Why Digital Transformation is No Longer Just an IT Priority

Digital transformation is reshaping every corner of business, and HR is no exception. While often viewed as a tech-led initiative, the success of transformation efforts hinges on people — behaviours, capabilities, culture, and leadership.

According to PwC’s 2024 HR Survey, 87% of executives say HR plays a critical role in shaping business outcomes through technology. And yet, McKinsey reports that only 30% of digital transformation efforts are considered successful.² What’s the gap? Often, it’s the lack of integration between technology and people strategy.

Enter HR — no longer a back-office function, but the driver of the organisational change needed to make digital transformation stick.

From Back Office to Strategic Driver: HR’s New Mandate

Today’s HR leaders are tasked with more than process improvement — they are responsible for aligning people and culture with digital business models. Modern HR isn’t just digitising payroll or automating benefits admin; it’s creating agile operating models, designing inclusive hybrid work experiences, and using data to make workforce decisions in real-time.

By integrating platforms like cloud-based HRIS, people analytics, and AI-enhanced recruitment tools, HR teams are becoming business-critical drivers of innovation and agility.

Culture: The Hidden Engine of Digital Transformation

No digital initiative will thrive without the right mindset. HR’s ability to shift culture is arguably its most powerful asset.

Driving a digital-first culture means fostering psychological safety, rewarding experimentation, and normalising continuous learning. It’s about embedding agility into leadership behaviours and ensuring that employees at every level are comfortable navigating digital change. HR plays a vital role in articulating this culture, coaching leaders, and codifying values that support transformation.

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The Skills HR Needs to Lead in a Digital World

To guide digital change effectively, HR professionals themselves need to upskill. The modern HR skillset includes:

• Data literacy – understanding people analytics and dashboards

• Digital platform fluency – mastering HRIS, LXPs, and automation tools

• AI awareness – using and understanding how tools like AI in recruitment or learning personalisation work

• Change management – leading people through uncertain, high-velocity shifts

• Strategic communication – storytelling with data and building the case for transformation

Unlock the Guide: AI in HR – The Practical Guide to Tools, Trends and Getting Started

Building a Digitally Fluent Workforce

HR’s role in transformation also means designing and delivering learning strategies that scale digital capability across the organisation.

Key actions include:

• Running digital skills audits and gap analyses

• Designing bespoke learning pathways with LXPs or microlearning tools

• Promoting peer learning and social collaboration

• Working with business units to co-own capability development

This is where the HR-L&D partnership becomes critical. L&D must align to transformation goals, not just offer generic training — and HR must ensure it’s embedded into performance and progression frameworks.

The Barriers: What Holds Transformation Back?

Common challenges include:

• Resistance to change from employees or leadership

• Legacy systems that don’t integrate with new tools

• Skill shortages and digital fatigue

• Lack of clear ROI measurement for transformation investments

Overcoming these challenges requires HR to play a central coordination role — aligning functions, communicating transparently, and building digital confidence across the workforce.

How HR Can Break Through the Barriers

Step 1: Build Change Leadership at All Levels

Equip leaders, managers, and HR business partners with change management skills. Train them to communicate digital initiatives clearly, manage resistance empathetically, and champion transformation from the front line.

Step 2: Modernise Tech Infrastructure Strategically

Don’t try to overhaul everything at once. Start by identifying quick wins — like automating manual processes or integrating HR systems — and gradually upgrade your tech stack to ensure compatibility and scalability.

Step 3: Upskill for the Future

Address skill gaps through targeted learning pathways. Prioritise digital literacy, data fluency, and adaptability across all roles — and partner with L&D to embed learning into day-to-day work.

Step 4: Foster a Digital-First Culture

Create a culture where innovation, experimentation, and collaboration are encouraged. Recognise and reward digital behaviours, and make psychological safety a priority so people feel confident using new tools.

Step 5: Use People Analytics to Show Value

Move beyond traditional HR metrics. Use data to link digital initiatives with business outcomes — such as increased engagement, reduced turnover, or faster time-to-hire — to build a clear case for continued investment.

(Explore: What is HR Analytics?)

Quick Checklist: How HR Can Lead Digital Transformation

1. Define HR’s Strategic Role

Align HR strategy with wider business transformation goals. Act as a central driver of agility, innovation, and people-focused change.

2. Drive Culture Change

Promote a digital-first mindset across all levels. Empower leaders to model new behaviours, encourage experimentation, and build psychological safety.

3. Upskill the HR Function

Develop digital capabilities within HR teams — including data literacy, platform fluency, and change leadership. Partner with L&D to embed ongoing development.

4. Build a Digitally Fluent Workforce

Run skills audits to identify capability gaps. Design targeted upskilling and reskilling programmes using digital learning platforms and microlearning.

5. Address Common Barriers

Tackle resistance through strong communication. Prioritise systems integration and focus on delivering quick wins through pilot projects.

6. Implement the Right Tools

Choose HR technology that aligns with your goals — such as HRIS, AI-enabled recruitment, learning platforms, and people analytics tools.

7. Align L&D with Digital Goals

Link learning initiatives to business outcomes. Embed continuous learning in the flow of work and tie it to progression frameworks.

8. Measure What Matters

Use people analytics to track the impact of transformation. Monitor engagement, retention, time-to-skill, internal mobility, and ROI.

Digital HR in Practice: The Tech That Makes It Work

Today’s digital HR toolkit is extensive. Depending on your organisation’s goals, this may include:

• HRIS platforms (e.g. SAP SuccessFactors, Workday) for unified people data

• AI recruiting platforms to streamline hiring and reduce bias

• Learning Experience Platforms (e.g. Degreed, EdCast) for skills development

• People analytics tools to predict turnover, inform workforce planning, and personalise experiences

But technology is just the means — it’s HR’s strategy that defines the outcomes.

Real-World Impact: Case Studies of HR-Driven Transformation

Let’s look at how leading organisations are putting these strategies into action:

Heidelberger Druckmaschinen AG (Germany)

Facing structural market changes and advancing digitalisation, Heidelberger Druckmaschinen AG partnered with Deloitte Germany to overhaul its HR management. The initiative aimed to digitise and standardise HR processes across global operations, replacing manual systems like Excel and paper-based records. Workshops were conducted to understand data complexities and to implement a unified, transparent HR system that facilitated global HR reporting and personnel cost planning. ​

Communicorp UK

Grace Orr, Director of People at Communicorp UK, transformed HR operations by implementing an AI-enabled payroll platform from Employment Hero. This shift reduced payroll processing time from one to two days to just an hour per month. Beyond payroll, the AI system enhanced hiring, onboarding, probation check-ins, and feedback processes, leading to improved employee engagement and more consistent performance reviews.

Unilever

Under the leadership of Leena Nair, Unilever’s Head of HR, the company embraced digital tools to adapt to post-pandemic work environments. Initiatives included virtual onboarding processes and the implementation of AI in recruitment to enhance efficiency and reduce bias. Unilever also focused on reskilling employees to ensure a future-ready workforce, aiming for all employees to have future-fit skill sets by 2025.

Measuring Success: Making the Case with Metrics

To prove impact, HR leaders must measure outcomes like:

• Reduction in time-to-hire or onboarding time

• Increased learning participation and skills acquisition

• Improved engagement and retention scores

• Internal mobility rates

• Cost savings from automation and self-service platforms

Tools like people analytics dashboards and pulse surveys can help translate transformation into tangible value.

HR’s Moment to Lead

The next chapter of digital transformation belongs to HR. It’s about more than tools — it’s about people, performance, and the cultures we build around technology.

HR professionals have a once-in-a-generation opportunity to redefine their influence. By investing in digital fluency, leading culture change, and measuring what matters, HR can not only support but lead transformation at scale.

Explore how Avado’s CIPD Qualifications can help your HR function drive transformation with confidence. From strategic L&D to digital capability-building, we’re here to support your next chapter!