HR and Rewards are experiencing a technological transformation, but it will require a transformation in HR skills too. Get it right and companies can expect to maximize ROI for technology and also mould their HR departments into strategic business partners, writes Ken Charman is CEO of uFlexReward

The technology revolution that is currently underway in HR could be totally undermined if HR practitioners do not have the skills needed to make the most of new digital solutions.

With digital transformation expected to strongly impact all areas of HR from the nature of work, the future skills required for an organization's workforce, to the delivery of reward, we are at the cusp of significant, even transformative changes. However, understanding how specific digital solutions address the individual requirements of your organization is vital. Even more important though is the need to ensure you are putting these technology solutions in the hands of HR and reward leaders that can make the most of them.

This will require a transformation in HR skills that is just as significant as any technology investment. Get it right and organizations can expect to not only maximize ROI on the technology but also mould their HR departments into ones that are strategic business partners responsible for significant impact on the company's bottom line, and also with the analytic capability to understand and make sense of a greater degree of data in the future.

The HR Technology Revolution Is Upon Us

Organizations are investing more than ever in HR technology as vendors develop solutions that incorporate a range of innovative technologies. A range of trends are emerging, including the shift from engagement to productivity in core systems, the use of Artificial Intelligence (AI) and the significance of gig workforce management.

Apart from AI, another key area of innovation in this sector is HR analytics, which relates to the area of productivity. This emerging trend is a methodology for creating insights on how investments in human capital assets contribute to the success of an organization. This is done by applying statistical methods to integrated HR, talent management, financial and operational data.

Tech Solutions Without Data Skills Are Pointless

While these solutions and the results they produce will sound very tempting to Chief Human Resource Officers (CHROs), companies should tread carefully in their vendor selection process.

The most important first step is to identify what the company really needs, rather than be sold the benefits of a particular technology. Practitioner-led solutions, which have been built and are maintained by professionals with real HR industry experience, are usually the best option for organizations that don't fully understand which solution fits their needs.

This consultative approach shouldn't end with sales and onboarding either. The best practitioners will understand the importance of upskilling HR teams to make the most of the new technology that should become a fundamental part of an HR employee's job.

Data science skills will play an increasingly important role within organizations that invest in the new wave of HR technologies, as these organizations look to make the most of their investments. That means having intellectually curious people who can interrogate and interpret the data, deciphering where it has come from, what it tells them and what the anomalies are.

Once the skills are in place within the HR team, the next area ripe for distribution is rewards. So much of HR analysis is linked to productivity, attraction, motivation, and retention which are all linked too, and very dependent on the reward. Yet, the traditional reward model of fixed structures and pay ranges within an organization does not easily lend itself to the adaptability and flexibility the future 'digital workforce' will require.

The absence of any system capable of consolidating and analyzing global reward data, on a granular, employee-level, is a data gap that needs to be resolved, especially for global organizations that require consistency in rewards across functions and countries.

Data-Driven HR Will Power Organization Transformation

The benefits of this upskilling will not be limited to making the most of new technology either. By introducing data science as a core skill within HR departments, organizations can change their employees from people managers to business strategists.

The HR professionals of the future will be advising organizations on everything from pay ratio adjustments and cost-effective locations to borderless workforces. This will be possible because they are able to act on the data at their fingertips, developing interpretable models and explainable analytical results that win over the confidence of key decision-makers.

This type of technology transformation within HR departments may seem like it's a long way off for some organizations, and achieving this change alone could feel like a major success. However, once that first milestone has been passed, it cannot be a one-off event.

The technology skills of today are attainable for anyone wanting to transform their career but these skills are also finite in their relevance. In fact, the half-life of a technology skill is thought to be just two years. Therefore, individuals will need to constantly refresh the ones they have, even if they have only just been learned.

This will result in a bigger emphasis on relevant skills as opposed to years of experience when deciding how valuable an employee is, particularly as the open marketplace for global talent expands. While such changes will affect all aspects of work, HR departments that are able to change their practices now, molding themselves into data-driven, skills-based teams, will be able to lead this change across organizations.

Ken Charman is Chief Executive Officer - uFlexReward. The above article is an edited version of the original published earlier at https://www.hrtechnologist.com