The Cloud human resource (HR) departments software were probably characterized by stacks of dusty folders where human resource policies, employee reviews, codes of conduct, and other strategic documents were stored. Trying to find and make use of some of those documents was an exercise in and of itself. The lack of digitalization tended to make human resource departments lethargic and less effective, especially once digital technologies began to take over other aspects of the business world.

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Today, digitalization technologies, artificial intelligence (AI), cloud based computer software, and other aspects of our digitalized world have arrived to completely transform virtually every aspect of how businesses are operated, including human resource departments. Generation Z, widely considered to be the first “digital native” generation, will only further benefit from digital HR as they begin to enter the workforce in massive numbers in the coming years. Below, we offer a complete review of what digital HR entails, some potential applications in the human resource industry, some potential advantages for companies that adopt digital HR strategies, and then finish by offering some simple suggestions for getting started with digital HR adoption.

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What is Digital HR?

Simply put, digital HR is the process of transforming human resources processes and services with the use of digital technologies. Some of these technologies can include software analytics, artificial intelligence, and cloud technologies (SMAC). The exact applications will largely depend on the operations of HR departments in different industries and companies. However, the digitalization of these HR services and processes follows from the more extensive digitalization of all business processes in general.

The objective of digital HR is multifold. Firstly, digital HR services and processes are meant to increase the efficiency of business operations, enhance employee experience, and help companies find and manage a talented workforce in order to meet certain business goals. Whereas traditional HR was almost entirely paper-based (and thus a labor intensive and time consuming activity), the digitalization of HR is meant to radically improve efficiency through mobile, optimized, and digitalized processes. It seeks to help companies stay successful in increasingly competitive markets through taking advantage of streamlined, more powerful analytic tools that are transforming the way businesses operate.

How has Digital HR Changed the Human Resources Industry?

Finding and retaining quality and high talent employees is key to the success of any business. Younger employees who have grown up in a digitalized world will most likely scoff at companies whose HR departments continue to implement paper-based employee services. Filling out endless forms and documents as part of periodic evaluations or applications for employee benefits will come across as old fashioned and out of date, and might drive away younger talent that is in search of companies willing to embrace the latest technological developments.

Digital HR practices, then, can be implemented to improve employee engagement and retention. Seamless online application programs make it much less burdensome for high quality talent to find job offerings and apply from the comfort of their home. Furthermore, digital HR can also actively recruit employee talent through social media channels. Social media can also be utilized by companies who adopt digital HR strategies for continued employee learning programs.

Younger generations who grew up in a digitalized world will enter the workforce expecting the ease and simplicity of digital services. The “consumerization” of human resource services is an added benefit of digital HR as it seeks to create a user friendly self-service option for employees looking to be proactive in the management of the HR services offered to them.

Furthermore, digital HR services and practices can also be implemented to improve human capital management. There are several digitalized and cloud based talent management software programs on the market today that are part of a wider digital HR strategy to increase the success of HR goals. For example, time and attendance software can be easily implemented to increase productivity and maximize profit through more efficient workforces.

Digital HR relies on a wide range of data and analytics that come with certain cloud based software. These programs measure the effectiveness of employee talent, performance, and contentment during every stage from recruitment to retirement.

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Some Potential Benefits/Advantages with Digital HR

The employee and talent management systems that are a central part of digital HR are designed for maximum efficiency and come with automatic upgrades as the industry progresses. Improved automation reduces the possibility for human error in the management of a workforce. Furthermore, digital HR offers real time data input thus allowing HR administrators to evaluate and change certain strategies and policies that aren´t working.

At the same time, the digitalization of human resources can allow for connections between different business departments. This allows other stakeholders within a company to be engaged with HR policies that affect their operations. Thus, digital HR can help more stakeholders become involved and engaged with overarching business goals.

As we mentioned above, digital HR services can also be oriented towards employee services and benefits. Allowing employees to digitally access and manage their HR data is useful, especially in industries with younger employees who have come to expect this greater sense of control. At the same, time, allowing employees to access their HR data such as employee evaluations and talent management allows for a more transparent workplace environment.

As digital HR technology continues to advance, software programs and artificial intelligence technology will be able to offer services to measure virtually every part of the employee life cycle.

How to Get Started with Digital HR

There is little doubt that the digitalization of HR services and processes bring numerous benefits to both companies and their employees. However, we are a long way from the complete automation of HR services. Companies looking to take advantage of digital HR need to find and train talented HR employees who will know how to make the most of the wide range of software, analytics, and AI tools at their disposal.

Furthermore, instead of attempting a complete makeover of an HR department, companies would do well to start small. An internal evaluation can help companies discover which aspects of their HR department could most benefit from a digital remodeling. For example, if your current payroll management system is working, but you are having trouble recruiting high talent employees, introducing digital HR technologies that allow your company to discover and connect with talent might be a good starting point for digital HR transformation.