Is Digitalisation Replacing Human Resources?

Perhaps one of the most radically transforming departments in today's organisations is Human Resources. As one of the most critical elements to any business, many modern HR departments have embraced digitalization to enhance the way they approach the key aspects of their work and improve employee engagement.

Now, digital transformation is the key to survival in today's fast-paced digital climate and businesses that embrace digital technologies to engage with new audiences and adopt new revenue making opportunities are the ones who will thrive. In fact, 87% of companies recently surveyed by Capgemini Consulting think that digital transformation is a competitive opportunity. HR is no exception.

According to research from CB Insights, the HR technology industry received a whopping $2 billion in funding in 2015 in a bid to improve tools for recruitment, performance management, learning, wellness, feedback and employee engagement. So, is the digitalization in the process of replacing the traditional HR department as we know it? Before we answer such a question, perhaps we should first take a look how digitisation is changing Human Resources in 4 practical aspects:

1. Digital technologies optimise HR processes

Digital tools and processes have slowly replaced old HR systems and in 2016, this is set to accelerate massively. With a great shift away from traditionally licensed HR software and a move towards more sophisticated and flexible cloud-based systems on the cards, the HR landscape is on the move.

Today, around 150 million people use cloud-based HR systems the world over, and this number will grow rapidly in the year ahead. For example, BambooHR focuses on helping businesses in their transition from tracking employees' information in spreadsheets to managing applicants' information with a personalised software, allowing HR teams to save time and increase efficiency.   Another example is Workable, which focuses on creating a structured interview process to track prospects' progress over time and generate actionable feedback with customised scorecards.

These HR cloud-based solutions are also mobile-friendly, allowing HR personnel to communicate, carry out tasks, and remain productive while on the go. This greater flexibility not only applies to HR staff but also to potential candidates. For example, video interviews allow prospects to record themselves answering a certain set of interview questions on their laptop or mobile device at their best convenience.

2. New ways to source candidates

With the rise of social media platforms like Twitter or LinkedIn and an abundance of information available online, it's never been easier to source and compare the credentials of those with a particular set of skills suited to a role. Not only has this made hiring and headhunting more accessible, time-saving and cost efficient, but it's also widened the recruitment process across different departments in an organisation. Line managers, departmental colleagues, and seniors across the board also participate to source prospects. For example, numerous managers use Email Hunter in combination with LinkedIn to find email addresses from potential candidates and thereby onboarding applicants in the recruitment process.

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3.Gamification: the future of HR?

The Gallap's latest research shows that 51% of employees are disengaged in the workplace, which is particularly remarkable in the case of Millennials, who often feel that they cannot show their best work. As a result, companies are introducing gameplay attributes in the recruitment process as a new alternative to attract, engage, and retain employees.

Companies adopting this new process think that gamification might be the key to boosting corporate culture and commitment. Unilever is a pioneering company in adopting gamification to select the best candidates for their graduate scheme. Google Code Jam attracts talented engineers and developers by engaging with them in an exciting competition.

Regarding gamification providers, Badgeville has deployed 300+ gamification solutions to provide with rich candidates' profiles as well as predicted performance. Another leading gamification solutions' company is Bunchball, which focuses on introducing games not only to recruit personnel but also to engage employees in a new CRM training or online community.

4. Is technology better to find good hires?

Recruiters spend 6 seconds on average reviewing a resume, which might sound preliminary fast. However, it is not that fast in comparison to the huge amount of resumes being screened in the HR departments every day. Here is where technology can help. While recruiters are better at identifying what human attributes are the right ones for certain qualitative aspects like culture fit, technology can really help with the most tedious and data heavy part of the recruitment process.

In fact, although we might like to think that humans have the power to make better hiring decisions than machines, the National Bureau of Economic Research suggests that HR software does a better job to assess prospects' skills and job fit. Analytics technologies help HR managers analyse greater sets of data, which brings more accuracy and clarity to predict employees’ success, reduce turnover risk, and increase employees' retention.

It is clear that new digital capabilities such as games, HR online tools, social media channels and analytics can not only speed up and optimise the recruitment process but also perform tasks at a speed and volume that go beyond human capabilities. Nevertheless, it does not mean that machines are going to replace HR personnel.

Algorithms can be more efficient to identify relevant candidates in the first stages of the recruitment process, however, they are insufficient to communicate by themselves and build the sort of relationships a company needs to create an organisational culture. HR professionals should, therefore, lean on these tools, evolve, and acquire new skills to embark on a digital transformation.  Finding the right balance between technology and human participation seems to be the best approach.  While HR professionals can shift away from focusing on those tasks where machines are better, they can now concentrate more on strategy, HR policy making, and other aspects where human touch is still required.