Benefits of Digital Transformation of HRM Function of an Organization

Human beings aren’t perfect and make mistakes. These mistakes on account of the organization could affect their operations in the long run or short run. Employee engagement affects the service level that an individual has to offer to an organization and how much-motivated one feels to work at that place. Higher employee engagement decreases the attrition rate of employees. This could be taken as a holistic view of HR management, as the HR team keeps track of employees’ contribution towards the organization and allocate benefits accordingly in order to enhance employees’ compliance. Keeping track of contributions also means that the HR team is well aware of the current level of skill in the organization and where there is a skill deficiency. Thus the management gets the option of training or recruitment to compensate for skills required in the organization. Since all these are the responsibility of HR management, its efficacy could affect an organization in the long run. So mentioned below are the benefits of digital HR system transformation.

1. No partiality no politics

Group formations are part of any organization, mainly the organizations which are big and have large numbers of employees recruited from different places or recruited to cater to different skills required. For example, taking in a global multinational organization like Google, it has people from different nationalities, all working together. This could ignite favorable conclusions in favor of some people or groups rather than others, a simple word for this could also be due to politics in bureaucratic organizations. Digital HR eliminates the possibility of these conclusions, as the focus of digital HR would be skills, past performance, current performance and forecast future benefits to the organization by a certain employee. Factors like name, background, age, religion, and even personality type won’t make any difference, the only effective key factors would be accountable performance in the past for the type of skill required. The end result would be an evaluation of every employee on the basis of the contribution one makes, instead of the contacts or networking one has.

2. Tracking of every employee’s contribution done in real-time

One of the things that happen in an organization is the annual or semi-annual evaluation of employees by the HR teams. This is the time when employees avoid deviant behaviors and show how much they are contributing towards organizational processes. They try to reach out to HR members and use networking in their favor. Digital HR on the other hand keeps track of employees’ real-time contribution towards the organization, thus management gets to know when an employee is making significant contributions so as to be incentivized or when he/she is deviating from the tasks at hand. This is accomplished by digital HR software maintaining a dashboard of each and every employee of the company, so any employee of the company doesn’t stay anonymous anymore and everyone’s contribution stands accounted for on the employee dashboard.

3. Retention improves

Some people think of employees as not open towards any kind of change that happens in an organization, but that was a bureaucratic period and now we are in an entrepreneurial time-period budding with startups. So when the employees see how much better they are being evaluated, they automatically start contributing more towards the organization. This has the impact of improved retention since the employees know how they are being evaluated, they know what to do to improve that evaluation. This inspires motivation in an employee, now youth won’t be asking the question of how much impact they are making in an organization, they know it.

4. More engagement of employees

As discussed in the above point, employees get the motivation to work when they have the direction to work. So when an employee knows what he/she has to do to have a better evaluation, he/she works to have the best evaluation. This improves employee engagement with the job and also job satisfaction due to the accounted contribution that he/she is making towards the organization. The result is better employee engagement and talent management.

5. Decreased cost of attrition and training of new employees

Improved retention decreases the cost incurred due to attrition as the training and recruitment cost of an employee is saved. Moreover, digital HR works objectively with data analytics so it can easily identify which skill is required in certain departments if the productivity is not up to par. This also makes recruitment of candidates with certain skills as required by organization much simpler. This could result in better pay for employees as the cost of training and recruitment could be used as incentives towards employees, which results in better word of mouth by employees about organizations in corporate and social sectors.

6. Employees get returns for their engagement

One of the problems in an organization is the lack of employee engagement. As employees think that the contribution they are making towards the organization is not going to be incentivized or accounted for, the motivation to contribute to the organization suffers. Online HR software’s real-time updates of employee work and accountability of contribution towards the organization make it easy for employees to be evaluated on the basis of their performance and productivity. This lets employees get returns from the organization for one’s contributions and establishes transparency in the evaluation process.

7. HR Analyst gets the real-time database

HR analyst is the one keeping track of digital HR accounts and sets the baseline for the evaluation of employees. HR analysts collect and study information related to jobs, issues, and costs that affect the organization. All these factors are critical for an organization as it decides how an organization will perform in the near future and how it is handling its cash flows. Through digital HR, the HR analyst gets human resource information that is more objective and in real-time, which helps in better forecast and also explains the state of the current performance of an organization.

8. Increased productivity

In an organization, productivity can suffer due to the lack of a proper skill set. This could be eliminated by digital HR keeping accounts of contributions made by employees and also by monitoring individual departments towards their base target. So, firstly on an individual level employee motivation, engagement, and retention is improved and secondly, it is keeping track of deficiency of any skill within the department of an organization that could be curated through recruitment and training. Thus, digital HR improves individual productivity by an employee and overall productivity by the department of an organization.

9. Training and Compliance

One of the roles of a compliance manager is to conduct periodic internal reviews or audits to ensure that compliance procedures are followed, digital HR improves compliance and decreases deviant behavior since it keeps track of every employee. This also lets complaints be accounted for, evaluated, and investigated as early as possible. This keeps employees up on their toes and neglects deviant behavior at all times. Employees also work to increase productivity to use accountability in their favor, thus increasing their compliance with the rules and norms of an organization.

10. Discrimination decreased and diversity increased

Digital HR induces the evaluation based on performance. This removes the stereotyping and discrimination on any front, focusing on skill and individual contribution towards the organization. Like if an organization is in the recruitment phase for a marketing manager or finance manager, so focus and evaluation would be on past performance and achievements and not on the gender of the candidate. This promotes the meeting of minds on the skill-set front and increases the cultural and gender diversity of an organization.

11. Outsourcing of recruitment possible

When an organization doesn’t have an HR team this could be used in favor of a company by outsourcing their recruitment process. One of the major and notified changes would be the use of a diverse network of outsourced parties. Since these recruitment teams have their core competency in HR recruitment so they can use their own reach to fill in the gap of skill set as required by the organization. So in one way, the myopic view of organizations toward recruitment from a limited number of colleges or locations expands. One more benefit to the organization is that they have a team to account for recruitment, so if the recruitment process is not at a satisfactory level changing the recruitment team completely is possible. This keeps the outsourced recruitment party on their toes to perform at least on par level.

12. Employee queries resolved and satisfactory payroll on an individual basis

In most organizations, we have a major number of employees that are not happy with the pay they get for their contribution. This can be due to unsatisfactory evaluation of some employees, thus contributing to an unsatisfied workforce in organizations with high manpower. Digital HR resolves this issue and the size of the organization is never the constraint. Digital HR through its real-time and accounted contribution of an employee is able to evaluate and incentivize an employee with substantial proof. So employee queries about their payroll and performance evaluation are eliminated with digital HR.

As digital transformation is the motto of this new world, we have to leverage it in our favor, and as we know that workplaces are getting overpopulated so the volume of employees could be a coercive factor in the manual management of employees. Digital HR being an intelligent software package deals with a large employee workforce and provides streamlined data on each and every employee. Online human resource management software with its Artificial Intelligence (AI) caters to employee job satisfaction, job motivation, engagement in the workplace, a diverse working culture, increased productivity, reduced attrition rate, and also reduced cost of recruitment and training of new employees, thus impacting the employee and organization in multiple ways.