Faster data processing, more efficient communication and optimized processes – digital transformation has also reached human resources. In this blog post, we dive into the world of digitized HR together with an expert. We clarify their significance for companies and their employees as well as the associated challenges and future opportunities.
Our interview partner is Prof. Dr. Thorsten Petry, holder of the Chair of Business Management in the interdisciplinary Media Management program at the RheinMain University of Applied Sciences in Wiesbaden. His project and research interests focus on the topics of strategy, organization and human resource management – and the influence of digitalization on them. Prior to his appointment at the university, he was a strategy consultant at various well-known international consulting firms. As a management consultant, coach, speaker and trainer, he has been helping decision-makers in companies to structure and critically reflect on management trends and hypes for over 20 years.
1. Hello Prof. Dr. Petry, thank you for taking the time to talk to us today. We would like to start directly with the first question.
What do you mean by digitalization in HR or Digital HR?
This is an expression that can be interpreted in many different ways. I don't just mean that HR management is going digital, but I also have a broader understanding of "digitalization in HR" in this regard. For me, it's much more about preparing and converting the HR department for the digital age and positioning itself as a company in a contemporary way. This includes leveraging new technologies, but also adapting to rapidly changing and challenging environments.
2. You conducted a study entitled: "Benchmark Study on the Degree of Digitalization of HR" together with Prof. Dr. Biemann. What are the three most relevant results you'd like to share with us?
It is pleasing that the study shows that the topic of digitalization has arrived in companies and is seen as highly relevant in the HR sector. However, when it comes to practical implementation and satisfaction with the results, a different picture emerges: there is still considerable room for improvement. One aspect that can also be noted is that most companies only automate the HR processes that are already in place and do not ask themselves whether these processes make sense in this form or whether they could perhaps be adapted. In addition, often only "simpler" processes are tackled, although it would be worthwhile to work on more complex HR processes as well. The focus of companies is therefore more on costs and automation than on the new benefits and added value that could arise from the transition.
3. What do you see as the three biggest challenges for medium-sized companies in the field of HR digitalization?
According to the results of the study, the two biggest challenges for companies are lack of time and lack of staff. The two are related and can also be seen as a challenge. I see another challenge in strategic prioritization. In my experience, companies often take on too much, then realize that they don't have the time or the staff, and then implement little or nothing instead of setting individual priorities.
4. In which HR disciplines is digitalization already well advanced? Where is there still room for improvement? And why?
Recruiting in particular is very advanced, partly due to the urgency of finding new employees and partly due to the large number of providers in this area. This is followed by personnel administration. This is followed by a large gap. Strategic personnel planning, for example, scores worst, but personnel controlling and Personnel Development are also less advanced.
5. In your opinion, what framework conditions are needed for successful HR digitalization?
I distinguish between four areas that must be given for successful HR digitization. The first area I see is the human being. We need people who are adaptable, competent and willing to develop. I consider processes and structures to be a second area, with factors such as speed, agility and innovation playing a decisive role. Available and high-quality data is the third area, and its effective processing is crucial. The fourth area includes target-oriented key performance indicators, as a certain amount of controlling based on data and measurements is essential.
6. Digitalization in HR has also changed the demands placed on HR employees. What skills will HR employees need to have in the future in order to be prepared for digital HR?
I'm trying to highlight three competencies that I think are necessary to be ready for Digital HR. First of all, there is the attitude or mindset. Employees should want to develop further and ask themselves what else is new. You should therefore have a so-called "growth mindset". In addition, a certain technical understanding and the willingness to deal with technical topics are a great advantage. The third core competency I see is customer focus, an unreliable quality that all employees should possess.
7. What are the two biggest mistakes companies can make when it comes to HR digitization?
A common mistake is to put technology before benefits or effects. You should first analyze the problem and then develop or look for the technique to solve it. And the second big mistake is the prioritization problem, which I have already mentioned.
8. As the HR manager of a medium-sized company that is in the early stages of digitalization, which area would you prioritize first and for what reasons?
In any case, the first step is to carry out an analysis of the problem and then to prioritise it according to the available resources. In addition, it is advisable to review and rethink the existing processes and make adjustments if necessary.
9. What are your perspectives on the role of big data within HR digitalization? And how do you assess the opportunities as well as the risks that the use of generative AI in HR entails?
Basically, artificial intelligence needs data as a basis. Since there is hardly any other area in the company where more data is available than in the HR area, I see great potential in this. However, it must be taken into account that it is sensitive personal data. The important thing here is to find a reasonable way to use the data efficiently and at the same time not allow any individual conclusions to be drawn. The analysis and processing of data in particular can be efficiently processed and evaluated with the help of AI, although decisions should ultimately still be made by HR managers. In this context, it is crucial to critically examine the results and recommendations provided by artificial intelligence and to draw on one's own experience for a well-founded assessment. I am convinced that AI will gain a foothold in the HR sector, taking into account ethical and data protection issues.
10. What do you think about the use of chatbots in HR? To what extent can they generate added value in the area of HR?
Even though there have been some sobering examples of use in the past, I am convinced of the underlying technology and believe that the use of chatbots will increase significantly in the coming years. ChatGPT already illustrates the extensive potential of this technology. For companies that are able to access a dataset that includes standard questions from applicants and employees, and that have a carefully trained and comprehensively audited system, the potential for increased efficiency is enormous. With regard to future technological developments, I see clear advantages for the use of chatbots in the HR sector and I am convinced that they will prevail in the future if used sensibly.
Thank you very much for the interview Prof. Dr. Petry.
The interview was conducted by Alexandra Heubuch
Alexandra Heubuch is a business psychologist and has been working at Umantis for over 5 years. In her role as Lead Scientific Research, she cooperates with leading universities and colleges in the DACH region and supports the application of scientific findings in practice.
