Changing Role of HR in the Digital Era and Expected Impacts on Business

Abstract

Digital transformation is already changing the traditional business models, including human resource management (HRM) practices in organizations, as the technology is globally setting new norms and business conduct toward connecting people with measurable, accessible, and data-based processes in firms targeting real-time information, accuracy, and speed for improving operational excellence. Human power being an asset for companies makes the role of HRM more critical in the digital era due to high competition and changing customer behavior, provoking the need for more innovative solutions to differentiate in global markets. In that spectrum, talent acquisition and retention become vital factors to long-term success. Today, as a part of digital transformation, digital HRM is also a concept evolving in organizations, which should be a part of the company strategy in terms of its infrastructure and HRM stakeholders’ competency accelerating the cultural change for a digital mindset in the total organization. Tools like predictive analytics and data mining not only provide data-based insights for HR stakeholders, speeding up the HR processes, but also give the opportunity for utilizing time on more strategic initiatives. Empirical and theoretical studies present the correlation of HRM with firm performance, productivity, and profitability. In parallel, the global environmental, social and governmental (ESG) requirements underlining the essence of decent work and economic growth encourage HRM to position itself with the strategic role to lead sustainable organizations. Once the digital ethics and HRM skillset competency are completed, the digital HRM is expected to expand and be grounded in organizations aligned with the companies’ overall digital transformation strategies.