It is clear that HR needs to transform, but as a recent panel discussion noted, the path remains murky.
Increasing talent pressures and competitive market landscape is seeing many HR teams embarking on HR transformation.
Yet, in a recent panel discussion entitled “HR Transformation - What Will We Achieve and How Far Along Are We?" held at the recent HR & Digital Asia Summit 2019 Hong Kong, the challenges are many and direction not clear-cut.
The biggest misconception, according to Aalo Gupta, senior executive partner at LSF Global, is seeing the difference between digitization and digitalization. “Yes, there is a lot of confusion,” he said.
The first, Gupta argued, is “simply turning paper into digits.” Digitalization, in comparison, points to transformation.
Akiko Takahashi, executive vice president and chief of staff to the chairman/CEO at Melco International Limited, who moderated the discussion asked what transformation really means to HR leaders.
The prevailing answer was that transformation can mean a lot of things. “Every company has a different definition for it. In the end, you really need to fit the purpose [of your company]. There is no one size fits all,” said Maggie Zhang, chief human resources officer, International, AIG.
Elaine Liu, general manager for Human Resources at Sino Group, saw it as a natural evolution in an organization. "It is a process to see how we can move from where we are, and improve customer and employee experiences."
Gupta added that the most essential part of HR transformation is understanding the why's. "At the very least, we really need to ask why we are doing it."
So, is transformation necessary? After all, it introduces a whole new set of challenges and risks that many are ill-prepared for.
Sino Group’s Liu admitted that it is a question that her company struggles with. For example, in Sino Group’s property business, units are sold quickly. “So when we talked to consultants, we asked why do we need digitalization? Are we going to sell more?”
AIG’s Zhang pointed out that you can run functions like analytics without having to transform. “You certainly can, and most companies are running that way. But [transformation] is really about efficiency. We are using technologies to gain efficiency.”
Liu also noted that in the case of analytics, transformation can improve accuracy. “If you digitize the data, use the same set of data, and have all the definitions confirmed right at the beginning, [the results] will be very useful.”
Takahashi noted that HR is in an unenviable place. They need to support organizational transformation while driving their own. So, how can HR departments ensure they are on the right path.
A top-down approach certainly helps, said AIG's Zhang. "In terms of execution, HR plays an important role in the process. And it is not just transformation but driving a culture shift. How do you get 50,000 people to embrace change and become more agile? You need to shift mindsets."
LSF Group's Gupta shared that top-down transformation is essential, but there needs to be an effort to drive acceptance from the bottom as well. He also echoed Zhang's point about the importance of culture change.
"I have seen enough transformation fail because the lower part of the organization does not embrace the change. Change needs to become part of the culture."
Sino Group's Liu believed transformation needs to be driven at all levels. "There is still a debate internally whether it should come from IT, digital, or business owners. I think it comes from all levels."
It also begins with a mindset shift. Liu noted that her company has rolled out Sino Vision, an internal program to engage employees at all levels and shift their mindsets.
So, do HR teams have what it takes to support transformation?
AIG's Zhang noted that this is an important question. "We are making a huge shift within the team. We are reshuffling the team and creating new roles." It included bringing non-HR colleagues into HR.
Takahashi questioned how such changes will shape the future role of HR and help them stay relevant.
Sino Group’s Liu answered that HR can only be relevant “if you are with your business.” She observed that many corporate HR teams still operate within silos. “I like to think that HR teams need to get into their business and become business partners.”
It also comes down to the skills development of the HR team members. “Business people are always frustrated with the lack of understanding from their HR. So, you need to develop your skillsets to work with your business. Therefore, the real question is what we are doing to develop the skills of our colleagues.”