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HR: Digitization, Digitalization, Digital Transformation

Today’s world is constantly connected, and that affects how we communicate and consume information. This also gives a clear impact on how we do business in multiple aspects and operations. HR (Human Resources) is no exception. 

There have been many discussions on HR and digital transformation; what it means, different stages of the transformation, and more importantly, examples of the practice. However, one thing that needs to be clear is three basic components of the process in which are oftentimes considered interchangeable when they are not. Each of them is a step leading to the next one. Identifying how they differ allows us to understand better the necessary game plan for a data-driven HR function.

  1. Digitization

This is the first step, and it refers to the process of converting information (from an analog format) into a digital one, for example, data digital and computer-readable archives. This shift is the simplest, and the starting point for your HR department if they still rely on manual processes. It benefits companies as it essentially enables better accessibility. For example, going paperless by digitizing employment records that have been kept in files and folders only.

  1. Digitalization

As your HR function adopts a digital approach, the next step would be to optimize the processes or data. This is where digitalization differs from digitization. Using technology, digitalization creates or changes a business model to run a business. In other words, your HR team leverages a digital approach and tools for its operations. All the tasks that have been carried out manually would be reevaluated, reengineered, and reimagined, changing the entire process and embracing the capabilities of technology to make better business decisions, better HR advancement. Some examples include employee self-service apps and recruitment through social media.

  1. Digital Transformation

This is the outcome of digitization and digitalization. At this point, all of your HR functions should revolve around technology, which does not only refer to the tools and systems but also the mindset of the people. It is long-term and requires communication initiatives and collaboration. In the long run, it leads towards better efficiency and productivity. And at a certain point, companies who cannot reach this point might run the risk of losing relevance. One example that has become more common is the use of AI for the recruitment process. This is when an AI-based recruitment program helps companies to make hiring predictions and find the perfect fit for the business. 

While we mentioned earlier that automation and analytics are key, please be informed that there are multiple aspects to focus on as well. You will need to establish a clear goal of what to achieve by moving towards the direction of digital transformation, for example reducing time-to-hire by 14 days or increasing the retention rate. You should also understand that being data-driven is not merely a nice catchphrase, it is allowing data to guide your decisions. In that case, data literacy is another component your business should build. You will need to work with experts as well as establish a strong IT team as they would be the ones who assist you and your HR personnel along the way. Last but not least, use reliable programs or software for all the different tasks there are. Digital transformation is not simply about automating everything, it is automating with a purpose. And the purpose should be successful only when we do it right. In this case, when you opt for software, choose one that serves your needs efficiently and could become your one-stop solution. Take Kayaroll as an example. Designed especially for SMEs and startups, it is a payroll software that could significantly change how your payroll system works. Not only does it automate your payroll tasks, but it also helps your business to stay compliant as it is IRAS-integrated. Kayaroll could be an ideal example of software that will transform your business. Take a look at what it does and see how your HR team advances towards the better function you aim for. We have a free limited offer for the first one hundred businesses to sign up. Discover more on our website and take the step you need for your HR solution.