How smart is HR?

HR processes can be automated with technologies and tools. The intelligent networking of data promises additional added value. But HR needs a playground for this to try out. How smart is HR?

The term smart has long become standard vocabulary – many people have a smartphone or a smart TV, live even in a smart home . Often there is also talk of the Internet of Things, i.e. the networking of objects with software or sensors via the Internet. The smart home describes an intelligent house in which everything is virtually linked, interior lighting and the opening or closing of the blinds can be coordinated and the room temperature can be controlled via an app. The idea behind it: increasing efficiency for users with automated and intelligent processes. This approach can also be transferred to processes in the company – and to HR. The clever use of digital tools in personnel management comes with a great promise of value. Smart does not mean connected at the same time.

Smart processes play a role in areas such as production and logistics, says Christian Gärtner, professor of business administration with a focus on human resources management and the digitization of the world of work at Munich University of Applied Sciences. Using motion sensors on employees in warehouses or production halls, companies can record process cycle times. This reveals any idle times and provides information about the work density. Intelligent sensor systems can also be used for ergometry at the workplace – that is, to reveal the physical strain on employees. What REFA officers used to record in terms of work data can now be done by sensors, transmitters and machine learning analyze stake. Gärtner mentions another possibility of networked work, including error data from machines directly in training courses. During in-house training, for example, technicians can learn about problems that a machine reports in real time to a customer’s facility. So you learn on the current problem and not on possibly outdated training documents.

How Smart is HR?

For the scientist Gärtner, networking is just one dimension of smart processes. He sees the main focus in data analysis. This also applies in the context of HR work. Smart HR aims at automated and intelligent processes. There are plenty of applications and tools. But above all, the intelligent use of various applications challenges many people in the HR departments. “Networking IT systems is a sore point in HR,” says Gärtner. Most of the personal data are in fact in different systems. For example, the data from the applicant or skill management system can often not be linked directly to the master data or performance management system. HR has several data ponds instead of one large data lake. A data set for every employee that contains everything does not yet exist, even if some companies are working on it, says Gärtner. If there isn’t a big system, interfaces have to be built so that the different programs fit together and value-added data analyzes are possible. Basically, it is always about data quality, otherwise the networking of systems and data does little.

“The individual HR tools are silos,” says Christian Vetter, Managing Director at HR Forecast. In his role he deals with people analytics– In other words, analyzes that combine personal and business data in order to answer questions based on it. The applications of large software providers in particular are often self-contained and hardly allow the integration of external data. You have to bring data together and bundle them on one level. Those who integrate data channels well into one another have better options, says Vetter. According to him, however, many companies fail to realize that they only get a benefit by linking data. However, collecting data creates more transparency and a link makes it more usable for HR staff. It is of course obvious that personal data is sensitive data and that legal requirements and internal guidelines strictly regulate their use.

Vetter mentions the subject of skills as an example of the usefulness of linked data. Particularly in view of dynamic business areas, companies need to know which skills will be required in the future. In order to know what potential already exists and how it can be developed, HR managers need transparency. Using data analysis that link training databases with input from managers and employees, statements can be made about which skills will be important in the future. Vetter also advises not only to consider internal data, but also to include external data in analysis. By this he means, among other things, scientific evaluations, or analysis of job advertisements, which skills competitive companies require. A company can use this to derive valid future forecasts.

Digitization of HR

“Bringing data together is a hurdle, especially for smaller companies,” says Nadia Grötsch, managing director of HR consultancy Sieben Wunder and lecturer for digital personnel management at the Ernst Abbe University in Jena. She advises small and medium-sized companies on smart HR work. Small businesses often don’t even know how to use data and bring it together in a clever way, she says. The craft is still a long way off. In her experience, large corporations are sometimes far ahead in terms of the digitization of HR; modern tools for personnel management are currently finding their way into medium-sized companies. The majority of companies are thus somewhere between a group and a small business. But even if modern tools were used, networking approaches and data evaluations could not yet be discussed.

For Grötsch, digitization of HR means: removing administration by a machine so that HR managers have more resources for the social aspect of HR work. She does not see the digitization of HR as an end in itself. It’s about the effects behind it that companies expect from it. If the use of modern technologies is part of the standard for industrial companies, the question arises for a service company as to what benefits it expects to gain from it in the end. “Smart or big data is relevant when it supports decisions,” says Grötsch. It is particularly suitable for HR when the complexity is so extensive that you can no longer see the big picture.

Smart versus automation

In addition to skills, recruiting is also a topic for Smart HR . For example, some companies use chatbots to answer questions from job seekers in the first step of the application, says Managing Director Grötsch. In some cases, there is an artificial intelligence downstream that brings applicants together with the right position. A language analysis is also used to facilitate selection processes. Every company has to decide for itself whether an automated selection is desired.

Which other HR processes can be automated or are they suitable for the intelligent use of digital tools? The scientist Christian Gärtner differentiates between the automation of processes and the analyzes that make a process more intelligent. In this way, many processes can be automated along the HR value chain. This includes, among other things, offboarding via a standard report and exit checklist or small-scale processes such as travel expense accounting. One step further is the intelligent evaluation of data with which companies can assess the likelihood of termination or the development potential of employees. This could mean risk candidates an interesting internal offer must be submitted at an early stage.

Data analyst Vetter sees the automation of payrolli.e. leaving payroll accounting to a machine, as a way of saving time. This also applies to personnel planning and workforce management. He thinks it is smart if the HR function is upgraded and integrated into the business. So HR can take on a control and management function. You also need to think outside the box and have a strategic mindset. In his view, companies that master the interface between man and machine are particularly successful in the long term, not those that merely digitalize themselves heavily.

“The desire to be smarter alone is not enough,” says HR consultant Grötsch. HR needs a playground to try out new things and yourself. But often HR cannot get out of the hard work. For Grötsch, the main thing is that acceptance for digitization is anchored in the organization. The company management would also have to provide budget and resources so that HR can make a contribution.


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