Impact of Digitization on HR Services and Processes

Introduction to Digitization in Human Resources 

Digitization in HR services is of utmost importance to an organization. It is a critical and strategic function that aims to optimize the workforce to meet business goals. The HR functions and processes have been evolving with advances in technology, changing consumer behavior patterns, and increasing globalization of markets. Digitization is one such phenomenon that has recently transformed HR practices by bringing greater efficiency and productivity at lower costs. 

What is HR Digitization? It is the process of converting information into a digital format. Digitization has many advantages, including easier access and retrieval, lower cost, faster communications, and increased security. It is utilized in all human resource processes to increase efficiency and streamline operations. 

Recruitment and selection are two of the most important areas of human resource processes. It is often the first step in the recruiting process and a critical part of employee onboarding. The digitization of recruitment and selection can be done by integrating systems that allow for more efficient sourcing, screening, and candidate tracking, such as ATS (Applicant Tracking Systems) or CV/Resume databases. 

Another area where digitization is used is in training and development. This can be done through the use of eLearning platforms or by developing a Learning Management System (LMS). An LMS can be set up so that users can access various types of content (such as written materials, videos, and interactive games), which they can access anytime from anywhere. 

Impact of Digitization on HR Services and Processes 

  • Cost Reduction:  

HR digitization has resulted in significant cost reductions for organizations. The use of smart systems and applications can reduce overall human resource costs by more than 10%. In addition, it also helps organizations achieve greater efficiency in their operations, which would otherwise not be possible without digitization. 

  • Improved Efficiency:  

Digitalization in HR makes it easier for companies to hire employees who match their specific skill requirements compared to traditional hiring practices where employers rely on resumes or interviews. With digitized recruitment processes, companies can hire candidates who fit well with their culture and are best suited for the role they are applying for, thereby increasing productivity while minimizing employee attrition rates. 

  • Increased Productivity:  

Human resource processes increase employee productivity and enhance customer satisfaction. Customers want businesses that provide them with better services at competitive prices instead of having high-quality products that might be priced higher than competitors. 

  • Enhanced Customer Service:  

Companies that have adopted digital HR solutions have been able to improve their customer experience by providing faster responses via chatbots or automated phone calls when there is an issue raised at any time during the day rather than waiting until later to get answers from someone who may not even know what happened yet due lack of transparency & visibility into company systems’ information flow within different departments such as sales/marketing etc. 

  • Improved Security:  

By digitizing and automating processes, companies can increase the security of their data by making it more difficult for hackers to access confidential information. This is especially important in industries like healthcare, where any breach of privacy could result in people losing their lives if they are not treated adequately or on time. 

  • Improved Data Analysis:  

With the help of digital HR tools, companies can easily access and interpret data to make better decisions that will improve their overall performance. For example, managers can clearly see how the company is performing overall by looking at metrics such as employee engagement levels or absenteeism rates. 

Advantages of Digitization of HRM Processes 

Digitalization in HR processes is also advantageous for companies in the following ways: 

  • Flexibility, cost-effectiveness, and efficiency: Digitization allows HR leaders to quickly adapt their business processes to changing market conditions. This is why digitized businesses are better able to respond quickly when new technologies or trends emerge. 
  • Reduction in paperwork: Digitization reduces the paperwork required by employees and managers throughout various parts of the HR process, from recruitment through training and development to payroll administration. It also reduces errors in human data entry, which can be costly for employers if not caught early enough. 
  • Improved data accuracy: With digital tools, you can collect accurate information more easily than ever before, making better decisions based on facts instead of assumptions or guesswork.
    For example, if you have a recruitment process that involves multiple stages (i.e., advertising, attracting applicants, pre-screening). In that case, knowing how many people applied for each role and which ones were most qualified can be challenging. With the right digital tools in place, you can easily track this information and use it to inform future recruitment strategies—such as targeting specific types of candidates in specific locations based on their previous experience or qualifications. 
  • Enhanced communication: By using technology to streamline HR processes, you can free up time for employees and managers to spend on other important tasks. For example, if a new employee has just started and needs training in their first week on the job, it’s much easier for them to access online training modules than have a long face-to-face meeting with HR about why they need training.
    The same goes for managers; they can spend less time on administrative tasks associated with employee files and more time developing their staff. A well-designed HR system also allows you to communicate important updates instantly and easily, which helps reduce the risk of confusion or miscommunication. 
  • Improved quality: When you use technology to streamline human resource processes, it can also improve the quality of your data. This means that when you recruit new employees or perform annual evaluations, your information will be more accurate—which means better decisions and happier employees. 
  • Reduced costs: The more time you spend on administrative tasks, the less time you have for other things. This can lead to higher stress levels and lower productivity overall. By using technology to streamline human resource processes, you can save money by reducing the need for unnecessary meetings and phone calls from employees or managers asking questions about their files. 
  • More efficient: When you have a well-designed HR system in place, employees can view their files and communicate with managers more easily. They don’t have to worry about losing paperwork or forgetting important information when they’re filling out forms or requesting time off. 

Downsides of Digitization of HRM Processes 

  • Lack of trust in digital data: Many people are still skeptical about the accuracy of the information stored in digital media. They fear that the data may not be trustworthy and reliable, especially when it comes to sensitive personal information like name, address, age, marital status, etc. 
  • Lack of awareness about the benefits of digitization: Most organizations need a clear idea of how they can benefit from digitalization or automation in HR processes. They think that they will incur extra costs while implementing these new technologies without realizing that being a part of digitization is actually more cost effective than traditional methods, such as manual processing or outsourcing services to third-party vendors at an expensive price point. 
  • Lack of knowledge on how to use technology effectively: Organizations cannot fully use the available technology because their employees do not have adequate skills or training needed for their work objectives. This leads them towards choosing automation over human resources, resulting in job losses rather than hiring new people for various roles within an organization’s framework.  
  • Automation is a very useful tool, but it can also be a double-edged sword: When used correctly, it can help companies save money and increase their profits. If used incorrectly, automation can result in job loss and other negative outcomes. In order to avoid these negative consequences, companies must carefully consider how they use automation. They should also ensure that their employees are adequately trained with technology to transition into new roles within the company as needed. 
  • Subjectivity loss: Managers are usually provided with detailed information about employees’ credentials, certifications, and degrees through human resources management systems, so they may be tempted to promote employees based on system-provided information rather than their own opinions. When evaluating an employee’s potential to contribute to your company, supervisors may be discouraged from getting to know them personally. Despite their measurable capabilities, computers can only give you a partial picture of what is really going on. 


Digitization has had a significant impact on HRM processes and services. The workflows, processes, and other functions of the Human Resource department are increasingly becoming digital with the help of technology. The process of digitization is expected to increase in the future, too, as it helps organizations manage their business better by improving productivity. If you want a future-proof career in HR, then the Certificate Program in People Analytics & Digital HR is the perfect choice for you. It is an IIM Indore-certified course made for next-gen HRs offering the best of knowledge designed and delivered by industry experts and world-class faculty.

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