Transactional to Transformational HR: The Role of Technology

These are interesting times for HR departments. Recruiters are struggling to find qualified talent while low worker engagement and high turnover rates are making retention a constant struggle for HR. At the same time, many organizations are restructuring themselves in order to accommodate an increasingly remote workforce. Cloud, artificial intelligence, and other technologies are also radically changing how organizations operate.

These shifts in the business world have forced HR departments to reevaluate their roles in the organization and consider a more transformational approach to HR. But while many organizations are looking to switch to a more transformational HR structure, they struggle with executing this goal. In this post, we will look at how technology can help organizations make the change from transactional to transformational HR.

A Shifting Landscape for HR

Transformational HR is a concept that has been gaining steam and has pushed many organizations to reevaluate certain roles due to technological advancements and a changing business climate. Whereas HR has traditionally been considered more transactional in nature (by simply addressing whatever needs were brought to it), organizations are now questioning how HR can be more strategic and help drive business outcomes.

The Many Hats of HR

A big part of taking a transformational HR approach is reevaluating roles so that they align with modern best practices. In other words, thinking of HR professionals less in terms of traditional terms like “recruiters” and more in terms of business enablers. Some of the roles that modern HR professionals are expected to fill include:

HR as Data Analysts

Instead of simply responding to the needs of the organization as issues come up, HR professionals need to be more strategic. Organizations that have learned to tap into the wealth of data that has sprung up thanks to digitization are better able to attract and retain top talent. Moreover, they are better able to forecast hiring needs.

HR as Collaborators

Whereas HR has traditionally maintained a certain distance with other departments in an enterprise, many organizations are actively breaking down such silos. By taking a transformational approach, HR professionals work more closely with others in the organization to help achieve their goals. Practically speaking, this means that HR departments are making more of an effort to understand business operations, existing challenges, skills and expertise gaps, etc. These insights allow HR to make better decisions when it comes to things like hiring and policy-making.

HR as Business Drivers

Organizations succeed or fail thanks to their employees, so HR’s role in finding and retaining talent has always been essential (even if some don’t always see it that way). To stay competitive, HR professionals need to see themselves as contributors to the organization’s bottom line. They need to know what the organization’s goals are and how they can help see those goals realized. 

Switching from Transactional to Transformational HR

Making the switch to transformational HR comes down to a change in processes, mindset, and technology. Of these three things, technology is really the starting point of an HR transformation, as it provides organizations with the tools they need to collect and analyze data, set key performance indicators and goals, and break down department silos. By transitioning to a global human capital management platform, organizations get the tools they need to change from transactional to transformational HR.

These tools make transformational HR possible by:

  • Providing HR with the data necessary to analyze, forecast, and make informed decisions. Having all HR functions consolidated into a single platform that is used throughout the enterprise ensures that data is accurate, which customized dashboards can help translate that data into meaningful metrics that even HR professionals without experience in data analysis can understand.
  • Helping employees to help themselves. A centralized solution encourages self-service HR, which allows employees to perform a number of basic HR functions themselves. By eliminating a lot of small, everyday tasks, human resource personnel have more time to focus on strategy.
  • Automating basic HR functions. As with self-service HR, automated workflows reduce HR’s workload, freeing up time for initiatives that will have a greater impact on the bottom line. Automation can assist with virtually every aspect of human resources, from recruiting and onboarding to succession planning.

According to the Society for Human Resource Management (SHRM), approximately 69% of HR professionals polled said that executing standard HR processes effectively and with limited resources was a major point of concern. Since most HR departments struggle with finite resources, transitioning to a more transformational HR approach can seem like a pipe dream for many. Cloud HCM suites give organizations the time and resources necessary to be strategic, which, in turn, allows them to be much more competitive.

To learn more about how cloud technologies can be used to transform your organization, download our eBook: 6 Value Drivers for Finance and HR Transformation Success.

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