Is HR equipped to cope with the demands of the digital future?

Technology has the power to define business success. It is, in essence, the basis on which the vast majority of the working world operates. Just 23% of the world’s businesses have no dependency on digital operations or products, according to data from AI Multiple. Yet, many businesses are comfortable simply relying on outdated and inefficient digital processes, despite the fact that fundamentally, these processes are the barrier to increasing efficiency and productivity.

Herein lies the case for digital transformation. Not at ‘some point’ in your business’ roadmap, but today. Every day that goes by, the technology that your people are using grows a little more out of date. That is, unless you’ve already undertaken a digital transformation. To the credit of our executives, Gartner reports digital transformation is an organisational priority for 87% of those in senior positions. 27% even went as far to say that their ‘survival’ relies on it.

And yet, according to Forrester data, a worrying 15% of surveyed companies have prioritised digital transformation. Similarly, according to Deloitte, 87% of businesses believe digital will disrupt their industry. However, just 44% believe that they are prepared for the disruption.

HR’s state-of-play

This is the state-of-play for the wider business world, but what about the HR sector?

There’s some good news, and some bad news. Today, HR departments are harnessing the power of technology, data analytics and digital solutions more than ever before to redefine their roles within organisations. Since the coronavirus pandemic, HR’s place within businesses across the globe has been shifting toward the centre, as orgs ascertain just how powerful utilising their workforce’s potential can be. This has led to an uptake in emerging tools; Forbes Advisor data states that 80% of businesses are currently using new HR technologies, having revamped processes within the past three years.

In addition, HR leaders are likely to be using at least two more digital solutions today than they were in 2019, which coalesces not just with HR’s shift toward providing the agility that businesses need, but also with the boom in investment within the HR space from many of the world’s biggest tech firms.

Yet, achieving successful HR transformation requires more than just adopting new tools—it demands a strategic approach tailored to organisational goals and a commitment to fostering innovation and adaptability.

From streamlining processes to enhancing employee experiences and leveraging data for informed decision-making, HR transformation offers a wealth of opportunities for organisations aiming to thrive in the current competitive landscape. Yet few are utilising the full potential that such transformation can bring.

Glassdoor research found that 36% of HR professionals currently believe they don’t have adequate technology to truly align with overall business goals. Just 33% of HR teams have reported usage of some form of AI technology, despite the fact that 83% of current AI adopters state that they’re seeing a positive return on investment, according to Deloitte.

What’s perhaps more worrying is the innumerable businesses currently relying on wholly out-of-date practices that compartmentalise the data they hold, potentially leave it vulnerable to prying eyes, render it useless or simply lost it altogether.

Whilst digital transformation and tech-enabled agility is directly linked to productivity and profitability, for many organisations throughout the world, the lack of correlating tools and technology mean that they’re always just one step away from disaster.