Digitization of the HR department of the future

HR remains below its potential when it comes to customer satisfaction and its own image. This is the result of the HR Service Experience Study 2021. But improvement is possible. An analysis of the study results shows how this can be achieved.

HR is changing. Many HR departments are in the middle of a journey from process-oriented administration of employees to human-centered services. The latter aim to support and empower employees to shape the changes that an increasingly complex, insecure and ambiguous world demands of them.

 

Goal: better service experience

A particular focus is on the questions of how and which HR services are provided, what consequences this has for the perception of these services and what is the status of the HR department’s image.

One key finding catches the eye: Employees and managers see significant room for improvement in HR and, in particular, their services. This dissatisfaction can be easily explained on the basis of our findings. It weighs particularly heavily in view of the fact that 45 percent of the surveyed HR employees state that it is an “explicitly formulated goal in their company to improve the service experience (employee experience) of employees and managers in contact with the HR department” .

Two service worlds: administrative and transformational services

But what are HR services anyway? Most of the respondents know the term, but understand different things by it. To prevent misunderstandings, they provided a definition in the survey: “We understand HR services to mean all internal processes that include both HR management processes and the support of important HR processes.”

They have thus outlined a range of services that encompasses services aimed more at compliance and process efficiency (hereinafter “administrative services”) as well as more strategic services aimed at the development of people and business (hereinafter “transformational services”). This shows that the administrative services dominate. The first eight places are completely occupied by services of this type. More strategically oriented, transformational services follow some way behind. The following applies: the smaller the company, the fewer transformational services are offered. Medium-sized companies are well behind larger companies.

In addition, the HR departments cannot really inspire employees with their services. Satisfaction is moderate and there is plenty of room for improvement – especially with regard to transformational services.

It is noticeable that the satisfaction of internal customers with the services offered increases the higher in the hierarchy the respondents are located. Conversely, the following applies: The level of satisfaction among employees without a management role is consistently below the average.

And something else weighs heavily: Interestingly, if not really surprising, people in HR usually rate employee satisfaction higher than it actually is. But there are also three services for which the opposite is the case. These are: “Determine and promote the commitment of employees”, “Organize and support talent management processes” and “Determine the future requirements for each position in coordination with the specialist departments”.

What to do now

What follows from this? What can HR departments and HR managers do in light of these findings? The study indicates possible causes and reveals three areas of action that are critical to success and in which satisfaction with HR and its services can be increased:

  1. Further digitize HR processes and make them more transparent.
  2. Offer more transformational services.
  3. Orientate yourself more towards internal customer groups.

 

Lever 1: transparency and digitization

Let us first take a look at the importance of transparency and the digitization of processes. Our analyzes show a clear connection between the degree of digitization, the transparency achieved in the process and the satisfaction of internal customers with the process. In a nutshell: the more digital a process is, the more transparent it is for internal customers and the greater their satisfaction.

But there is still room for improvement in the administrative environment, which is the foundation of human resources work. We examined this in more detail using five processes relating to the employment relationship. It was shown here that, especially when processing job references (only 40 percent of those questioned, internal customers rate the degree of digitization in their company as high), with legally compliant support for employment contract processes (39 percent) and with employee onboarding (34 percent) a particularly large amount of digital potential remains unused.

Lever 2: Expansion and improvement of transformational services

In order to increase the satisfaction with the personnel work in the company, another measure is necessary: to rely more intensively and in high quality on transformational services. As we have seen, there is still a lot of potential here. In addition, the more managers and employees in the company experience that HR services serve their well-being and further development, the more positive they are towards HR.

Naturally, this is not the case with administrative services that tend to follow legal requirements and the requirements of efficient processing. Administrative services are essentially a compulsory exercise and a hygiene factor – with them “nothing should wobble”. In contrast, transformational services have the potential to trigger positive emotions.

Lever 3: Get closer to the customers

Finally, the question remains about the gaps in the assessment of facts when we compare the HR sample with that of internal customers – and compare the perception of managers against that of ordinary employees. This shows that the higher the respondents are in the hierarchy (and this applies to top HR executives as well as to those of other departments or those at the top of the company), the more clearly their assessments deviate from those of the employees.

This gap has to be closed: How does HR want to improve the employee experience when, above all, those who determine the course have a significantly different view of the question of how things are going with the needs and satisfaction of internal customers? Listening more closely and seeing what the employees need and want is part of this. But a greater concern in general with the expectations and needs of employees at lower hierarchical levels is required if the satisfaction with HR in the company is to increase.

The good thing about it: With this agenda, HR would also do something for its image. That also leaves a lot to be desired, because the assessments of the employees are only just around the neutral central axis when evaluating opposing pairs of characteristics (for example “incompetent / competent”, “factual / employee-oriented”, “conservative / progressive”). In other words: the department does not succeed in creating a clear profile.

Also noticeable here: The upper managers have a much more positive and profiled image of the department and in particular of the person who heads it. This can be explained by the personal proximity of HR employees to top executives and personalized services for this customer group. If HR wants to score points across the organization, the department and its people have to move closer and more individually to the employees. Personalized and digitized services as well as individual advice and support are the key here.

Conclusion: progress is possible

If HR, on the other hand, remains a service provider who takes care of administrative processes in the general perception, satisfaction and image values remain mediocre even in the medium term. HR should become the area that accompanies people in organizations in their everyday work and development. The human-centered, individual transformational services in particular reduce the distance between HR and employees. They also ensure that companies adapt to change, conquer new markets and have people with the right skills in the right place.

Seen in this way, companies and employees alike benefit from HR developing in this way. The decisive factor is that administrative services must by no means be neglected, but must continue to be provided at the highest possible level. Customer orientation, degree of digitization and personalization are critical to success.

 

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