In this series of articles, we will focus on three important aspects of Human Capital Transformation (HCT) in the era of digital transformation:
What is the Current State of HCT? What HR functions should you focus on now? What are the most successful companies doing right?
HR Benchmarking and the New Digital KPI: A conceptual view of key HR functions within the context of KPI for a future workplace.
Measuring Success: from implementation to employee experience and costs versus productivity gains how do you know your HCT initiatives are working?
Why HCT, and why now? In the midst of a global pandemic, job insecurity, and market volatility, is it really the best time to roll-out human-centered transformation?
Actually, it’s the ideal time. And digital transformation is playing a key role.
Human Capital Transformation: More Than A Catchphrase
Digital transformation, from an HR perspective, is primarily about cultivating “transformational mindsets” that focus on people and processes to optimize business performance, a.k.a. human capital transformation.
The primary HCT focus areas cover three broad categories:
Foundational Role: Employee Experience with HR
Payroll, benefits, vacation, performance, career progression, organizational communications
Transformational Role: Enterprise-wide Talent Transformation
Ensuring role-based training before, during, and after every digital transformation initiative
Transformational Role: Digitalizing the Workplace
Ensuring role-based training before, during and after every digital transformation initiative
About 52% of HR decision makers across industries define transformation as a revamped or holistic employee experience, which bodes well for a reinvention of how the business operates.
“Digital champions” – the category where we put the most successful HCM organizations – have an advanced definition of transformation in human capital, which allows 80% of these companies to be nimble and develop their workforces to stay ahead of the innovation curve in their industries.
Question: What best defines 'digital transformation' in the human resources function?
Source: Trasers
Copyright © 2020 Trianz
What Makes a Digital Champion in HCT?
In a series of surveys administered to 600+ leaders in HR across 20 industries worldwide, we asked them ‘what does digital transformation mean to your organization?’
Nearly half of leaders surveyed said digital transformations means revamping HR websites and portals, while the other half described transformation as a revamping of employee experiences.
The hard truth is that many companies have not yet approached HCT comprehensively, focusing too often on basic blocking and tackling. Here’s one way to look at the stages of HCT maturity, from most elemental to most evolved:
Copyright © 2020 Trianz
These capabilities allow digital champions to reinvent the employee experience to a point where 80% of learning and development is digital, allowing for quick training and updating of role-specific skills that are critical for any new models to succeed.
As the graphic depicts, the most advanced organizations prioritize human capital operations, acquisition, learning and development, communications, and digital work culture processes.
HCT is Happening Now
Cultivating a digital work culture and attracting, nurturing, and retaining talent are top priorities across management tiers and company types. Taking a cue from the champions, human capital operations are the next frontier of digitalization — to include payroll administration, health, and retirement benefits and other HR administration.
HCT is about making the life of your talent easier in every organizational engagement, helping everyone learn how the digital paradigm impacts their role and fostering a vibrant and communicative culture that extends across geographies, disciplines, and demographics. 
Most human capital functions are now trending towards end-to-end transformations to ensure a uniformity in investments across all human capital areas. HR leaders are planning to deploy datalakes, predictive analytics, and AI over the next two years through collaboration, communications, and remote workforces.
Enterprise-wide, companies will have to adopt these advances in their business functions at the pace that the technology is developing to keep up with customer desires and the competition. Most human capital functions, however, are still in the early days of adopting predictive analytics and dashboards across their operations.
In the next article we will investigate “The Future Workplace,” conceptualizing key HR functions and a new set of KPIs for the digital age.
