As I’ve shown throughout this series, digital technology is bringing profound change to the HR function in banking and insurance. It has automated many transactional HR processes (like benefits administration) and also empowered line managers to take on many talent management responsibilities that HR used to own. What’s more, technology will continue to shrink the traditional role of the HR organization.

Its administrative burden will continue to lighten; at the same time, employees and managers will be able to take direct control of more and more HR processes, including talent development and performance management. Employees may even manage their own data, and HR data and transactions may become the sole responsibility of the business with the support of IT.

In time, the traditional HR function may shrink to a fraction of what it is today. To remain relevant in this changing world, HR departments need recast themselves as important partners to their CEOs and boards as they work on the digital transformation of their businesses.

This could start by helping the business focus on using analytics to understand which human levers to pull to improve performance. HR may also shift its mission and mandate to concentrate on building a culture where people can use talent management tools to enhance their own job performance.

But perhaps even more important is to support and lead the culture change that organizations need to achieve in order to make a success of their digital programs. Digital transformation is one of the largest changes any organization will face. It relies on the HR organization’s ability to align leadership and the workforce behind the new opportunities digital technology brings.

Digital will bring change to the workforce, from job descriptions and definitions to the skills that the bank or insurers will require, where it accesses these skills and how it develops the workforce. The shift to a digital world has inspired a form of digital culture shock among employees at many established banks and insurers; it is the HR organization that can help the company to adopt a more digital mindset and become more agile.

Banks and insurers need to spread a digital mindset, starting from the leadership. In this regard, the HR organization needs to support the business and its leaders across three levels:

  • helping leadership to grasp the challenges and opportunities of creating a digital culture
  • working with employees to help them acquire the ability and behaviors needed to work in the digital economy
  • working with the whole workforce to develop digital ways of working, with a heavy emphasis on collaboration

Digital change is bringing new technologies and solutions into financial services, demanding that people change how they work and collaborate, and inspiring new customer needs and expectations. It’s not just customers that are changing, but the next generation of employees. Millennials have new expectations about how work should be organized, and the tools and practices companies use.

Financial services companies and their leaders, reeling from the impacts of technology and the changes they need to make in response, need the support of the HR organization now more than ever. HR knows the people in the business. Its role now is to help them develop new skills, manage a new type of workforce where freelancers and crowdsourced labor are a bigger part of the picture, and ensure that the culture is agile and ready for change.

The business is digital, so the organization, its people and its culture must now become digital, too.

To learn more, read: Digital Radically Disrupts HR: Digital technology is transforming how people work—demanding a fundamentally different HR strategy

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