HR Digital Transformation: What Is It and How to Get Started?

Updated on Apr 23rd, 2024

HR Digital Transformation Services

The pandemic has shown the failure of traditional HR processes. The outdated systems could not retain employees and look after their well-being during such challenging times. Reports that show 19 million U.S. workers left their jobs in 2021 are a clear example of this failure. That’s why companies are shifting their focus to HR digital transformation.

Naturally, there is a dire need for this transition. The HR team is the face of a company. So, it’s high time they take recruitment, talent development, and performance evaluation to the next level. But does moving everything online truly mean digital transformation? If that’s so, then why are companies investing dedicatedly in HR digital transformation services just for their HR department’s digital acceleration? In this blog, we will find answers to many such questions. So, without further ado, let’s dive in!

  • HR digital transformation is the transition where companies advance their HR processes to make them data-driven and automated.
  • Digital transformation in HR has multiple benefits. However, to gain all these benefits ensure you seek custom software development services.
  • There are six essential and simple steps to streamline your HR digital transformation journey.
  • With people analytics or chatbots, companies are embracing the transition of digital transformation in HR operations in full swing.

What is HR Digital Transformation?

It is the transition where companies advance their HR processes to make them data-driven and automated.

Simply put, it eases the day-to-day HR tasks. But, if viewed broadly, it also improves overall operational efficiency. So, when you go digital, you eliminate the tedious manual paperwork but also prepare for overall organizational success. These facts about HR digital transformation also point to something significant. What is it? Well, it’s not just limited to the HR department. But its impact extends and benefits the entire company.

To define this transition, Deloitte’s 2017 Human Capital Trends report states, “HR digital transformation is about HR teams taking up the dual challenge of transforming HR operations on the one hand, and transforming the workforce and the way work is done on the other.”

So, if you are planning to go ahead with this flow, partner with a reliable AI development company to simplify and streamline your HR process. Empower your HR personnel to automate and fast-track redundant tasks. An expert vendor can serve you with the right tools like automation, data analytics, chatbots, and onboarding software, among others. But before you start with it, understand why it’s making noise in the industry.

Key Stats of HR Digital Transformation

Benefits of HR Digital Transformation

Digital transformation in HR has multiple benefits. However, ensure you seek custom software development services. These services are necessary as they can help you build an HR process tailored to fit your organizational needs. That said, let’s look at the key benefits of digital transformation in HR.

employee satisfactionIt’s Great for Employee Satisfaction

When your business grows, you hire more employees to handle the increasing workload. But the HR department often struggles to keep up with the tasks. That’s where digital transformation steps in, bringing together tools and improving communication. This boosts connectedness, keeping employees in the loop and engaged.

And if you move a little ahead, you can add advanced tools like AI chatbots. Such tools are a must-have in your HR digital transformation journey. In addition, by having analytics by their side, your HR team can track each employee efficiently. They can assess their challenges and cater to their needs. Thus, HR digital transformation can lead to happier and more engaged employees!

Recruitment ProcessIt Improves the Recruitment Process

With digital tools and automation, you can say goodbye to time-consuming manual tasks. The automatic planning allows HR teams to swiftly identify, attract, and assess top talent. Digital platforms enable easy job postings and broad reach. This allows the team to attract a wider pool of candidates.

What’s more? Automated resume screening and applicant tracking systems simplify the selection process. For communication, you can have similar advanced tools that speed up collaboration.

But all of this can fall right when you seek customization. So, it’s best to partner with an expert software development company. The experts can help you build an entire ecosystem to revolutionize your recruitment process. Then, saving time, increasing efficiency, and finding the best candidates will become a cakewalk for your HR team.

Increase EfficiencyHR Digital Transformation Increases Process Efficiency

When HR goes digital, heavy workloads significantly fall. Digital transformation slashes mundane tasks. And so, HR executives stop attending the redundant activities. They start focusing on what’s more urgent and important. Moreover, they get the time to brainstorm and research new ways of improving workplace culture and management. As a result, errors minimize, and efficiency skyrockets. So, don’t let your HR team drain their precious energy. Embrace digital transformation to let the guardians of your company excel.

digital being accurateGoing Digital Means Being Accurate

Want to eliminate the hectic data maintenance for your HR team? Turn to HR digital transformation. The move will shift you from traditional methods to AI-powered platforms. These platforms will serve you with processed, analyzed, and accurate data. That’s not all.

Your team will have access to the cloud. And cloud integration will provide multiple benefits. For one, your team would not have to deal with the hassles of constant data updating, tallying, and maintaining. Secondly, they could make informed decisions that’ll aid in the progress of your company. So, it’s time you seek digital transformation and cloud integration services to empower your HR team to work smarter, not harder.

Boost Cost EfficiencyThe Transition can Boost Cost-Efficiency

One of the most striking benefits of HR digital transformation is cost efficiency. Many assume this transition will be costly because it is advanced. But that’s not even closer to the truth. In fact, automation can significantly reduce capital expenditures (CAPEX) and operational expenditures (OPEX) from your balance sheet.

This means you will have plenty of time to focus on business strategies to plan new revenue streams. Plus, when you plan things meticulously, your chances of reducing costs can significantly improve. Moreover, with automation, you boost employee productivity and satisfaction. So, it’s a win-win situation where efficiency and financial gains go hand in hand.

Regulatory ComplianceHR Digital Transformation Can Improve Regulatory Compliance

Most traditional systems lack ensuring compliance. Whether it’s company policies or governance, manual management always stays prone to risks. That will not be the case with digital transformation. It swears by automation. And that means having access to fast alerting systems. The alerts show you know red flags when data management violations occur. This way, taking immediate action becomes easy for executives. Also, with AI tools, they can reduce the risk of data breaches and safeguard sensitive information.

Also Read- Digital Transformation Consulting: A Complete Guide

HR Digital Transformation Steps

Stages of HR Digital Transformation

Indeed, you have to invest time and effort while taking the digital leap. However, it’s not that daunting. Here are 6 essential and simple steps to streamline the transformation.

Stage 1: Business as Usual

This stage is all about setting the stage for your transition. Here, your company has decided to revamp its manual HR processes. Upgrading with cutting-edge HR tools and technology designed for the digital era is a smart move. Interestingly, it’s an exciting time as you take the first steps toward a more efficient and innovative future.

Stage 2: Present and Active

After you get on the same page with your team for HR digital transformation, it’s time to plan. And for this, you experiment to understand what works best for your business needs. So for this step, brace yourself to encourage digital literacy and creativity.

Stage 3: Formalized

This is the fun part. By this stage, you get to know your company’s digital transformation needs. Now that could be anything from HRM software development to building custom analytics dashboards to track employee performance. So, you have to act about what needs to be done. And to act means you have to assume leadership in full swing. Why? Because it’s the time when you decide where to invest and how to allocate resources. Remember you need your team’s full support during this phase.

Stage 4: Strategic

It’s time to lift off the curtain. Show your team your plan. Welcome various perspectives, work with all the teams, and feel the strength of collaboration. The collective insights will result in the development of unique strategic roadmaps.

Stage 5: Converged

Now you bring your HR digital transformation strategy to life. Assemble your team and align them with the goals of your strategy. Remember, these team members are the key contributors. With the best minds on board, you’re all set for the exciting liftoff of your digital transformation journey!

Stage 6: Innovative and Adaptive

After you seal your digital endeavor, it’s finally time to reap the benefits. At this final stage, the transformation will become your new normal. But with a twist. You embrace a culture of exploration and experimentation. You start seeking new ways to innovate and improve your HR processes. So, as you forge ahead in this exciting stage of your digital transformation journey, remember to stay agile and open to new possibilities.

Examples And Use Cases of HR Digital Transformation

The pool of technological advancements is expanding with each passing day. So it’s pretty clear that digital transformation is not static but an ongoing transition. But when it comes to human resources, there are some tried and tested ways of achieving success in this transition. Following are some of the most popular and hit examples of digitization in HR-

People Analytics

Intuitive dashboards are popular for tracking web traffic and inventory management. You can use the same to manage employees in your company. People analytics is all about using data to make smarter decisions in HR. It’s not just about numbers and statistics. But it’s also about understanding and nurturing your employees’ well-being. Through HR digital transformation, you collect valuable data to enhance employee productivity and engagement. Because of all these advantages, Google employed this tool back in 2008. The tech giant used it to identify effective manager behaviors and find key elements that promote a positive team culture.

HR Operations Platform

Digital Adoption Platforms

Introducing new software may seem like an added obstacle for employees. But you can overcome the training hassles with the right tools. Digital adoption platforms can act like that savior for you. They offer interactive on-the-job learning, guiding employees through the features they use most. These platforms analyze usage, automate processes, and enhance user experience. Moreover, if a workflow causes a drop-off, you can swiftly create tooltips or videos through these platforms. Through this, you can eliminate the roadblocks that may arise during your employee training programs. That’s why even Shell adopted a digital learning platform. The move came as a result when the oil tycoon realized a skill gap within its workforce.

AI-Enabled HR Applications

Many companies going digital are harnessing the power of AI. One key component getting extremely popular is chatbots. These intelligent bots can speak with employees or candidates on behalf of your HR executive. They’re always accessible and answer according to scripts your team prepares. Experiencing these advancements, IBM coined the term ‘HR 3.0‘. It signals business leaders making data-driven decisions by harnessing the power of AI.  The term came after the company witnessed a remarkable shift of 50% of the regular HR operations being handled through virtual assistance.

Challenges HR Digital Transformation

challenges of HR Digital Transformation


You can easily overcome these challenges. But before you begin the planning, recall the sweet reminder again. Ensure finding a reliable and expert vendor who can build a customized platform for you. Want to cut to the chase? Read the next and final section.

Case Study

A client wanted to fix the problems of companies that handle procure-to-pay processes. They aimed to help businesses transform digitally by automating their financial, HR, and payroll systems.

Their main challenge was to create a neat database where employees could easily input their data on timesheets. This data had to be processed by project managers and the HR team.

Matellio stepped in and built an outstanding automated platform that collects time and expenses globally. The best part is that it seamlessly integrates with more than 1200 ERP, accounting, project systems, and HR/Payroll systems straight out of the box.

We made the payroll management solution user-friendly for different roles like HR, project managers, executives, contractors, and employees. Each had their own special access and permissions.

Matellio even added an AI-driven chat system, and now payments and receivables are a breeze with in-system invoices generated through the central time and expense system.

Thanks to our team’s hard work, we were able to create a fantastic global time keeping and expense collection platform that works smoothly with various systems. This solution has been praised globally and is now an essential part of employee time tracking and management for many fortune 500 customers.

With the help of the SAP framework, integration into HR systems was seamless, and the new AI-driven smart invoicing system boosted overall efficiency.

HR Digital Transformation Cost

Choose Matellio for HR Digital Transformation

When it comes to transforming your HR processes, Matellio is your best bet. With our expertise and innovative solutions, you can achieve thorough guidance during every stage of your digital transformation journey. Additionally, with years of experience, our team can comprehend the needs of various business leaders pretty quickly. They do not need a whole song and dance. All you have to do is hand over the list of your requirements. Then, you can witness the magic of digital transformation revolutionizing your HR operations in no time. So what are you waiting for? Your domain could be already catching the pace with HR digital transformation. Wait no more and connect with us to start your journey now!

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