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12/02/2017

Digital Transformation - The People Dimension Pushing Workplace Evolution

Because the human side of the digital transformation process changes the way people work and interact with one another, HR practitioners can help integrate company-wide tech adoption by supporting “digitally ready” employees, so as to smooth the learning curve.

With more and more things in the workplace being digitised, organisations need to formulate a digital transformation strategy to help employees understand how technology can save time, increase profitability, and as a result, help improve their career prospects without necessarily making their skills obsolete.

Digital transformation is without doubt one of business world’s current hot topics. The process of digitisation extends beyond the use of information systems to a company-wide evolution process requiring a collaborative effort from all levels of employees and management. While organisations know that if they are to stay relevant, they have to embrace digital transformation, the way they execute their transformation, including how they factor in the “people” element, can make a big difference to the extent that they successfully achieve their transformation goals.

Given the amount of hype and rapid implementation of digital transformation, there is, not surprisingly, apprehension about the extent and speed of job losses and the number of career skills likely to become redundant. According to a 2016 report from the International Labour Organisation, approximately 56% of skilled workers in the Southeast Asia region are at the risk of displacement by digital transformation, robotics or artificial intelligence (AI) over the next decade or two. Paradoxically, digital transformation creates new jobs and requires new skills, helping to fuel a “talent war”, which in some cases coexists with a shortage of talent.

Understanding the big picture          

Often, the process and impact of digital transformation is misunderstood and underestimated, especially regarding the social impact in the workplace. Therefore, in the face of change, it is important to identify and be aware of the possible implications as organisations adopt and employees adjust to new business models. As digital transformation strategies are implemented, the HR function needs to be able to provide social support to employees in order to maintain an agile and resilient workforce. It is important, for example, that the level of “digital appetite” and acceptance is established to help employees take ownership of the changes they face. To assess the social impact and refine the support needed to keep employees engaged in the transition, HR teams should evaluate employees’ perception and set up online hubs to share best practices and foster cross-pollination. Providing an opportunity to discuss and express opinions is a useful way of gauging feedback and building a sense of engagement.

Support in different forms

Performance management – The performance management process should be reviewed to focus on continual performance improvement, enhanced collaboration and transparency between different seniority levels, as well as coaching initiatives that provide an immediate feedback mechanism.

Up-skilling and development – In the digital age, employee profiles need to possess agile attributes. HR should minimise employee attrition by investing in tailor-made employee digital development and transformation programmes. Programmes should be structured in a way that digital skills can be transferred across business functions, thus reducing the loss of talent.

Employee retention – It is important for the HR function to offer emotional support to employees to ensure they are comfortable with the changes digital transformation involves. This reduces the differences between digital-savvy millennials and older employees who may fear or resist the digital transition process.

Mobilise the team      

A structured framework with senior sponsorship, processes, and technology will not on its own lead to a successful digital transformation. Employee participation is also a core element for success. HR should act as the strategic driver to promote a digital culture across all levels of the organisation. This can be achieved by identifying “digital champions” across business units to convey the message of digital show-and-tell, share insights, and stimulate cross-discipline conversation. Creating opportunities for cross-discipline conversations also provides a good communication channel to collect and convey employee views to management. Initiating in-house incubator projects is another good way to foster innovation and retain talent. In this case, the HR function should ensure the personnel involved possess the abilities to project a positive image of digital transformation.

Specific support for middle-managers

In particular, digital transformation calls for thorough transition of the roles and responsibilities of middle managers. Significant changes need to be taken into account, anticipated, and supported when redefining these roles.

These range from their objectives to their remuneration structure. In fact, middle managers may find themselves especially vulnerable to technological and workplace disruptions. Often they find themselves in an awkward position between the need to be accountable and embrace change, or reject change and “let go”. To ensure middle managers are comfortable with the digital transition process, they can be offered tutoring and mentoring support as well as webinars and live training.

Challenges for Hong Kong

According to the 2017 Microsoft Asia Digital Transformation Survey, 66% of business leaders in Hong Kong agree that digitalisation is a key enabler to drive business growth, yet only 22% have a full transformation strategy in place. In spite of having a high level of awareness of digital transformation, the Hong Kong workforce often finds itself overwhelmed by the concept of digital transformation. As Asian culture tends to be more risk-averse than western cultures, the Hong Kong workforce is frequently emotionally unprepared and lacks the sense of urgency in adapting to digital change. Therefore, a key challenge for the HR function is understanding how to foster a change of employee mindset so that Hong Kong will be able to quickly catch up with global counterparts in Europe and the US.

To proactively tackle these challenges, the HR function should consider conducting a review of the workforce planning mechanisms to properly connect them to the company’s strategic objectives. A review for each current job position can establish the risk of disappearing over time and the ability to change and incorporate itself into the digital transformation business model. A workforce planning review is a useful process to identify individual and collective solutions such as the types of training needed, internal or external mobility, tutoring, mentoring.

Senior management endorsement

One of the major obstacles hindering a successful digital transformation is often a lack of a clear vision from business leaders. Business leaders should establish a well-defined transformation framework incorporating the overall business strategies, human capital requirements, transformation processes, and the degree to which they fit in with the associated technologies. A well-defined framework sets a clear direction in the transformation journey; it tackles and anticipates the resistance to change, and encourages company-wide participation in the transformation process. The HR function has a strategic role to play in helping to communicate the framework and direction to employees.

To embrace change, forward-looking organisations arrange transformation awareness seminars and implement digital up-skilling programmes. Start slowly, perhaps by introducing one or two digital awareness apps employees can use on their own mobile devices. These allow participants to develop the digital skills and know-how to strengthen their digital acumen. This type of proactive initiative can help prepare employees to face potential business disruption. It also helps them become aware of the personal and organisational opportunities digital transformation can deliver. Digital transformation will only flourish with a connected organisation, well executed strategies and a positive attitude to embrace future disruption.

*This article originally appeared in The Official Journal of the Hong Kong Institute of Human Resources Management and is reprinted here with their kind permission.

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