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What it takes to operate as a true digital HR function

Jason Averbook, Mercer
Jason Averbook
With a career that spans over two decades in HR and technology, Jason Averbook is senior partner and the Global Leader of HR Transformation at Mercer, where he also is a leading figure in the firm's global generative AI strategy and services. He is the author of two books on the future of HR and HR technology. From 2018 to 2023, Averbook was co-founder/CEO of Leapgen, a company committed to shaping the future workplace. He also serves as an adjunct professor at universities worldwide, has held senior roles at industry giants such as PeopleSoft and Ceridian and is frequently quoted by top media outlets.

As HR leaders navigate through this digital age, strategic HR technology investments have become more critical than ever to drive true business outcomes. All organizations are facing increasing pressure to save money and optimize efficiency. Given that, HR departments are being asked to adapt to the rapidly evolving digital landscape and prioritize their technology investments accordingly. By aligning these investments with the function’s strategy and the company’s overarching goals, HR leaders will be able to demonstrate how such investments can help HR become a digital-first function.

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One of the primary challenges facing HR leaders today is the persistent presence of siloed Center of Excellence (COE) structures. These specialized teams, while valuable in their respective areas of expertise, often lead to a fragmented approach to technology adoption. This results in a disjointed digital experience for employees, as well as potential inefficiencies. To address this issue and drive cost savings, HR leaders must take proactive steps to break down these silos and foster a culture of collaboration.

Collaboration: crucial to cost savings, efficiency gains

By adopting a holistic, digital-first approach to HR and digital strategies, as well as working across COEs and other business functions, HR leaders can develop a cohesive digital ecosystem that enhances the employee experience, supports the organization’s overall objectives and eliminates redundancies. Investing in technologies that facilitate cross-functional collaboration and data sharing can help HR create a more unified and efficient digital environment. This ultimately leads to cost savings through streamlined processes and interactive journeys.

To support those goals, HR leaders must recognize the growing importance of generative AI in 2024 and prioritize investments in this area. As these technologies become more sophisticated, they offer significant potential for cost savings and efficiency gains. They automate routine tasks, enhancing decision-making and the employee experience. HR leaders should work closely with IT to ensure that the necessary infrastructure and data-management practices are in place to support successful AI implementations while also focusing on developing the skills and capabilities needed to leverage these tools effectively.

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To demonstrate the value of these digital investments and their impact on cost savings and efficiency, HR leaders should establish clear metrics and KPIs that align with the department’s prioritization of areas to be great at versus performing. By truly prioritizing HR tech investments on key business outcomes, HR leaders will position themselves to better justify further investments in the future.

Shifting the mindset toward strategy

Now more than ever, HR leaders must approach technology investments with a long-term, strategic mindset versus an approach based on “shiny object syndrome,” which focuses on digital solutions that deliver sustainable cost savings and efficiency gains. By developing a multi-year technology roadmap that outlines key priorities and milestones—and regularly reassessing and adjusting these plans based on changing business needs and technological advancements—HR leaders will ensure their investments are aligned with the department’s aspirations and the company’s overall direction.

It is crucial for HR leaders to ensure that the entire HR function is operating with a digital-first mindset. This means that all HR processes, from recruitment and onboarding to performance management and employee development, should be designed with digital technologies at the forefront. By embracing a digital-first approach across the entire HR function, HR leaders can create a seamless and efficient employee experience, streamline processes and drive cost savings.

This mindset shift requires a cultural change within the HR department, where all team members are encouraged to think digitally and continuously seek out opportunities to leverage technology to improve their work. By fostering a digital-first culture, HR leaders can position the HR function as a strategic partner in driving the organization’s digital transformation.

5 steps to drive digital HR success

To validate their position as digital leaders, HR leaders should take the following actions today:

  1. Conduct a comprehensive audit of their current HR technology stack to identify gaps, redundancies and opportunities for consolidation and optimization.
  2. Engage with business leaders and key stakeholders to align HR technology investments with the organization’s overall digital strategy and business objectives.
  3. Develop a clear and compelling business case for HR technology investments, emphasizing the potential cost savings, efficiency gains and impact on the employee experience.
  4. Foster a culture of continuous learning and upskilling within the HR function to ensure that team members have the necessary digital competencies to leverage new technologies effectively.
  5. Establish a governance framework for HR technology investments that ensures ongoing alignment with business priorities, regular performance monitoring and continuous improvement.

In the face of the challenges and opportunities presented by the digital age, HR leaders have a unique opportunity to step up and become true drivers of organizational success. By embracing a digital-first mindset, breaking down silos and harnessing the power of emerging technologies like generative AI, HR leaders can transform their function into a strategic powerhouse that delivers true business value.

Those HR leaders who rise to the occasion and are willing to take bold action and lead with vision and purpose will not only secure their own futures but also help to shape the future of work itself. In a world where change is the only constant, it is the HR leaders who adapt, innovate and inspire who will truly thrive.

So let us seize this moment, let us be the change we wish to see and let us lead our organizations fearlessly into the digital future that awaits us. The time for action is now, and the power to transform lies within each one of us.