What is HR transformation, and why does it matter?

4 steps to ensure your HR transformation gets results

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By Nicole Schreiber-Shearer, Future of Work Specialist at Gloat

April 7, 2022

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HR transformation is no longer a buzzword; it’s a business necessity. After stepping into the spotlight during COVID-19’s onset, HR leaders are now at the helm of reimagining work and workforces. Their lengthy list of priorities includes overcoming an unprecedented labor shortage, devising skills-based talent management strategies, and rewriting the employee value proposition.

None of these agenda items are simple tasks. The only way to address these emerging priorities is by taking a revolutionary approach. Rather than serving as a support function, HR must step into its new role as a strategic partner that’s pivotal to business success.

As the HR function rapidly evolves, leaders can no longer rely on the same tools designed to support an administrative role. Instead, they must embrace bold ideas and disruptive technology as part of their HR transformation journey. But there’s still a lot of uncertainty about what goes into a successful transformation strategy and the best practices that underpin superior results.

What is HR transformation?

HR transformation describes the evolution of the HR function. It is the process of seamlessly adapting and integrating service delivery, talent, and technology into HR strategy to create greater business value—by driving both operational excellence and strategic impact. For HR leaders, it’s about evolving their own role and the HR function to better align people, strategy, processes, and technology with business goals to deliver more impact for all stakeholders.

HR has always been critical to enterprise operations because the department is responsible for workforce planning and performance management. Yet, as we move into a new and more agile world of work, HR transformation is becoming increasingly vital. Now that talent is the greatest driver of competitive advantage, the right approach to HR transformation will make or break business outcomes.

The rise of HR transformation roles

As HR’s role evolves, departmental titles are getting updated to reflect these new responsibilities. Now that the employee-employer dynamic has shifted in workers’ favor, cultivating a compelling employee experience is a priority at many organizations. As a result, titles with “People” in the name are on the rise, like People Operations Manager or Chief People Officer.

Similarly, the word “Transformation” is quickly becoming a mainstay in many HR job titles. Roles like HR Transformation Manager and Vice President of HR Transformation are gaining popularity, underscoring the heavy emphasis organizations are placing on their transformation processes.

Why should HR transformation be a priority right now?

Every business is now facing the same crossroads. Leaders need to decide whether they will hold onto old frameworks that are quickly becoming obsolete, or embrace new tools and operating models as they reimagine ways of working.

It’s becoming clear that enterprises must rapidly evolve their strategies to thrive in the new world of work. Consequently, HR transformation is a necessity for businesses that are looking to outpace the competition. It offers several game-changing benefits:

  • Position HR as strategic partners
    HR can no longer be seen as workforce developers and administrators. HR leaders are now key players in shaping the future of the business by building a new blueprint for successful talent management. Stakeholders across the organization must recognize the value of HR and work in tandem with HR leaders to achieve strategic priorities
  • Unlock capacity and drive efficiency
    A core component of successful HR transformation is shifting to skills-based talent management. When organizations’ talent management strategies are rooted in skills, leaders can efficiently access the capabilities they need to get key projects across the finish line and empower employees to achieve their full potential. HR transformation and a new set of tech-enabled solutions facilitate the transition to skills-based strategies, which will be revolutionary for every business unit.
  • Enhance employee experience
    Workers want more from their employers than ever before and it falls on HR to ensure that these expectations are met. Employees want to see their organizations stepping up and making a difference, taking a stance on societal issues, and providing their people with choice and agency. These asks can only be achieved through an HR transformation strategy that empowers leaders to retire obsolete rules and embrace new ways of thinking.

4 Steps to maximize the success of your HR transformation

At this point, most leaders recognize the importance of HR transformation. Yet, there’s a lot of uncertainty about what it takes to create an impactful strategy. Here are some best practices:

#1. Get leaders on board
HR transformation isn’t just for people in the department; it’s going to impact every business function, so it’s important to get leaders from across the organization on board. Include members of the C-suite in the process from the start and encourage them to share their ideas and offer feedback. By listening and incorporating other leaders’ insights into your strategy, you’ll secure buy-in and ensure your approach aligns with their priorities.

#2. Don’t overlook the people component
Getting buy-in from leadership is undoubtedly important. But if you want your HR transformation to be successful, you’ll also need to gain support from your employees. To help everyone get comfortable with the new role that HR is going to play at your company, take an employee-centric approach to strategizing.

Give your employees the chance to ask questions, offer feedback, and share their concerns. And prioritize transparent communications throughout your HR transformation, so that people feel like they’re being included in the process and they know what’s happening next.

#3. Set strategic goals
If you don’t go into your HR transformation with specific goals in mind, you’re setting yourself up for failure. Start by checking in with leaders from different departments to understand what their objectives are and the biggest challenges that are making these goals difficult to achieve. Then, create two sets of transformation goals, one for your department and one for the business at large. Include measurable success metrics that are developed based on your goals and a step-by-step guide for the transformation process.

#4. Choose the right technology
Technology isn’t the only part of HR transformation, but it’s undoubtedly an important component that deserves a lot of thought. The right technology will bring your vision for HR transformation to life, and it can even help you stave off the Great Resignation.

Carefully consider what software will be crucial for your approach. Look for solutions that will automate and streamline processes, reduce time to hire and make onboarding more efficient, and move the needle on diversity and inclusion initiatives.

Rather than focusing solely on upgrading HR technology that you already use, it’s beneficial to consider new categories like the talent marketplace. These platforms harness ethically-constructed AI to dynamically match employees to projects, gigs, mentoring, and full-time roles. While talent marketplaces are relatively new, Gartner has already named them as one of the top three areas of focus to drive value in 2022.

If you want to set your organization apart as a leader in the new world of work, HR transformation is non-negotiable. To learn more about how to upgrade your strategy and the crucial role that talent marketplaces will play, download our guide, Why 2022 is the year to launch a talent marketplace.

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