Dive Brief:

• "World-class HR organizations" achieve more than other HR operations by spending 26% less, relying on 32% fewer staff and embracing digital transformation, according to new research from The Hackett Group. The IT service management firm said the adoption of digital technology could help HR departments reach world-class status in fewer than five years and see progress in less than two years.
• Study results showed that top tier HR organizations are better at developing people and moving them into new roles; two-thirds of open managerial positions at these organizations were filled by internal candidates. The Hackett Group said world-class HR departments contain an estimated 33% fewer transactional employees and 34% fewer staff dedicated to employee lifecycle activities.
• Among the study's takeaways, authors found that world-class organizations use digital technology to improve the customer experience, develop analytics capabilities, transfer resources from low- to high-value initiatives, and provide expertise and insights to business leaders. Use cases include recruiting, compliance, staffing services and outsourcing.

Dive Insight:

It's not surprising that top-performing HR leaders are leveraging digital technology to improve the efficiency and effectiveness of their operations and lower costs. HR leaders know the value of digitizing the workplace and are ready to make that happen, but many say they lack the resources needed to make the transition.

Digitalization requires a sizable initial outlay of funds, but overall savings may offset the initial costs, The Hackett Group said in its analysis. Digital transformation isn't an option; organizations that aren't onboard will be left unable to compete for talent, retain and engage staff, and stay agile during a challenging labor market.

World-class HR leaders understand the need to provide other business leaders with HR data and insight affecting their operations. This technology-based capability demonstrates HR executives' knowledge of the business and financial sides of an organization, which can seat them alongside other C-suite executives and shore up employee trust in HR programs.