‘No HR’ HR: The New Operating Model in Human Resources

The 2022 Global Industrial Robotics Survey shows that 25% of capital investments will target automated systems over the next 5 years. As these investments and changes are affecting all industries and departments, companies must prioritize HR automation to stay competitive. Yet, many underestimate its value and the risks of manual HR processes, and do not realize the immense potential in terms of efficiency and cost savings. This article will show you how to approach setting up an automated HR department, which steps to take and where to start.

The Problem Statement

Non-functioning HR disrupts employee focus with administrative, often repetitive tasks like payroll, time reporting, and recruitment, which results in dissatisfaction of both employees and management. McKinsey projects “about 60% of occupations could have 30% or more of their constituent activities automated”, which will significantly alter the way today’s jobs are performed in the future. The goal is to implement an “invisible HR department” to reduce repetitive tasks, prevent errors. Additionally, it is accessible 24/7 and supports the company in empowering People Ops for strategic roles and in enhancing complex processes for better efficiency.

Latest Research Findings and Analysis

The first step to successfully implementing automation into your company’s HR department is to change the way you think about its function: as soon as you start viewing HR as a service that is supporting your employees, teams and management, you can define how it is supposed to look like, what SLA it is supposed to fulfill, and where it is needed the most.

The idea behind the service approach is to have any HR related process as seamless and smooth as possible to not interrupt the flow of the actual task or project. In HR terms, this means that every issue that could come up is anticipated and solved before one has to interact with the HR department. Additionally, each time someone does reach out, the issue is solved either immediately and automated or as soon and efficient as possible. The goal is to have HR so efficient and “invisible” that employees do not see the department anymore.

Data-driven decision-making is of utmost importance in identifying processes and tasks suitable for automation. Analyzing your operations to assess potential along a scorecard based on repetitive nature, data availability, impact and potential cost reduction leaves you with a comprehensive, prioritized list of steps that are your roadmap in this transformational change. A process should be prioritized if the automation costs are low, while repetitiveness and impact are high – especially if it is rather easy to implement. How each process ranks is of course highly dependent on existing HR and company structures as well as the overall strategy.

According to KPMG International, processes such as data management, payroll services or workflow administration are low-hanging fruits in a company’s journey towards HR automation, while complex talent processes such as total rewards and identifying the best candidate require a lot more invest. Finally, there are several processes which are less suitable for automation, as they center around strategic decisions and relations. However, even in those cases automation can play a supporting role in guiding the organization into the right direction. Additionally, the freed-up human potential can be leveraged for more strategic, creative, and value-adding tasks that are difficult/ impossible to automate by today’s standards.

A type of large-scale automation can be categorized as transformational change, which means that to guarantee a smooth transition, workforce preparation is a core requirement. Re- and upskilling employees to perform well with the new tools and in their new tasks and establishing a culture of continuous learning and adaptability paves the way to a low turnover rate as well as cost savings.

Once the roadmap has been decided and the first steps are taken, guiding the project to success becomes managements top priority. To begin, they should closely monitor the pace and direction of automation, and further decide where, when, and how much to invest in the changes. To make these decisions, executives must familiarize themselves with the financial aspects of automation, weigh the pros and cons of enhancing tasks with intelligent machines versus replacing them, and understand how these choices impact the development of human skills within their organizations. The extent to which executives embrace these priorities will not only affect how quickly their companies change but also determine whether their organizations become more competitive or lose their edge in the market.

How to overcome the main obstacles when adopting automation and AI in HR

Transformational change at this magnitude comes with several challenges.

  1. Lack of Knowledge
    Diving into automation and AI can be overwhelming at first, as there is an abundance of tools and initiatives one could look at and adopt. There is a high level of uncertainty and a high risk regarding cybersecurity and compliance, which is especially important in the HR department. On a non-technical level, companies face difficulties due to a lack of automation strategy or roadmap, which can cause management to start working on too many projects at once, effectively hindering fast execution and quick results.
    The Occam team is highly knowledgeable about the latest AI and automation trends and can help you not only identify the areas in your company with the highest automation potential, but conduct an in-depth analysis to create a detailed, prioritized roadmap that puts your mind at ease and allows us to get started right away. Our team of highly skilled HR and Automation experts can start fast and get the first results quickly.
  2. Lack of Resources
    Many companies struggle to allocate time or human capital to invest in HR automation, which leaves them stuck in a vicious cycle of having to spend their capital on humans executing mundane, repetitive tasks. Further, embarking on a transformational journey is always costly, especially if it is to implement new state-of-the-art technology in an area as close to the core of a company as the HR department.
    Occam will support you in finding the most suitable solution for you based on whichever criteria you decide is most important to you. Further, we not only give you a strategy, but help you in the implementation process. This makes for a smooth project trajectory and allows you and your team to focus on what you do best.
  3. Integration Difficulties
    Another, potentially quite costly, obstacle is the difficulty to integrate AI and automation into existing IT infrastructures. These architectures are typically historically grown and require a lot of effort to adapt to new technologies, especially if the company has tested digitizing parts of the HR department already.
    Part of Occam’s offering is the holistic assessment of the applicability and implementation potential of each automation initiative. In doing so, we take the existing IT infrastructure into account to put your mind at ease about automating your HR department.

Reach out to Occam today to see how we can help you overcome the challenges of HR automation.

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