The hidden costs of not digitalising HR

New research by SD Worx shows that 58% of European companies admit they still have a long way to go in offering their employees a stellar digital experience. What’s the rush, right? Well, as it turns out, taking it slow or not digitalising at all comes with plenty of hidden costs. We’ve lined up 7 for you.

For years, building a strong digital workplace was a daunting task. Immature technologies, confusing IT standards, complex integration, and a lack of straightforward software tools were to blame. Without a PhD in IT management or deep pockets, digitalisation was almost always an uphill battle.

Luckily, this is no longer the case. Many technology partners now deliver HR tech that is easy to understand, highly affordable and offers benefits to all stakeholders: the business, HR and your employees. But there’s another compelling reason to go digital sooner rather than later: the hidden costs of not going digital. Indeed, keeping things ‘as is’ costs you more than you think.

Managing transactional HR tasks, such as payroll, core HR, and time and attendance, is often complex and time consuming. And while you burn all your energy getting every single detail right, you leave more value-adding tasks (e.g. revamping your L&D program) to ‘when we have time’. Well, with automation technologies, you can free up time for yourself. Time you can use to really make your employer brand stand out and give your (future) employees more attention. No wonder, nailing operational excellence is the first stage of every digitalisation journey.

Your employees, particularly the younger generations, have become addicted to user-friendly apps in their daily lives, such as Netflix, Spotify and TikTok. If you fail to offer the same consumer-grade experience with your digital HR, you’re likely to push them away. Indeed, optimising the usability of your digital tools, from intuitive interfaces to mobile friendliness, can make or break your HR digitalisation journey. This is also known as Stage 2 in building a strong digital workplace.

Compliance with tax, employment and privacy legislation is top of every HR team’s priority list. A single mistake can result in heavy fines, correctional costs and a damaged employer brand. The tricky part is that legislation changes all the time and differs from country to country, and sometimes even from region to region. Why not save yourself the stress that comes with compliance management by relying on HR tech with automatic updates?

In times of economic uncertainty and labour shortage, fostering growth, engagement and productivity in the workplace should be a no-brainer. The right digital tools can help you with that. Think about learning and development (L&D) programmes, well-being and skill mapping apps, collaboration platforms, onboarding tools, employee-listening software and so on. They empower your employees to become the best version of themselves, leading to increased output and, thus, revenue. This is also known as Stage 3 of the digitalisation journey.

Your HR department holds large volumes of sensitive information – be it confidential details about the organisation or personal information about the employees. It’s next to impossible to control the access to that information with a manual system. And yes, digitalisation opens the door to possible cybersecurity issues, but if you choose your HR tech provider wisely, you’ll be able to benefit from built-in privacy and data security measures. You’ll no longer have to worry about the loss of strategic information or severe penalties.

Open communication is at the heart of every successful organisation. Even more so when you manage a hybrid workforce. Why? The most committed employees are often those who have a clear view on the organisation’s direction. They’re in the loop and feel a strong sense of belonging. If not, they’re more likely to move on to another employer, in which case you’d face significant costs to fill their shoes. One thing’s for sure, with a digital HR ecosystem, you can reach your entire team in a matter of seconds, wherever they may be.

Creating a connected digital ecosystem – the last stage in the digitalisation journey – can save you days of manual work to collect, cleanse and aggregate data. No more cumbersome spreadsheets and complicated formulas, but a single set of accurate data to work with. Moreover, many integrated systems have built-in reporting and analytics tools, adding to the business intelligence capabilities your HR team has to offer. This all results in smarter, more data-driven decisions to, among other things, optimise the use of your budget.