Creating Value with Digital HR

Transform to the power of digital

Creating Value with Digital HR Sharing insights

Jan Brouwer, SVP HR Transformation

Stockholm – November 5th, 2015

Copyright © 2015 Capgemini Consulting. All rights reserved.

Digital HR enables organizations in reaching their vision to deliver a digital organization and connectivity on a global scale

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Focus on Digital

Global Business is a global ecosystem and the

organization uses scale to create synergies

Local All Business is Local oriented: Customers,

Brands, Services and regulatory & commercial environments.

Connecting The organization connects people to people,

people to communities, and people to information.

Empower They empower their people through the

existing business model

Key questions to answer Typical Vision & Current Digital Transformations

questions at organizations

The organization believes that Digital can deliver significant benefits to their organization

How to enforce the organization with HR to setup a digital culture- and management style that drives the digital

transformation

How to attract, retain and grow digital talent on a global scale

How to make HR a digital best practice case for the organization showing the cost efficiency- and employee

benefits that it can bring

Trends in HR Which opportunities need to be captured


Key HR Trends Europa

Leadership development and employee engagement are the key HR trends in Europe, given the current challenges faced in terms of demographic shifts and talent shortages

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Global HR Trends and Challenges

European HR Trends and Challenges

Key sectors - Challenges

Global HR Challenges Global HR Trends

Globally, the key factors resulting in challenges for the HR are: - Demographic shift - Technology Shift - Globalization - Social, political and regulatory shifts

Though some of these factors pose challenges to the HR in Europe, the current economic scenario poses are major challenge in terms of cost and productivity - Pressure on cost reduction - Managing productivity and profitability - Demographic shifts - Talent Shortage

Europe HR Challenges Europe HR Trends

0 10 20 30 40 50 60

Training

Workforce planning/talent …

Performance management

Leadership development

Engagement/retention

0 10 20 30 40 50 60

Workforce planning …

Succession planning


Engagement/retention

Leadership development

HR Challenges & Trends

Decreasing STEM graduates

Ageing workforce

Employee turnover

Shortage of workforce

Retaining and recruiting top talent

Incorporating regulatory changes

Digital skill gaps

Employee turnover

Manufacturing Retail Financial Services Telecom Sectors

Source: Capgemini Consulting: HR Trends July 2014


Driven by changing business demands and enabled by digitalization the operating model of HR needs to change

Operational HR design trends

HR Organizational challenges

Locally based while supporting a global organization Lowering cost and improving added value Being data driven and employee focused Partner of the business while being ahead of business

Providing standardized services and personal service Enabling digital transformation while going though digital

transformation

The HR business partner role

HR business partners on all levels in organization

No HR business partners

Functional expertise

Center of expertise on every HR area

New CoE’s

Commodity activities

Own shared service centers

Digital

Focus on centralization of commodity HR activities Moving from outsourcing to Self-service for all

standardized transactional processes to reach the ‘digital’ stage

Automation of the HRBP operational role Based on analytics CoE’s develop new policies and

tools and advice the business managers directly

Development from HR specialists focused on functional areas to combined centers of expertise with other functional areas (e.g. finance) focused on situations (e.g. mergers and acquisitions)

Organizational trends


Key digital trends across all HR functions

Digital is paving it’s way in Talent Acquisition, Organization Development, Engagement and Operations which are the major cornerstones of a successful HR foundation

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Hiring Strategy

Campus Relationship

Channel Management

Branding

Vendor Management

New Hire Touch Point

Training

Performance Management

Career Development

Leadership Development

Communication

Energizing Fun

Employee Development

Coaching Employees

Retention Programs

Compensation Management

R&R Programs

C & B Implémentation

Increase in usage of technology as a means of marketing

Integrated search and use of talent networks to enhance candidate sourcing

Advent of mobile technology and app based products enabling talent acquisition

Use of micro sites and videos to enhance candidate experience

Increase in investment towards SaaS in HR

Shift in HR from operational to strategic function through embedded analytics

Influx of mobile and decentralized employees

Use of social media to measure employee influence

Increasing use of gamification in leadership development

Shift towards “facilitated talent mobility strategy”

Using Accelerated Learning Methodologies in Training

Shift from training to integrated capability development

Tren

ds

HR

Pill

ars

Talent Acquisition Compensation & Benefits Engagements Talent Management

Source: Capgemini Consulting-Using Digital Tools to Unlock HR’s True Potential

Creating value with Digital HR Our Point of View


HR needs to become digital to attract, retain and engage talent in a digital world

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- Job seekers are increasingly using digital channels and devices to search for jobs.

- An organization’s presence across digital channels has a strong impact on job seeker preferences

- Crowd sourcing enhances the accuracy of performance assessments by offering richer insights into an employee’s performance, which in turn enables a fairer appraisal

- Digital technologies help organizations close the talent gap faster

- Digital technologies enhances the efficiency of recruitment processes

- There is a strong need for organizations to overhaul existing performance management processes and align them more closely with employee aspirations and entitlements. Since 45% of HR leaders believe annual performance reviews are not an accurate appraisal of an employee’s work

- A strong employer brand plays a critical role in attracting and retaining talent in a competitive marketplace

- Companies have to compete for the best talent with new categories of players

- The talent war is manifest across the entire organization

- Critical leadership skills among the employees need to be build internally to retain the high performers

- Gamification boosts employee learning and development to successfully build critical leadership skills among its employees

Digital HR challenges Digital enablers for HR

Recruitment

Employer brand


Learning & development


Creating value with digital HR is based on several elements that collectively determines the success of the organization enabled by analytics

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Leadership & culture

o What is the impact of digital transformation on leadership style and corporate culture

o What elements should be strengthened , and how do you ensure that this is translated into concrete working arrangements ?

Operating Model

o What is the HR Digital service portfolio that you are delivering to the internal customers

o How do you organize around the digital service portfolio including the supporting IT architecture

o How to optimize synergies but retain focus?

HR Standardization & Digitalization o HR should move towards standardization and

digitalization in the functional, low value adding areas in order to become a more strategic business partner

Competences o Does the organization have access to all necessary

digital skills and competencies concerning mobile, analytics , and social creation?

o What kind of skills are you going to source or outsource

Source: Capgemini Consulting-MIT Analysis – The Digital Talent Gap – Developing Skills for Today’s Digital Organizations

Our Vision on Digital Organizations

Necessary elements for effective digital HR enabled by analytics

HR analytics


Competences

Realizing the organizations’ digital ambitions requires specific digital competences concerning mobile, social , creative and analytics

What competencies are already in the house, which to develop or what to buy or hire ?

Which types of collaboration or cooperation are interesting?

What does this mean for the HR strategy?

Successful digital organizations are able to organize the right mobile, social , creative and analytics skills

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Source: Capgemini Consulting-MIT Analysis – The Digital Talent Gap – Developing Skills for Today’s Digital Organizations

Technical Talent

Strong Understanding of Business Drivers

Knowledge of Technical

Underpinnings

Business Professional

Creative

Analytics Social

Mobile

Clusters

CAPGEMINI’S DIGITAL SKILLS FRAMEWORK

Mobile Platform / UI design , technical knowledge, application development , cloud services and information security

Social Brand strategy , social and community management , online etiquette and customer service and PR

Creative Art direction , multi-channel design , copyright management, digital asset management

Analyticss Collect , analyze and interpret large amounts of data

“55% of Digital transformations fail due to lack of proper exertise” – MIT


With our Digital competence analysis we map missing digital skills in a short time


An optimal organizational structure represents the digital vision and ambition of the organization

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Operating model

The top-level organizational structure should be a derivative of the online ambitions and goals

Based on the current and desired situation , we determine the optimal transition path , including any intermediate forms

Next we detail the different functional areas and roles based on the current organization and digital competences

Digital Operating model archetypes

“digital is just a new channel”

“Digital is an integral part of the business”

“the business is driven by digital”

Digital as seperate department Digital as expertise Digital as strategic capability


“Organize the team in the department that is experiencing the greatest impact of the digital transformation”

We have best practices that we use to accelerate the choice of organization


The transition to digital asks for a different type of leadership and culture in order to be successful

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Leadership & Culture

Digital Successful organizations are distinguished by a high degree of open collaboration and breaking with traditional hierarchical management models and an obsession with the customer

How to get and keep the right people on board?

How to create a sense of need for change ?

How do you increase the rate of change ?

Digital Leadership and culture requirements

“77 % of digital transformations fail due to lack of a proper culture”- MIT

Digital Culture elements

Open

Creative

Innovative

Expressive

Collaborative

Team player

Agile

Authentic

CULTURE – is about values, attitudes, beliefs and behaviors that will help individuals perform as a group toward acceptance of the Digital Transformation

Digitale Leadership competences Enabler of autonomy

Agile decision maker

Connecting entrepreneur

Cultural aligner

Digital explorer

Innovative engager

Leader example

Customers enter the heart

of the organization

Greater reputational

risk

Digital is personal

Better decision making on big

data

Digital causes all at once

Way of working

is changing

From owning to sharing

Digital is always new


Key digital trends

We use our leadership competency framework in the design of the new way of working


HR is moving towards standardization and digitalization in the functional, low value adding areas in order to become a more strategic business partner

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HR Process simplification

Customer focus via integrated Business Partners

Functional and operational HR processes and policies are standardized

Outsourced Payroll

One Cloud solution to support the manager in his People Management activities and to support analytics

Maximum use of self service

Use of mobile and social apps to support data entry at the source

Expertise clustering around business themes and not HR themes

HR Maturity Model

“standardize and digitalize the low value adding areas”


Opportunities for the organization

• Business driven (voice of costumer) definition of HR processes

• Define clear accountability and KPI’s for end-to-end processes that distinguish between cost and value driven

• Standardize processes for transactional work using re-usable process building blocks

• Drive self-service by defining integrated functional requirements via customer use-cases

• Define a agile HR organization build around key processes follow business changes

With our HR operating model framework and HR best-practice toolbox we will guide the design of the future proof HR organization


Data Analytics and predictive modelling can add significant value to existing HR data and improve the company’s strategic advantage.

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HR data analytics

HR data analytics is an evidence-based approach to smarter decision making by tracking past employee activities to predict future outcomes.

It’s the application of sophisticated data acquisition and business analytics techniques to HR data with an aim of correlating business data and people data

HR is known to all too frequently rely on trust and relationships instead of data to support it.

The value of HR analytics

Can you imagine all people decisions taken at your organization are based upon HR analytics?

Our Vision on Digital HR

Data driven strategies will become an increasingly important point of competitive differentiation.

Level 1

Reporting analytics Inferential analytics

Traditional HR Analytics

Level 2

Predictive analytics Prescriptive analytics

Level 3 Level 4

Present focus

HR Analytics Maturity Model

Companies are shifting towards predictive and prescriptive analytics to gain foresights on their HR areas…

… but our experience reveals three root causes why it’s challenging to pave the way and make more value from HR Analytics.

HR Analytics initiatives not linked to corporate strategy

Analytic skills & information management not in place

Technology is a driver, but also a burden

1 2 3

More accurate and impactful input for people decision making on board level

More business relevant HR interventions

Performance improvement of HR function

Connect on a personal level to understand what people really care about


Financial and Service quality benefits can be realized when Digital HR is implemented correctly

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Benefits

Since showcasing financial benefits is crucial for gaining key stakeholder buy-in it is important to identify and quantify all key costs and benefits of the Digital HR transformation

Qualitative benefits are equally important in gaining buy-in and support, these benefits should be documented and referenced throughout the entire Digital HR transformation

Digital HR Benefits

“Quantitative & Qualitative outcomes is an area frequently scrutinized in the HR space, however HR Transformations have clear and measurable value add for organizations ”- MIT

Digital HR Benefits

Financial benefits Consolidation of technologies

Legal Cost Reduction

Indirect savings from process improvements

HR Headcount reduction

HR Salary Reduction

Outsourcing

External Spend consolidation

Service Quality Benefits Enhanced HR impact on the Business

Lower cost and more effective service delivery model

Capability for global people management

Effective use of digital tools and streamlined technology

Source: Capgemini Consulting-Using Digital Tools to Unlock HR’s True Potential

With our proven approach we will track the benefits during the transformation