HR news this week: Digital transformation and outsourced workers

This week in HR news, the effectiveness of digital transformation has been put under the spotlight. Is investment in tech worth it? Meanwhile, leaders are looking offshore for workers due to the work-from-home craze, and there’s a disconnect between leaders and their HR departments.

How to nail digital transformation

As reported by the Harvard Business Review (HBR), some leaders are wondering if the push for digital transformation in their organisation has been worth the costs.

According to the article, around 89 per cent of large companies have digital and artificial intelligence (AI) transformation underway. However, just 31 per cent have seen a lift in revenue, and just 25 per cent have hit their expected savings costs.

The issue with implementing these transformations is that there is little data to rely on that suggests the benefits are worth it. However, there is still evidence if leaders are prepared to dig deep to find it.

According to HBR, there are plenty of benefits to be made, as long as the effort is put in to do so. Blindly investing in tech will not automatically generate revenue, and there should still be care taken to approach implementation correctly.

HBR listed some ways to ensure it is done smart:

• Creating ambitious and focused transformation roadmaps. This requires business leaders to align their efforts on specific domains (e.g., journeys or processes) that matter to customers and generate significant value.
• Building a quality digital talent bench. Leaders prioritise creating an environment that attracts top-notch engineers and allows them to thrive (e.g., tailored career tracks, autonomy).
• An operating model where hundreds of small cross-functional “pods” made up of business, engineering, and resources from control functions are mobilised against priority solutions. A single journey (or product) owner responsible for the end-to-end experience.
• A distributed technology environment and modern software engineering practices to allow the entire organisation – not just IT – to develop digital and AI-based solutions.
• Data products and modern data architecture that make it easy for different parts of the organisation to consume data for their own applications.
• Change management to ensures digital solutions are adopted and can scale by making them easy to use and reuse across the enterprise.

HBR concluded: “To pull this off, the entire organisation must be able to deliver constant digital innovation, which requires a holistic set of capabilities. The effort is significant, but so is the reward.”

C-suite/HR disconnect

As seen in HR Magazine, it’s reported that 50 per cent of C-suite leaders admit they don’t know how to effectively utilise their HR department.

The disconnect is clear, as 66 per cent of HR professionals want to play a more strategic role at their organisation.

The top barriers preventing this are too much administrative and process-driven work and poor collaboration with their senior leadership team.

“In reality, HR’s role is about helping businesses to make sure their most valuable asset, their people, are empowered to do their job, be productive and help the organisation succeed,” said Pete Cooper, director of people, partners and analytics at Personio.

“Now, armed with the tools to measure and assess engagement and culture, and freed from its process-driven functions, HR has never been in a better place to be able to step up and take the lead as a key driver of business success.”

Sixty-seven per cent of executives want to gain a better understanding of their HR department, and 75 per cent believe it would be beneficial for HR to contribute more.

Leaders may benefit by giving HR a seat at the decision-making table. This could reduce the disconnect and give the people more of a voice.

Outsourced WFH

As discussed by the Australian Financial Review (AFR), employees working from home may create issues for themselves as businesses look to outsource.

Public sector workers are the latest to be granted unlimited work-from-home days, with backlash already coming to a head over CBD businesses.

Now, AFR argues that leaders may take this opportunity to outsource cheaper workers in the Philippines.

“We know from history that people look to more offshoring options [when costs rise],” said Bob Easton, chief executive of Probe CX.

“I think a lot of companies will go down the path.”