Technology's Contribution to Transformational HR


Strategic HR, or transformational HR as we like to call it here at ISG, is a strategic approach to human resource utilization that goes beyond the traditional HR model. As you might expect, technology plays a crucial role.

Within the framework of transformational HR, the HR department is no longer merely administrative in nature. It becomes an active partner with all the other teams within an organization, a partner capable of helping align HR strategies with business strategies to drive organizational growth.

However, transformational HR is stunted when HR technology isn't up to the task. Older technology that does not integrate well with business processes not only fails to contribute to organizational growth, it also holds growth back.

Saving Money but Little Else

The 2023 ISG Survey on Industry Trends in HR Technology and Service Delivery clearly shows that organizations are benefiting from the cost savings HR software-as-a-service (SaaS) offers. In fact, 87% of the surveyed organizations report saving at least 10%. Approximately 20% report saving 40% or more.

Saving money on HR software is important. Unfortunately, only 46% of the surveyed organizations say they have achieved clear business value by adopting HR SaaS technologies. In short, their SaaS platforms are saving money but doing little else. That is not enough in a transformational HR environment.

The Focus on Business

If the whole goal of transformational HR is to leverage the HR department as a partner in driving business forward, there needs to be some sort of focus on HR's business impact. Remember that we are talking about a strategic partnership here. HR leaders collaborate with the organization's business leaders to develop goals, understand challenges and put the right people in place.

What is technology's role? Among other things, it is to facilitate data-driven decisions. The HR department should be using data and analytics to track initiatives and demonstrate value propositions. Their analyses provide business leaders with critical information.

Improving the Employee Experience

Driving organizational growth requires employee buy-in. Without employees being on board, even the most sound business decisions have no traction. Once again, transformational HR boosted by the right technology is key. HR deploying technology to invest in an organization's workforce can encourage the necessary buy-in in multiple ways:

  • Offering employees opportunities to learn and develop new skills
  • Fostering career growth opportunities
  • Encouraging employees to take ownership of their work
  • Creating a culture of accountability
  • Improving the employee experience through better onboarding, career development and future exit

A good example of technology that improves employee buy-in is a cloud-based, self-service portal through which employees can manage their benefits, schedule time off, interact with upper management and more. Self-service empowers employees to take control of their interactions with the company on multiple levels.

Embracing Automation

Finally, technology assists transformational HR through automation capabilities. Automating routine tasks frees up HR staff to invest their time in more value-adding tasks. For example, automating time and attendance means having more time to develop employee training programs.

Automation also tends to reduce the likelihood of disruptive data errors. Automated data entry improves accuracy and compliance. It mitigates the need for checking data manually and correcting errors, so HR staff can concentrate on more important tasks that add value.

An organization's HR technology should offer cost-saving benefits. But it should do so much more. HR technology should contribute heavily to a transformational HR philosophy. If you would like to know more about implementing transformational HR or the role technology plays in doing so, contact ISG. We help organizations drive operational efficiency and growth through a new approach to HR.