- DHBW Lörrach and hkp//// group publish second study on the state of digitalization of the HR profession
- The biggest obstacle is no longer the budget, rather the lack of digital literacy
Results of the study "HR drives digital"
Frankfurt am Main, August 14, 2019. HR organizations have caught up with digitalization but are not yet active as digital drivers in companies. The main obstacle to digitalization is the lack of digital literacy in HR departments, but also among managers in companies in general.
These are the main findings of the study "HR drives digital", which was carried out jointly by the management consultancy hkp/// group and Duale Hochschule Baden-Württemberg Lörrach (DHBW) among 136 personnel decision-makers and companies from various sectors in the German-speaking region.
The study focuses on the identification of HR's digital maturity. Three groups were identified: digital progressives, a large middle field and some lagging behind. The majority of personnel departments can be found in the middle field. "Compared to our last study, digitalization in HR has progressed significantly," notes hkp/// group Senior Manager Leon Jacob. "Although HR is not always actively engaged in digitalization in companies, the potential to become an active initiator of change is there," Jacob remarks confidently.
In addition to the lack of digital skills, the study also identifies generational differences as a major obstacle to digitalization, in the sense of a lack of willingness to change within the workforce. Other obstacles include a lack of budget, poor cooperation with the IT department and a lack of digital infrastructure.
"Digitally advanced HR functions are characterized by a good relationship with the organization’s IT function. Digital progressives outperform their peers in staffing and resource allocation, show better process and customer orientation and have a greater desire to use new methods and technologies. This is precisely what gives HR departments a positive reputation in their companies," explains hkp/// group Partner Holger Jungk. Overall, the study distinguishes nine so-called "drivers" that determine digital maturity. "The digital progressives are investing in all drivers, making use of the full potential of digitalization," says Jungk.
Key findings from the study
1) Digital skills
One of the main findings is the urgent need for digital skills: in order to actively promote digitalization, HR functions must be able to train HR staff and recruit those with the necessary knowledge. This includes in particular the handling of data, IT skills and the ability to identify digital opportunities. Lack of digital skills, both within HR and among executives in general, are identified by participants as a key obstacle to digitalization. In the previous study from 2016, a lack of budget allocation was identified as major issue. However, this development is not surprising, says Prof. Dr. Uwe Schirmer, DHBW Lörrach: "digitalization needs new skills and competences on the part of HR staff. The further development of its own staff and skills is crucial to reward investment in new HR applications."
2) Customer orientation and user-friendliness
The study shows that the champions of digitalization have a clear focus on customer orientation and user-friendliness. They also empower their managers and employees and provide automated workflows, reports and platforms that can be used as self-service. At the same time, they ensure a high level of transparency of HR management decisions and processes. In these organizations, HR is perceived as a driver of digitalization.
3) Infrastructure and organizational framework
A solid digital infrastructure is the basis for all further digitalization, the study concludes. This includes first and foremost the availability of appropriate hardware and software, but also corresponding platforms, as well as Micro Apps and HR Analytics. However, the requirements go beyond the technical framework and include at the very least the necessary operating agreements. Insa Martens, co-author of the study and hkp/// group Consultant explains: "Businesses must ensure the right organizational framework. This includes the constructive involvement of company participation and the conclusion of the necessary operational agreements. The results of the study show that the number of operational agreements increases significantly with digital maturity."
4) New technologies
Many HR departments are already benefitting from the advantages of new technologies: algorithms select applications, chatbots perform tasks in the Shared Service Center or during initial candidate contact, augmented or virtual reality applications simulate job-specific experiences in the selection process. The study shows that such a strategic approach to new technologies and the piloting of new solutions also increase the perception of HR as a driver of digitalization.
However, the study also identifies a clear need for action as almost a third of the companies do not yet deal with technologies such as those just mentioned. Moreover: "the results of the studies show that most of the processes in HR management are not yet digitized", says Prof. Dr. Michael Lindemann, DHBW Lörrach. "One in ten companies is still not using a digital solution for application management. The digital coverage of most other personnel processes is about 50 percent," Lindemann said.
Human resources departments on the right track
The study "HR drives digital" shows both the digital progress and the clear scope for HR digital optimization. Compared with the results of the "HR goes digital" study from three years ago, it suggests that digitalization has started to accelerate in the HR environment. HR is increasingly recognizing its critical role in the digitalization of companies. Now, however, is the time to take action: by adapting skills profiles, empowering managers and employees, and by intensifying and collaborative cooperation with the IT function.
Background on the study
The study "HR drives digital" is a joint project of hkp/// group with the Duale Hochschule Baden-Württemberg Lörrach. In an online survey, HR experts and decision-makers from a total of 136 companies of different sizes and sectors from the German-speaking region took part. The evaluations were carried out on the basis of a series of statistical procedures such as factor and cluster analysis.
A summary of the study results can be requested informally at info@hkp.com It is also available for download on hkp.com: www.hkp.com/article/HRdrivesdigital.
About the hkp/// group
The hkp/// group is a partner-led, international consulting company. hkp/// Partners are accomplished transformation consultants and respected leaders of innovation in HR. They advise large and medium-sized international corporations as well as start-ups with whom they develop tailor-made and practical solutions. hkp/// group partners all have many years of international consulting and business experience. They are recognized in the market as experts for executive compensation, board services, performance & talent management along with HR strategy & transformation, HR & compensation benchmarking. Our partners are regarded as competent contact persons by regulators and boards of directors, board members and senior executives, as well as HR managers and specialists. With over 700,000 data on remuneration from over 60 countries and all industries, hkp/// group is one of the leading providers of compensation comparisons. In the area of executive compensation alone, we offer access to compensation data for 20,000 people in over 3,000 European companies (boardpay.com).
About DHBW Lörrach
Duale Hochschule Baden-Württemberg is the first dual, practice-integrating university in Germany. Founded on March 1, 2009, it continues the dual principle of the former Berufsakademie Baden-Württemberg, which has been successfully operating for 40 years. The DHBW's organizational structure, which is based on the US State University system, is unique in Germany, with central and decentralized levels. At its nine locations and three campuses, DHBW, in cooperation with over 10,000 selected companies and social institutions, offers a variety of nationally and internationally accredited Bachelor's courses in the fields of economics, technology and social services. DHBW also offers integrated and in-service Master's courses. With currently more than 34,000 students and more than 141,000 alumni, DHBW is the largest university in Baden-Württemberg. At the Lörrach site, the Bachelor's degree program BWL Human Resources Management is offered and the Master's program MBM Personal and Organization is scientifically managed.
Contact Thomas Müller, mobile: +49 176 100 88 237, email: thomas.mueller@hkp.com
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