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The workplace no longer conforms to the traditional identity it once had. With hybrid working, AI technology and employee needs constantly evolving, the idea of HR transformation has progressed quickly from a post-COVID pipe dream to a business necessity.
Rather than serving as support, the HR function must be reimagined as a key strategic partner. A greater priority towards people strategy, processes and technology are central to business success.
But there is still uncertainty when it comes to HR transformation and how to navigate the pressure of adapting to a contemporary and innovative workplace.
According to the Deloitte 2023 Global Human Capital Trends survey, the vast majority of business leaders (87%) believe that developing the right workplace model is important or very important to their organisation’s success. Yet only 24% of leaders surveyed feel that their organisation is truly ready to address this trend.
So how do you prepare, and what can be expected?
What is HR transformation?
HR transformation describes a wide-sweeping evolution of the HR function. Instead of focusing on minor improvements, HR transformation looks to adapt its structure, service delivery, talent and technology to support the overall company and its objectives.
For business leaders, it's about empowering HR to implement a strategy that drives more impact for key stakeholders. While typical HR functions such as workforce planning and performance management have always been key responsibilities, HR transformation consultants and HR practitioners in general must leverage analytical and consultative skills to provide insight and greater direction for the business.
Why prioritise HR transformation?
From cost pressures to hybrid working models, labour shortages and fast-evolving employee expectations, every business is facing the same challenges.
For leaders, HR transformation presents an opportunity to outpace competitors, while taking no action could leave a company at risk of falling behind, losing out on talent and facing a plummet in employee engagement.
When carefully implemented, HR transformation can:
- Transform HR from a tactical function into strategic advisors and visionaries that become key players in shaping the future of the business.
- Unlock a strong talent management strategy to attract and retain talent that aligns with the company’s goals.
- Improve productivity through tech-enabled solutions and skill-based strategies.
- Increase employee satisfaction by empowering leaders to retire obsolete rules and embrace new ways of thinking, providing people with choice and agency.
- Provide analytical insight to determine how work should be done.
The rise of HR transformation consultants
As attractive as the benefits of HR transformation are, having the right people onboard to instigate the change is crucial. If there is no existing internal HR function, or a lack of finance to build one, look to external HR consultants and outsourced HR to assess your current HR function and the transformation it may require.
Roles within the HR department are constantly evolving, and positions such as HR Business Partner can be integral to informing and implementing your HR strategy. With the employee-employer dynamic constantly evolving, HR teams need the skills to advise and strategise with business leaders with regards to a new working model suitable for the purposes of a modern workplace.
Similarly, HR leaders at the forefront of HR transformation must be able to identify and leverage technologies and talent analytics to help inform workforce strategies. HR transformation requires experts with the skill to innovate processes and ultimately help business leaders make faster, smarter decisions.
Steps to take for HR transformation
Of course, it’s not just up to the HR department or agency to enact HR transformation. Support is needed from all avenues of the business for an impactful strategy to succeed. Here are some steps to consider:
1. Involve your leaders
If your future HR is going to be more strategic and involved with your leaders, seek their ideas and feedback. Include members of the C-suite in the process from the start and ensure your approach aligns with their priorities.
2. Prioritise people
Be transparent and approach your employees with the plan for the HR transformation. Get everyone comfortable with the new role HR will play at the company and what the process will entail. Guide them through the changes, why it’s happening, and keep everyone engaged in delivering a successful transformation.
3. Set goals
By setting a clear objective, it’ll be easier to develop a plan to achieve it. What do you want the outcomes of the HR transformation to be? Whether to increase performance levels or optimise growth, set these goals with measurable metrics and the steps required to fulfil the vision.
4. Adopt the right technology
Technology and software are key to enabling change and ensuring a smooth transformation process. Consider new categories and solutions that can:
- Automate and streamline processes
- Provide leaders with up-to-date data to make informed HR decisions
- Match ideal candidates with specific jobs using AI
- Help HR meet diversity and inclusion goals.