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Creating Value with Digital HR

Talent Has Gone Digital, but How About HR?

The on-going digital transformation brings new challenges and opportunities. After stabilizing, improving and fine tuning core HR, we see a new wave within HR; innovation and adoption to the new paradigm. To take the lead and win the game, HR leaders must understand the demographic, technological and societal shifts - and prepare themselves accordingly. They also have to make sure to have a toolset that supports the transformation. The Future of HR is in the Cloud.

Creating Value with Digital HR

  1. 1. Transform to the power of digital Creating Value with Digital HR Sharing insights Jan Brouwer, SVP HR Transformation Stockholm – November 5th, 2015
  2. 2. Copyright © 2015 Capgemini Consulting. All rights reserved. Digital HR enables organizations in reaching their vision to deliver a digital organization and connectivity on a global scale 2 Focus on Digital Global  Business is a global ecosystem and the organization uses scale to create synergies Local  All Business is Local oriented: Customers, Brands, Services and regulatory & commercial environments. Connecting  The organization connects people to people, people to communities, and people to information. Empower  They empower their people through the existing business model Key questions to answer Typical Vision & Current Digital Transformations questions at organizations  The organization believes that Digital can deliver significant benefits to their organization How to enforce the organization with HR to setup a digital culture- and management style that drives the digital transformation How to attract, retain and grow digital talent on a global scale How to make HR a digital best practice case for the organization showing the cost efficiency- and employee benefits that it can bring
  3. 3. Trends in HR Which opportunities need to be captured
  4. 4. Copyright © 2015 Capgemini Consulting. All rights reserved. Key HR Trends Europa Leadership development and employee engagement are the key HR trends in Europe, given the current challenges faced in terms of demographic shifts and talent shortages 4 Global HR Trends and Challenges European HR Trends and Challenges Key sectors - Challenges Global HR Challenges Global HR Trends  Globally, the key factors resulting in challenges for the HR are: - Demographic shift - Technology Shift - Globalization - Social, political and regulatory shifts  Though some of these factors pose challenges to the HR in Europe, the current economic scenario poses are major challenge in terms of cost and productivity - Pressure on cost reduction - Managing productivity and profitability - Demographic shifts - Talent Shortage Europe HR Challenges Europe HR Trends 0 10 20 30 40 50 60 Training Workforce planning/talent… Performance management Leadership development Engagement/retention 0 10 20 30 40 50 60 Workforce planning… Succession planning Performance management Engagement/retention Leadership development HR Challenges & Trends  Decreasing STEM graduates  Ageing workforce  Employee turnover  Shortage of workforce  Retaining and recruiting top talent  Incorporating regulatory changes  Digital skill gaps  Employee turnover Manufacturing Retail Financial Services TelecomSectors Source: Capgemini Consulting: HR Trends July 2014
  5. 5. Copyright © 2015 Capgemini Consulting. All rights reserved. Driven by changing business demands and enabled by digitalization the operating model of HR needs to change Operational HR design trends HR Organizational challenges  Locally based while supporting a global organization  Lowering cost and improving added value  Being data driven and employee focused  Partner of the business while being ahead of business  Providing standardized services and personal service  Enabling digital transformation while going though digital transformation The HR business partner role HR business partners on all levels in organization No HR business partners Functional expertise Center of expertise on every HR area New CoE’s Commodity activities Own shared service centers Digital  Focus on centralization of commodity HR activities  Moving from outsourcing to Self-service for all standardized transactional processes to reach the ‘digital’ stage  Automation of the HRBP operational role  Based on analytics CoE’s develop new policies and tools and advice the business managers directly  Development from HR specialists focused on functional areas to combined centers of expertise with other functional areas (e.g. finance) focused on situations (e.g. mergers and acquisitions) Organizational trends
  6. 6. Copyright © 2015 Capgemini Consulting. All rights reserved. Key digital trends across all HR functions Digital is paving it’s way in Talent Acquisition, Organization Development, Engagement and Operations which are the major cornerstones of a successful HR foundation 6  Hiring Strategy  Campus Relationship  Channel Management  Branding  Vendor Management  New Hire Touch Point  Training  Performance Management  Career Development  Leadership Development  Communication  Energizing Fun  Employee Development  Coaching Employees  Retention Programs  Compensation Management  R&R Programs  C & B Implémentation  Increase in usage of technology as a means of marketing  Integrated search and use of talent networks to enhance candidate sourcing  Advent of mobile technology and app based products enabling talent acquisition  Use of micro sites and videos to enhance candidate experience  Increase in investment towards SaaS in HR  Shift in HR from operational to strategic function through embedded analytics  Influx of mobile and decentralized employees  Use of social media to measure employee influence  Increasing use of gamification in leadership development  Shift towards “facilitated talent mobility strategy”  Using Accelerated Learning Methodologies in Training  Shift from training to integrated capability development TrendsHRPillars Talent Acquisition Compensation & BenefitsEngagementsTalent Management Source: Capgemini Consulting-Using Digital Tools to Unlock HR’s True Potential
  7. 7. Creating value with Digital HR Our Point of View
  8. 8. Copyright © 2015 Capgemini Consulting. All rights reserved. HR needs to become digital to attract, retain and engage talent in a digital world 8 - Job seekers are increasingly using digital channels and devices to search for jobs. - An organization’s presence across digital channels has a strong impact on job seeker preferences - Crowd sourcing enhances the accuracy of performance assessments by offering richer insights into an employee’s performance, which in turn enables a fairer appraisal - Digital technologies help organizations close the talent gap faster - Digital technologies enhances the efficiency of recruitment processes - There is a strong need for organizations to overhaul existing performance management processes and align them more closely with employee aspirations and entitlements. Since 45% of HR leaders believe annual performance reviews are not an accurate appraisal of an employee’s work - A strong employer brand plays a critical role in attracting and retaining talent in a competitive marketplace - Companies have to compete for the best talent with new categories of players - The talent war is manifest across the entire organization - Critical leadership skills among the employees need to be build internally to retain the high performers - Gamification boosts employee learning and development to successfully build critical leadership skills among its employees Digital HR challenges Digital enablers for HR Recruitment Employer brand Performance management Learning & development
  9. 9. Copyright © 2015 Capgemini Consulting. All rights reserved. Creating value with digital HR is based on several elements that collectively determines the success of the organization enabled by analytics 9 Leadership & culture o What is the impact of digital transformation on leadership style and corporate culture o What elements should be strengthened , and how do you ensure that this is translated into concrete working arrangements ? Operating Model o What is the HR Digital service portfolio that you are delivering to the internal customers o How do you organize around the digital service portfolio including the supporting IT architecture o How to optimize synergies but retain focus? HR Standardization & Digitalization o HR should move towards standardization and digitalization in the functional, low value adding areas in order to become a more strategic business partner Competences o Does the organization have access to all necessary digital skills and competencies concerning mobile, analytics , and social creation? o What kind of skills are you going to source or outsource Source: Capgemini Consulting-MIT Analysis – The Digital Talent Gap – Developing Skills for Today’s Digital Organizations Our Vision on Digital Organizations Necessary elements for effective digital HR enabled by analytics HR analytics
  10. 10. Copyright © 2015 Capgemini Consulting. All rights reserved. Competences  Realizing the organizations’ digital ambitions requires specific digital competences concerning mobile, social , creative and analytics  What competencies are already in the house, which to develop or what to buy or hire ?  Which types of collaboration or cooperation are interesting?  What does this mean for the HR strategy? Successful digital organizations are able to organize the right mobile, social , creative and analytics skills 10 Source: Capgemini Consulting-MIT Analysis – The Digital Talent Gap – Developing Skills for Today’s Digital Organizations Technical Talent Strong Understanding of Business Drivers Knowledge of Technical Underpinnings Business Professional Creative Analytics Social Mobile Clusters CAPGEMINI’S DIGITAL SKILLS FRAMEWORK Mobile Platform / UI design , technical knowledge, application development , cloud services and information security Social Brand strategy , social and community management , online etiquette and customer service and PR Creative Art direction , multi-channel design , copyright management, digital asset management Analyticss Collect , analyze and interpret large amounts of data “55% of Digital transformations fail due to lack of proper exertise” – MIT Our Vision on Digital Organizations With our Digital competence analysis we map missing digital skills in a short time
  11. 11. Copyright © 2015 Capgemini Consulting. All rights reserved. An optimal organizational structure represents the digital vision and ambition of the organization 11 Operating model  The top-level organizational structure should be a derivative of the online ambitions and goals  Based on the current and desired situation , we determine the optimal transition path , including any intermediate forms  Next we detail the different functional areas and roles based on the current organization and digital competences Digital Operating model archetypes “digital is just a new channel” “Digital is an integral part of the business” “the business is driven by digital” Digital as seperate department Digital as expertise Digital as strategic capability Our Vision on Digital Organizations “Organize the team in the department that is experiencing the greatest impact of the digital transformation” We have best practices that we use to accelerate the choice of organization
  12. 12. Copyright © 2015 Capgemini Consulting. All rights reserved. The transition to digital asks for a different type of leadership and culture in order to be successful 12 Leadership & Culture  Digital Successful organizations are distinguished by a high degree of open collaboration and breaking with traditional hierarchical management models and an obsession with the customer  How to get and keep the right people on board?  How to create a sense of need for change ?  How do you increase the rate of change ? Digital Leadership and culture requirements “77 % of digital transformations fail due to lack of a proper culture”- MIT Digital Culture elements  Open  Creative  Innovative  Expressive  Collaborative  Team player  Agile  Authentic CULTURE – is about values, attitudes, beliefs and behaviors that will help individuals perform as a group toward acceptance of the Digital Transformation Digitale Leadership competences  Enabler of autonomy  Agile decision maker  Connecting entrepreneur  Cultural aligner  Digital explorer  Innovative engager  Leader example Customers enter the heart of the organization Greater reputational risk Digital is personal Better decision making on big data Digital causes all at once Way of working is changing From owning to sharing Digital is always new Our Vision on Digital Organizations Key digital trends We use our leadership competency framework in the design of the new way of working
  13. 13. Copyright © 2015 Capgemini Consulting. All rights reserved. HR is moving towards standardization and digitalization in the functional, low value adding areas in order to become a more strategic business partner 13 HR Process simplification  Customer focus via integrated Business Partners  Functional and operational HR processes and policies are standardized  Outsourced Payroll  One Cloud solution to support the manager in his People Management activities and to support analytics  Maximum use of self service  Use of mobile and social apps to support data entry at the source  Expertise clustering around business themes and not HR themes HR Maturity Model “standardize and digitalize the low value adding areas” Our Vision on Digital Organizations Opportunities for the organization • Business driven (voice of costumer) definition of HR processes • Define clear accountability and KPI’s for end-to-end processes that distinguish between cost and value driven • Standardize processes for transactional work using re-usable process building blocks • Drive self-service by defining integrated functional requirements via customer use-cases • Define a agile HR organization build around key processes follow business changes With our HR operating model framework and HR best-practice toolbox we will guide the design of the future proof HR organization
  14. 14. Copyright © 2015 Capgemini Consulting. All rights reserved. Data Analytics and predictive modelling can add significant value to existing HR data and improve the company’s strategic advantage. 14 HR data analytics  HR data analytics is an evidence-based approach to smarter decision making by tracking past employee activities to predict future outcomes.  It’s the application of sophisticated data acquisition and business analytics techniques to HR data with an aim of correlating business data and people data  HR is known to all too frequently rely on trust and relationships instead of data to support it. The value of HR analytics Can you imagine all people decisions taken at your organization are based upon HR analytics? Our Vision on Digital HR Data driven strategies will become an increasingly important point of competitive differentiation. Level 1 Reporting analytics Inferential analytics Traditional HR Analytics Level 2 Predictive analytics Prescriptive analytics Level 3 Level 4 Present focus HR Analytics Maturity Model Companies are shifting towards predictive and prescriptive analytics to gain foresights on their HR areas… … but our experience reveals three root causes why it’s challenging to pave the way and make more value from HR Analytics. HR Analytics initiatives not linked to corporate strategy Analytic skills & information management not in place Technology is a driver, but also a burden 1 2 3  More accurate and impactful input for people decision making on board level  More business relevant HR interventions  Performance improvement of HR function  Connect on a personal level to understand what people really care about
  15. 15. Copyright © 2015 Capgemini Consulting. All rights reserved. Financial and Service quality benefits can be realized when Digital HR is implemented correctly 15 Benefits  Since showcasing financial benefits is crucial for gaining key stakeholder buy-in it is important to identify and quantify all key costs and benefits of the Digital HR transformation  Qualitative benefits are equally important in gaining buy-in and support, these benefits should be documented and referenced throughout the entire Digital HR transformation Digital HR Benefits “Quantitative & Qualitative outcomes is an area frequently scrutinized in the HR space, however HR Transformations have clear and measurable value add for organizations ”- MIT Digital HR Benefits Financial benefits  Consolidation of technologies  Legal Cost Reduction  Indirect savings from process improvements  HR Headcount reduction  HR Salary Reduction  Outsourcing  External Spend consolidation Service Quality Benefits  Enhanced HR impact on the Business  Lower cost and more effective service delivery model  Capability for global people management  Effective use of digital tools and streamlined technology Source: Capgemini Consulting-Using Digital Tools to Unlock HR’s True Potential With our proven approach we will track the benefits during the transformation