hr between digital transformation and the new world of work · understand the cloud as a...

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The Global Interim Management Group

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»There will be no fi nal state in which HR becomes merely an IT service that can be handled on a smartphone.«

The world of work is in a state of upheaval. Flexible working models and job sharing are on the rise, inter-national and cross-company networking are dramatically increasing the complexity of work, and proven manage-ment and organizational models are being put to the

test. Companies are increasingly acting as networks and are placing the management of complex teams at the center of organizational structuring. The “organization of the future” has become HR Topic Number 1.

// White Paper

ORGANIZATION

OF THE FUTURE

HR between digital transformation and the new world of work

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3 Editorial

4 Overview: HR between digital

transformation and the new world of work

6 HR today: an overburdened administrative

department without strategic weight

6 1. Shortage of skilled workers is intensifying War for Talents

7 2. HR departments are poorly equipped technologically

7 3. Globalization, networking and digitization call for new forms of cooperation

8 4. investment backlog in further training

9 HR tomorrow: a strategic business partner –

thanks to digital technologies and artifi cial

intelligence

9 1. Digital tools and artifi cial intelligence are natural components of recruiting

10 2. Electronic personnel fi les, self services and cloud solutions reduce the HR department’s workload

10 3. Modern communication platforms enable international, cross-company teamwork

10 4. Lifelong learning determines the everyday life of every single employee

11 Our recommendations for HR professionals

11 1. Digital HR is a strategic competitive advantage

11 2. Cloud technology is also a competitive factor for HR

11 3. Algorithms and user-centric software make employees more productive in the new world of work

11 4. Innovation and agility in human resources are decisive for the success of the company

CONTENTS

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In view of the radical changes occurring within the working world, new technolo-gies are called for. On the one hand, they should help individual employees to be more productive. On the other they need to support the successful management of complex teams. Team-oriented platforms, tools for coaching and HR analytics, mon-itoring and assessment therefore urgently need to come much more into the spot-light. To take just one example: in the years to come, many companies will replace their email systems with new tools that facilitate collaboration and communication – e.g. Microsoft Teams, Workplace from Facebook, Slack, Trello or Skype.In this environment, HR work needs to be understood more than ever as a stra-tegic competitive factor. But the reality in many companies is still very different. Up to now, the relevance of HR to strategic development has barely been noticed – to

say nothing of the efficiency potential of digital technologies. In a globalise expert survey on digitization in the HR sector, 82 percent of respondents stated that their HR department still works primarily with paper or Excel.

Which concrete challenges can and

must digital HR technologies actually

solve – and where is the greatest need

for action?

In late 2018, globalise analyzed the way in which digital transformation as well as new work and organizational requirements will change HR work. The study was based on three core questions: How is the world of work and thus HR management changing? Which HR technologies already exists to-day and in what way are they successful? In which areas are the biggest challenges to be found? We asked more than 80 de-cision-makers, HR professionals, interim

EDITORIAL

The “organization of the future“ is regarded as HR Topic Number 1. In this environment, HR work must be understood more than ever as a strategic competitive factor. But the reality in many companies still looks very different. The relevance of HR to strategic development has so far hardly been noticed – to say nothing of the efficiency potential of digital technologies. In a globalise expert survey on digitization in the HR sector, 82 percent of respondents stated that their HR department still works primarily with paper or Excel.

managers and directors for their respons-es to these questions. The experts were drawn primarily from the focus sectors Automotive, Healthcare & Life Sciences, Consumer Goods & Retail, Mechanical and Plant Engineering, and Telecommuni-cations, IT & Media (TIMe).Based on our survey, this white paper pro-vides an overview of the status quo and the most pressing challenges in the HR field, as well as providing concrete recom-mendations for HR professionals.•

Dr. Harald Linné,

CEO and Member of the Executive Board,

at globalise company Atreus, Germany

Dr. Christian Frank,

Director and Member of the Executive Board,

at globalise company Atreus, Germany

Dr. Harald Linné, CEO and Member of the Executive Board at globalise company Atreus, Germany

Dr. Christian Frank, Director and Member of the Executive Board at globalise company Atreus, Germany

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1 Digital tools and artifi cial intelligence

are a natural part of recruiting

Storytelling, employee advocacy and AI are new instruments in recruiting. Jobs are fi lled quickly and precisely using Robotic Process Automation (RPA).

2 Electronic personnel fi les, self services

and cloud solutions reduce the HR

department‘s workload

Digital personnel fi les allow the automation of routine activities in the HR team. This creates space for strategic tasks such as employee and organizational development.

3 Modern communication platforms

enable cross-country and cross-company

teamwork

Supplemented by AI, robotics and cognitive tools, networked systems enable agile teamwork. Flex-ible working time models and workspace formats are changing the way people work together.

4 Lifelong learning determines the every-

day working life of every employee

Learning and training are ubiquitous and take place via e-learning, microlearning or gamifi ca-tion. Employees learn in a self-determined way on a continuous basis.

1 Shortage of skilled workers is

intensifying War for Talents

In the face of an ageing population, the increas-ing shortage of highly qualifi ed specialists and managers is accelerating the competition for top talents.

2 HR departments are poorly equipped

technologically

Many HR teams are administrative departments that still work with paper and Excel. Digital per-sonnel fi les are as much a dream of the future as using the cloud.

3 Globalization, networking and

digitization make new forms of

cooperation necessary

Hierarchy impacts on expertise, employees and departments isolate themselves, email is the most important communication medium and teamwork tools are lacking. In many companies, work is still organized today in the same way it was 20 years ago.

4 Investment backlog in further training

The available knowledge is growing rapidly, job profi les are changing faster than ever. New ap-proaches to learning and training are therefore urgently needed. However, many companies still rely on traditional training methods based on the watering can principle.

HR today: an overburdened administrative department without strategic weight

HR tomorrow: a strategic business partner – thanks to digital technologies and artifi cial intelligence

HR today HR tomorrowHR tomorrow

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Overview: HR between digital transformation and the new world of work

Roughly simplifi ed, what will the HR world look like in 2019 – and how will it need to change in the years to come? We highlight the four most important fi elds of action:

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Our 4 recommendations for HR professionals:

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Turn digital HR into a strategic competi-

tive advantage.

HR contributes signifi cantly to the added value of your company. Develop a long-term HR technology strategy that inte-grates cloud-based ERP platforms, applica-tions, reporting and tools for AI, bots and other solutions.

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Understand the cloud as a competitive

factor for HR too. Compared to legacy systems, the cloud allows easy scaling as the company grows or changes. It also enables new functions to be tested and released in the shortest possible time.

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Use algorithms and user-centric soft-

ware to make your employees more

productive in the new world of work.

Focus on intuitive solutions that offer everything from a single source. Or ag-gregate your system landscapes. For this purpose, form a digital HR team that tests new solutions based on AI, VR or chatbot technologies.

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Focus on innovation and agility in hu-

man resources.

Innovation is becoming a core strategy in HR as well – which is why HR should deploy agile methods. Many HR teams al-ready use methods such as Design Think-ing to identify the needs of “their” users – i.e. employees and managers – and to respond to them in the best possible way.

Algorithms and user-centric

software

Innovation and agility in

human resources

HR professional

Digital HR as a strategic competitive advantage

Cloud as a competitive factor for HR

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HR today: an overburdened administrative department without strategic weight

Our survey of HR experts revealed that human resources work is still dominated by manual administrative tasks. Many HR departments are poorly prepared for the challenges of the coming years. We were able to identify four major trends.

is nowhere near enough. Instead, companies need to make every effort to recruit suitable talents through the right channels – especially as the current “employee mar-ket” has shifted market power towards candidates. With sufficient qualifications, they are able to freely choose where they work. From a potential employer, they expect an innovative approach, authentic insights into the com-pany and an employee-friendly corporate culture – not to mention the working conditions, which also need to match their expectations. But in many places, recruiting is still poorly prepared for the War for Talents. To take just one example, simply creating a job advertisement often seems to be an underestimated hurdle. In conver-sations with our business partners, we often hear about approvals processes lasting from six to eight weeks, just to formulate the invitation to apply. When we interview candidates, we frequently encounter the topic that many job profiles are very demanding, but also very long and confusingly formulated. Many candidates feel that they are not sufficiently addressed and, if they feel at all un-sure, will simply not apply. It is clear that new, exciting approaches in recruiting are urgently required.

1 Shortage of skilled workers is intensifying

War for Talents

Coupled with an ageing population, the increasing short-age of highly qualified specialists and managers is accel-erating competition for top talent. This requires new crea-tive approaches in recruiting.

Today, companies in all industries are complaining about the lack of specialists and managers; competition for tal-ents is intensifying. The situation will gradually improve, but in general terms not where there is a shortage today. The consequences of demographic change are foreseea-ble. The moment baby boomers retire, companies lose a wealth of experience and implicit knowledge, for which subsequent generations will not be able to compensate in numbers alone. By 2025, the average workforce is ex-pected to be comprised of 75 percent millennials (born since 1980).The War for Talents is entering the next round. It will re-quire new approaches to recruiting to attract, develop and retain a competitive and more flexible pool of talent. Sim-ply publishing employment opportunities on job portals

»We need to be able to fill vacant positions much faster and more accurately.«

A Talent Acquisition Specialist

»During an internal search process for a successor, we spent three weeks interviewing managers to identify just one suitable candidate.«

A board member at a German Technology Group

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teamwork that relies on cross-departmental swarm intel-ligence is rare. Email is often still the preferred communi-cation medium, although it has long since ceased to fit in with the networked world of work.This is particularly striking because the number of free-lancers and external contractors will increase rapidly in the coming years. This will require a rethinking of per-sonnel diagnostics and competence analysis in order to assemble successful project teams to meet new chal-lenges or develop succession planning. Many companies today are a long way from being able to do this. In most cases, the skills, abilities and evaluation of an employee have not been updated on systems since hiring, making it impossible to identify talents company-wide or exter-nally.

Within the scope of our expert discussions, we conduct-ed a (non-representative) survey of the degree of digiti-zation maturity in the HR departments of companies. 82 percent of respondents stated that their HR department is not digitized and still works with paper or Excel. Many are still a long way from having digital personnel files, which would allow numerous HR processes to be auto-mated and reduce the HR department‘s workload. Cloud solutions are not widespread either, although they are cheaper, more flexible and more user-friendly. To develop its role as a strategic partner, the HR department has to go digital.

3 Globalization, networking and digitization

make new forms of cooperation necessary

Hierarchy impacts on expertise, employees and depart-ments isolate themselves, email is the most important communication medium and teamwork tools are lacking. In many companies, work is still organized today in the same way it was 20 years ago.

The high pace of change in a VUCA world (Volatility, Uncer-tainty, Complexity, Ambiguity), the dissemination of agile methods, cross-company and international networking as well as the requirements of ”New Work“ make working in networked team structures imperative. In many com-panies, however, traditional forms of organization based on the watering can still predominate. Hierarchy impacts expertise, thinking and working is done in silos. Real

2 HR departments are poorly equipped

technologically

HR teams today are often administrative departments that are still working with paper and Excel. Digital per-sonnel files are as much a dream of the future as using the cloud. This no longer adequately reflects the strategic importance of HR work.

Many HR departments develop too slowly from an ad-ministrative department into a strategic partner within the company – often because they are poorly equipped technologically, with many routine tasks still needing to be performed manually. A classic example is the vacation request, which is submitted on paper and signed by the manager before it reaches the HR department.

»A company’s uniqueness lies in the people who work for it.«

CEO at a manufacturer of measurement and control technology

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The idea often still prevails that knowledge is some-thing acquired during your studies, training or the first few years of working life, which then simply needs to be complemented from time to time to gain new competen-cies. But the faster job profiles and requirements change, the more important it is for all employees to continuously further their education. The classic training format, with the trainer standing in front of the class – which is still the rule today – is no longer the right instrument. And increasingly, the topic of training is no longer solely the responsibility of the employer – employees need to take an active role on their own behalf. •

works and systems, but even these need to adapt ac-cordingly when employees suddenly find themselves in different teams and report to multiple managers. There is also frequently a lack of (online) feedback and survey systems that are linked to the process of performance measurement. These are important in being able to retain employees permanently.

4 Investment backlog in further training

The available knowledge is growing rapidly, job profiles are changing faster than ever. New approaches to learn-ing and training are therefore urgently needed. However, many companies still rely on traditional training methods based on the waterfall can principle.

The faster the available knowledge grows, the less suf-ficient it is to send employees for further training once a year according to the waterfall can principle. But this is still the case today. Companies therefore need to invest significantly more in their workforce to keep pace with digital development.

The annual performance review is often still the only method used to measure performance. Given the rap-id changes taking place within companies, the benefits of this appraisal for both employers and employees are questionable. Continuous performance measurement and discussions of potential would be far more beneficial. Some companies have already introduced OKR frame-

»To avoid losing them, companies must offer their ‘high potential’ employees exciting work topics – sometimes even outside the company.«

»Digitization demands lifelong learning from each individual and a willingness to adapt to new challenges at all stages of their careers.«

Harald Smolak, Director and Head of the HR Solution Group, at globalise company Atreus, Germany

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1 Digital tools and artificial

intelligence are a natural part

of recruiting

To win the War for Talents in times of a shortage of skilled workers, the pioneers among companies are focusing on con-tinuous and long-term targeted digital re-cruiting of new talents. They use storytell-ing and present themselves as attractive employers to their target candidates in all relevant social networks and in all con-ceivable formats. They also use employee advocacy – i.e. the enthusiasm of their motivated employees – as a lever to make contact with potential employees and to

recruit suitable candidates. Filling positions is achieved much faster and in a more tar-geted manner. In an employee market, a high level of reaction speed is crucial in at-tracting top talents. To support their work, human resource managers also use online and video assessments, data-driven sourc-ing and AI-based matching. In this way, they can assess the personal and profes-sional fit of candidates much more effec-tively than in the past.Job advertisements are no longer creat-ed manually, but are defined and refined with the help of artificial intelligence on the basis of successful previous hires. In

»Because we don’t know today which professional competencies we will need tomorrow, it is all the more important to pay attention to the right be-haviors (interest in new things, willingness to learn, curiosity, willingness to change), which enable new competencies to be rapidly acquired.«

HR director at a manufacturer of industrial robots and solutions for factory automation

»In the future, digital assistants (such as IBM Watson) will answer employees’ questions by voice.«

CEO at a market leader in the automation of power supply networks

Companies that are beginning to redefine the role of HR work today can gain a significant competitive advantage. To achieve this, they should focus on creative, proactive recruiting, digitization of HR processes, modern forms of communication and lifelong learn-ing. At the same time, the corporate culture and self-perception of the individual employee also need to change.

HR tomorrow: a strategic business partner – thanks to digital technologies and artificial intelligence

the process, the inflow of applications can be automatically evaluated and the job de-scription further optimized. A communica-tion channel that is always available (e.g. via app, messenger or chatbot) answers the applicant‘s questions quickly and com-prehensively, around the clock. This is im-portant because applicants usually deal with job applications at times when the HR department has already clocked off for the day.

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3 Modern communication plat-

forms enable cross-country and

cross-company teamwork

Inefficient email is being replaced by mod-ern communication platforms such as Slack, Confluence, Jira or Microsoft Teams, which enable networked teamworking across departments, companies and coun-tries. These platforms are supported and complemented by AI systems, robotics and cognitive tools.To be able to manage the fluid teams of permanent employees, freelancers and external contractors flexibly and strategi-cally at the same time, work management solutions for executives and personnel managers have become widely accepted. These are linked to systems for person-

nel diagnostics and analysis of employee competencies. This means that the right teams can be put together according to the task at hand in a competence-oriented manner. To achieve this, the company and its work culture needed to change radical-ly. Teamwork requires self-reliant employ-ees who work flexibly with all members of the team. The performance of individuals and teams is now continuously measured using suitable KPIs; the annual appraisal interview is history. Performance meas-urement systems are linked to feedback and survey systems. Companies are well aware that only if they continuously ana-lyze their employees‘ strengths and plan their careers accordingly will they be able to retain them in the long term.

4 Lifelong learning determines the

everyday working life of every

employee

Because the HR department can concen-trate more on employee development than before, the learning culture in companies has changed dramatically. Instead of tradi-tional frontal teaching, new individualized learning methods have emerged – such as innovative eLearning platforms, mi-cro-learning offerings, gamification, pod-casts or short videos, which can be viewed at any time on the move. In this way, com-panies motivate their skilled personnel to take control of their own continuous fur-ther development.The advance of so-called MOOC platforms (Massive Open Online Course, e.g. edX, SAP or Udemy) has also been unstoppa-ble. A lot of high-quality internal content is being created via smartphone, for example tutorials for the maintenance of production facilities. In addition, Virtual Reality (VR) and Augmented Reality (AR) are offering new cost-effective and location-independ-ent learning opportunities.•

»In dynamically changing companies, the HR department needs transparency about available and usable competencies.«

CFO at a German manufacturer of optical systems

2 Electronic personnel files,

self-services and cloud solutions

reduce the HR department‘s

workload

Personnel files have been digitized through-out the process and thus enable the auto-mation of many administrative tasks that were previously handled manually. Via self-services, employees can access many HR processes non-bureaucratically and autonomously, such as attendance and absence planning, sick leave or travel ex-

penses. This frees up the HR department to concentrate on strategically important aspects, like recruiting, employee develop-ment and organization. As a result, the HR department can become a true business partner within the company.Furthermore, cloud-based platforms are gaining ground, gradually replacing com-panies’ own on-site systems. The cloud is a simple and inexpensive alternative to in-house software, that was often expensive, cumbersome and not updatable.

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Our recommendations for HR professionals

Successful digitization and digital transformation are decisive for the future viability of companies throughout the world. This applies in particular to HR work, which today is still anything but digital. New work or job sharing, however, cannot be represented without the efficient use of HRTech. Below, we give some recommendations for action in this area, that have emerged from our analysis:

1

Digital HR is a strategic competitive advantage

Companies need to recognize that HR is a major contrib-utor to value creation, and they have to drive digitization in human resources. It is essential to develop a long-term HR technology strategy that integrates cloud-based ERP platforms, applications, reporting and tools for AI, bots and other solutions.

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Cloud technology is also a competitive factor for HR

The prerequisite for the sustainable operation of HR soft-ware is an upgrade of the core technology: legacy sys-tems need to be replaced by an integrated cloud platform and a solid digital infrastructure. Compared to legacy systems, the cloud enables simple scaling as the com-pany grows or evolves. In addition, new functions can be tested and activated in the shortest possible time. Cloud applications also mostly offer defined interfaces for con-necting further applications, allowing the company to eas-ily assemble the right application portfolio.

3

Algorithms and user-centric software make employ-

ees more productive in the new world of work

Companies need to deploy intuitively operable solutions that offer everything from a single source, or which ag-gregate the different system landscapes in order to mini-mize effort for employees and maximize acceptance and productivity. The best way to select the right software is to set up a digital HR team that tests new solutions based on AI, VR or Chatbot technologies in order to implement innovative services for recruiting or further professional development within the company.

4

Innovation and agility in human resources are deci-

sive for the success of the company

Innovation will also become a core strategy for human re-sources – which is why HR should adopt agile methods. Many HR teams already use methods such as Design Thinking or hackathons to identify the needs of ”their“ users – i.e. employees and managers – and to respond to them in the best possible way. •

»Advancing digitization will force a paradigm shift. To realize the full potential of digital models, companies need to become more agile in a short period of time, open up their networks and develop joint business models that, if suc-cessful, will bring added value and additional benefits for everyone involved.«

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WHEN IT’S TIME TO ACT –

WORLDWIDE.

GLOBALISE.COM

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LISECall us!

Dr. Harald Linné, CEO and Member of the Executive Board at globalise company Atreus, [email protected]: +49 89 45 22 49-200

Dr. Christian Frank, Director and Member of the Executive Board at globalise company Atreus, [email protected] Phone: +49 89 45 22 49-180

HR between digital transformation and the new world of work

Digitization and digital transformation in human resources must be aligned with the goals of the organization. This calls for long-term meas-ures that require intensive discourse with all participants and should be implemented iteratively. There will be no fi nal state in which HR becomes merely an IT service that can be handled on a smartphone. Rather, constant adaptation to our way of life, the talent market and competition will enable a more productive, effi cient and healthy work-ing environment.Let‘s discuss this together.

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