are happy or unhappy in their current roles. Such tools are also powerful enough to predict whether an employee is considering leaving an organisation. Armed with such foresight, HR teams, along with the people managers can intervene in time to retain and engage their star employees.

Today, thanks to the vast amounts of data being generated and giant leaps in computing power, HR teams have access to tools that make it easier than ever before to recruit the right person for the right job.

Data and the cloud’s computational powers

The vast volume of employee data being generated, combined with the unprecedented processing power of the cloud, are giving organisations tremendous insights into how their employees and processes work. Today, talent teams in HR use employee data to identify the skills and traits of their most productive employees. Then using such data, they determine what qualifications prospective employees should have. Hence, using data-driven insights, human resources teams are also equipped to search for the best-suited skills for a particular role.

AI can also make the hiring process much more objective i.e., free from bias. While human recruiters often have unconscious biases that tinge their hiring decisions, an AI model – especially one trained on high-quality data – will be free from such biases. Hence by using AI, firms are hiring the best person for the job, regardless of a person's gender, sexual orientation, race, religion, or personal identity. Data is also being used by organisations to set and meet diversity targets. However, use of AI also calls for a watch for bias depending on the data that the AI actually learns from. This is overcome through cloud-based data which is not restricted to one organisation but industry wide data.

Performance evaluation using HR Software

AI tools can also play an important role in evaluating employees’ performance objectively. The advantage of such software stems from its ability to collect data from disparate sources to build a cohesive performance profile of an employee. Such a profile, when combined with feedback from their managers, co-workers, clients, and others, does a good job in ensuring that vital performance metrics aren't overlooked.

Some organisations have also deployed AI-powered chatbots that appraise employees of their performance, offer coaching and advice, and suggest areas that merit improvement. Not just this, AI predicts the “stretch assignment’ an individual should take to be able to grow in their career.

Finally, the long shadow of the pandemic, which has led to an increase in the gig economy and the rise of remote work, has forced HR departments to adapt to a new dynamic of digitalisation. To succeed in this new dynamic, HR teams are turning to digital technology to solve problems that needed much more human intervention earlier.

Recruiting in the era of gig economy and remote work

The gig economy and remote work are here to stay. HR teams that can leverage gig economy workers and offer remote work to those who need it, stand a good chance of recruiting the best talent.

Onboarding gig economy workers’ demands that the onboarding process be streamlined. As gig economy workers must be hired quickly, HR teams need to speedily set clear expectations and offer relevant training and support to such workers. To this end, HR teams often hire workers virtually and offer them training online before onboarding.

HR teams are also increasingly adopting platforms that let teams collaborate remotely. As such platforms allow workers to share screens and files, and serve as places where productive discussions are held, they make remote work easy. Today, countless teams whose members are in different parts of the world are working cohesively, thanks to such platforms. Inducting not just gig workers but regular employees through metaverse blurs the boundaries of location and physical presence to be able to experience what the organization has to offer.

Technology will continue to reshape how organisations work. As more generative AI use cases emerge, it will invariably find its way into more HR processes. Generative AI may reshape the way HR teams recruit, develop, engage and retain talent, not through standard processes for all but hyper personalising experience to individual employees’ expectation, thereby creating a engaged workforce with relevant skills to help the individual and in turn the organisation grow. Other promising technologies, including the virtual worlds of the metaverse, stand to transform how teams interact, collaborate and innovate, blurring possible geographical boundaries. People who live in different parts of the world, may work, and play together while immersed in life-like virtual worlds. Digitisation, and the evolving world of AI may revolutionise the way HR functions, to say the least. Soon, the only limits to digitalisation of processes will be the skills of the people using them.