Why people management will influence business performance more than ever

While our thinking in this space can often be technology-led, the human factor is just as important. Digital transformation is a tricky juggling act, involving technology, people and processes. Most businesses are in the early stages of digital transformation, and proven techniques for managing digital projects and workplaces are scarce.

One thing is clear though. The successful enterprises of the future will be those that manage to fully integrate both the digital and human dimensions, redefining how people, processes and technologies are expected to work together and the outcomes they need to deliver.

Empowering digital leadership

There is strong evidence that some organisations may be underestimating the impact of the digital world we live in and the frustration caused when this does not extend to our workplace – what is simple in one’s personal life, such as booking a flight or buying something from Amazon, can be wrapped up in bureaucracy and delays at work.

What is equally true is that no matter how smart your technology, or how big your data, digital transformation will only succeed if employees support it and have the right skills and experience for their job − both now and in the future.

As business becomes more digitalised, HR departments will increasingly become managers of talent, spending more time identifying and predicting which skills and experience are in demand and, critically, helping employees chart their optimal career path through the organisation.

But what happens when your most experienced staff or those with critical knowledge or skills leave the company? What’s the impact on your immediate business or longer-term strategies if you lose those people? And how can those essential resources be retained?

With increasing competition for people with high potential and critical skills, organisations will also need to equip leaders with tools and approaches to be able to immediately acknowledge outstanding contributions and performance.

Winning the war for talent through retention and development

Keeping staff trained, motivated and ready for the new ways of working will become increasingly important to all organisations. Some skills will be so new that in many cases they will be immature or will be very rare. This puts business strategy at risk if companies are unable to attract or develop these new or niche skills.

All of which underscores the importance of HR developing and driving the digital talent plan. Fundamentally, they need to have a continuous plan for what the business requires and how to attract the needed talent, a learning framework to develop or augment skills, engagement and retention initiatives that adopt innovative and collaborative techniques to make the workplace highly appealing, and reward and recognition programmes to recognise the impact employees are making.

Real-time information, continuous improvement

Cloud-based HR software (such as SAP’s SuccessFactors) can track interaction with employees, providing continuous feedback to help managers tailor training to their employees’ needs. Improved training and feedback can make employees feel more motivated and help them to perform better.

Businesses that embrace digital technology will create an open work culture of personal improvement using a blend of apps, structured training, mentoring and continuous feedback, rather than the (often dreaded) annual appraisal.

The frequency of feedback employees want from their leaders can vary with age. Research conducted by Oxford Economics indicates two-thirds of young workers expect informal feedback from their managers every month, while 51 per cent of older employees want quarterly or annual appraisals. Open and transparent communication can be analysed in real time and quickly acted upon, increasing people performance.

Integrating humans and machines

Digital technologies can make us smarter and more efficient. However, while machines are great at handling laborious and high-volume tasks without making mistakes, they lack one important characteristic: the empathy factor.

As an example, transactional or repetitive work currently takes up about 50 per cent of our working time on average. With the help of AI, people will have more time and mental energy for in-depth collaboration, relationship-building, qualitative decision-making and creativity– crucial factors for future-proof success.

As examples, AI algorithms could collect detailed information about potential candidates from various sources and identify the people most likely to join – and stick with – your company. In the near future, chatbots may be effective enough to conduct initial interviews, or even provide biometric or psychometric analyses of candidates’ responses to interview questions. Machines can be immune to bias, stereotypes and preconceived notions, making them useful in screening settings.

Driving change

HR departments remain vital to the success of any digital transformation project and digitalised workplace. They are best placed to understand employees’ motivation, skills and ambition and hence facilitate the optimum balance between people and technology. These departments themselves are changing and preparing for the future. They are introducing and fostering new ways of working and new roles to reflect the new digital businesses they are growing into, developing new skills and new systems to be able to support their organisations and its people going forwards.

In order to be as effective as possible, organisations will require highly integrated, people management systems that can highlight issues and trends, to help manage the human element of business plans, but equally attract, develop, reward, engage and retain talent. Only by getting this balance right will organisations be able to effectively drive results and achieve business objectives.