5 good reasons for digitalization in HR

Digital technologies are transforming our economy and society. Terms such as the industry 4.0 and the digitalization of business processes are currently on the agenda. While some companies are now focusing on the implementation of artificial intelligence, the digitalization of HR processes, however, has often lagged behind. In this respect, employees are key to the success of companies, so the personnel department should be considered to be at the very heart of things.

It is finally time to tackle digitalization in the field of personnel. Read about why this is worthwhile for your company in this blog article

The digitalization divide in the HR departmen

Personnel departments play an important role in every company. They recruit new talent, induct them into the company, and are responsible for the development of new and existing employees so that they generate as much revenue as possible. HR managers are also responsible for the payroll accounting, the creation and management of personnel files, the management of working times, leave and absences of all employees, and the general management of personnel data.

And modern personnel departments are being asked to do more and more. They are expected to provide strategic advice to the other departments, prepare for decisions that are relevant to the company, and be well-prepared in the “war for talent”. That’s quite a lot. In addition to all the administrative tasks, it is often the case that there simply isn’t enough time to complete the important strategic tasks. And the more employees there are in the company, the greater the administrative outlay.

The wish list:

• Provision of high quality services
• Talent management
• Personnel development

The reality:

• 50% administrative tasks
• Long searches for information and documents
• Considerable need for manual coordination with various stakeholders

Digital HR processes – an inventory

This is where digitalization in the field of personnel comes into play. Digital processes automate and streamline recurrent manual tasks and take the pressure off the core business of the personnel department. This is something that decision-makers have now taken on board. According to a study on HR by the Hackett Group, 82 percent of managers think digitalization will have a positive impact in the field of personnel, although only around 40 percent of the responsible persons consider themselves well equipped. The implementation also remains insufficient.

Many companies now use software programs to log working times and for personnel scheduling and controlling. Most of the core tasks in the area of HR, such as applicant management, talent management and recruitment continue to be completed manually, however.

While topics such as process automation, cost reduction and compliance were previously high on the agenda at companies and their HR departments, now and in the future, the development of sustainable relationships with each individual employee is taking center stage. New forms of cooperation between companies and employees – referred to as “new work” – are the biggest challenges faced by the world of HR.

Five good reasons for the digitalization of your HR department

1. Finally: do what you most enjoy

Finding a specific HR document in an archive with countless shelves and folders is akin to looking for a needle in a haystack. In the long run, most employees in the field of HR find repeatedly searching for and archiving documents to be stressful and frustrating. Managing documents that arrive by email and organizing data in Excel or Word documents is time-consuming and annoying. This delays subsequent tasks and unnecessarily makes processes more drawn out.

If documents aren’t available immediately, things often need to be coordinated by email and telephone to get hold of the right information. This means customers, partners and internal colleagues have to wait longer for answers, which can annoy them. The HR employees could also put this time to better use on other important tasks.

All the key personnel documents are stored centrally in a digital personnel file. You can find all the associated information, including documents, in just a few clicks, and the employees in the company can also access personnel information that has been approved for them.

You can link the software for the digital personnel files to any ERP system with ease. The digital personnel file for SAP from easy is seamlessly integrated in your SAP system, for instance, and is based on SAP technology – complicated training isn’t required to work with the digital personnel file.

2. See through the thicket of processes

Whether you use SAP as the leading HR system in your company or you use other ERP systems, in our experience, the topic of process digitalization often remains neglected. This is also an area in which you can generate genuine added value for your personnel management. Digitalization is making processes much easier to understand and more transparent for everyone. With standardized tasks, a software program ensures a lower susceptibility to errors and accelerates the interaction.

The creation of employment references, for example, is a multi-stage process that involves various stakeholders. As someone responsible for HR, how long, on average, do you think it takes to compile an employment reference manually? In addition to the correct terminology, which requires continuous updating and verification, the coordination between the individual stakeholders is also very time consuming: The compilation, the signature, checking, approval, etc. A digital solution, by contrast, automates the entire process. When an employee requests an employment reference, they initiate the automated digital process: The personnel department receives the request, and in a few clicks, the employees create the reference with ready-made text modules and forward it to their superiors via workflow for the subsequent verification and digital signature. A solution of this kind is available as a standard add-on for SAP HCM for example. We have calculated that with digital support, the time required for the creation of employment references can be reduced to well under an hour. In addition to the time saving, the increased transparency is another clear advantage over manual processes – after all, you can view the process status at any time.

3. Never miss another deadline

Digital processes bring you increased transparency in all of your HR processes. Why? Whether it’s a checklist for onboarding a new employee, preparing the 25th workplace anniversary of a valued colleague, or the prompt processing of applications: With analogue paperwork, decentralized calendars or Excel lists that your colleagues are unable access, you may miss important deadlines, constantly find yourself behind schedule and even be required to interrupt your work frequently so that you remember all of your administrative to do’s.

When processes run on a completely digital basis, however, you will be automatically reminded of the key deadlines by email. If employees want to know when their employment reference will be ready, you can also view its process status digitally at any time and provide them with immediate information. With the option for digital signatures, a process no longer hits the buffers and you can comply with deadlines much more easily.

4. Staying on the safe side

The top priority in the field of personnel is to ensure audit safety, compliance and adherence to deadlines, especially regarding the archiving of personnel data. Personnel files that contain personal data, in particular, are subject to clearly-defined legal regulations regarding their retention and erasure.

Paper can deteriorate or go astray, but digital documents stored within a DMS offer protection against the loss of data. Moreover, each change is documented and versioned, so that the transparency and traceability are always guaranteed. Most DMS are also connected to an archive system that automatically complies with the retention periods. Each software program for a digital personnel file should be GDPR-ready as standard. When choosing the right tools for your company, make sure you take these things into account.

In addition to the digital personnel file, other automated processes can help you to ensure legal security and GDPR-conformity pretty much at the touch of a button: Our software for the digital generation of employment references, for example, is already equipped with legally-verified text modules in its standard version, and these are consistently kept up to date with updates. And you will also be informed of the deadlines for the retention of personal data in the application and onboarding process.

5. Make your employees and managers happy with self-services

In the current situation in particular, many companies have been forced to ask their employees to work from home at short notice. In the first few weeks, the lack of digitalized processes led to a huge drop in productivity and an increased risk of infringements as regards compliance. For example, employees have taken paper files home with them, internal documents have been sent for signing by email, etc. Digital self-services not only help people to work effectively from any location, they are also one of the keys to new freedom for HR employees. And for a digital user experience, the Employee and Manager Self Service further strengthens the individual responsibility of the employees and managers alike.

At the same time, the digitalization of HR with self-services is seeing employees – particularly those from the younger millennial and Z generations – calling for a new user experience in terms of HR tasks. In this context, Digital Employee and Manager Self Service applications are all set to become an important building block in the transformation to HR 4.0.

Whether it is applying for leave, ordering a company car, applying for parental leave or viewing and/or changing personnel data independently – everything is a win-win situation for personnel managers, employees and executives alike thanks to transparent and secure self-services.

Start now with the digitalization of your personnel department

In summary, the digitalization of HR departments is worthwhile from several perspectives:

• Legal certainty and compliance, and straightforward adherence to deadlines
• HR employees save time with the processing of administrative tasks
• Processes involving different stakeholders run more efficiently and transparently and don’t go undone
• Your employees work on a more motivated and productive basis with intuitive and digital self-services
• You attract more and better-matched talented staff to your company
• You save on filing space, paper and costs!

Despite this, many companies are continuing to shy away from digitalization in the field of personnel. Many believe digitalization to be expensive and complicated. In fact, however, the investment in the software solutions pays for itself within a very short period of time. According to a study by Kienbaum, companies spend far more on manual processes, including administrative personnel work.

The digitalization project can also be completed in a straightforward and structured way. In the next blog post in our series on the “Digitalization of the HR department” we will provide you with a summary of our experiences from projects both big and small, and discuss the challenges you might face when digitalizing your personnel department and how you can solve them.