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Factor Affecting the Successful Digitalisation of Human Resources

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DOI: 10.1108/978-1-80382-027-920231005

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Chapter 5

Factor Affecting the Successful

Digitalisation of Human Resources
Rakesh Shirasea, Priyanka Chhibberb, and Amar Narkhedea
a
SaiBalaji International Institute of Management Sciences Permanently Affiliated to
SavitriBai Phule Pune University, Pune, Maharashtra
b
Lovely Professional University, Phagwara, Punjab

Abstract
Introduction: Society has undergone rapid changes due to advancements
in technology, addressed across all sectors. So, the current period is called
the ‘Digital Era’. New technologies affect the organisation in several ways.
Organisations can perform their functions more effectively by benefitting
from the latest developments. E-human resources management (HRM)
has emerged as a new concept due to the digital revolution. Various web-
based tools have been used by HR professionals. New recruitments are
being placed on employees regarding digital competence, problem-solving
or human–machine communication.
Purpose: This study explores the factors necessary for the successful digi-
talisation of human resources. It will further discuss the consequences of
the digitalisation of HR.
Methodology: An exploratory research design is used for the study. Papers
published on information and communication technology (ICT) and higher
education from Research Gate, Google Scholar and other resources have been
reviewed to achieve the aim of this study. Factors affecting the successful digi-
talisation of HR include various technological and organisational aspects.
Findings and Originality: The findings further revealed that the digitalisa-
tion of human resources has both positive and negative consequences.

Keywords: Digitalisation; human resources; consequences; technological

factors; organisational factors; digital era

The Adoption and Effect of Artificial Intelligence on Human Resources Management,

Part 7A, 99–105
Copyright © 2023 by Rakesh Shirase, Priyanka Chhibber, and Amar Narkhede
Published under exclusive licence by Emerald Publishing Limited
doi:10.1108/978-1-80382-027-920231005
 100 Rakesh Shirase et al.

1. Introduction
The fourth industrial revolution made it essential for industries to use ICT. The
use of technology has been helping in improving productivity and is also help-
ing in building a unique selling position in the market. Technological advance-
ment has been spreading across all sectors of the economy. That is why this era is
being called the ‘Digital era’. ICT in production helps to exchange information
independently by machines, operating materials and logistics systems (Ramsauer,
AQ1 2013). This active communication between machines and products can be pos-
sible due to integrating the physical world with the virtual world (Bauernhansl,
Krueger, Reinhart, & Schuh, 2016). Digitalisation has not only influenced pro-
duction and manufacturing, and it has spread across all departments, including
finance, marketing and HR. Digitalisation has affected organisations worldwide
due to changes in consumer behaviour and changes in their expectations from
products and services. Organisations have to re-define their products and services
and re-formulate their strategies to compete. Digitalisation has several advan-
tages, as mentioned in the literature. Digital transformation has a positive effect
on future opportunities of an organisation (Nöhammer & Stichlberger, 2019).
However, there is a difference between digital transformation and digitalisation,
as highlighted by Gassmann, Frankenberger, and Csik (2014). ‘Digitalisation
refers to the ability to transform existing products and services into digital vari-
ants and therefore offer advantages over the tangible product’. Digitalisation has
also brought some new challenges, which have urged to change traditional HRM.
Integrating or dealing with data and information by human resources (HR) has
changed. HRM, such as recruitment and selection of employees, planning of
HR, and performance appraisals, are all digitised to provide better services to the
stakeholders (Maria, 2020). Digitalisation of HR information systems results in
time saving (Maria, 2020).

2. Review of Literature
Kristoff, Hoen, Adrian, and Stang (2018) characterised digitalisation as an
approach to utilising innovation by individuals. A few creators looked at digi-
talisation as a cycle. For instance, as an assertion given by Murphy (2018),
‘Digitalization is the method involved with changing over simple signs or data
in any structure into a computerized design that can be perceived by the PC
framework or electronic gadgets’. Osipova (2019) likewise think about digitali-
sation as a drawn-out process. This view was again upheld by Ketolainen (2018)
by characterising computerised human asset change as a change interaction by
expressing, ‘The change cycle of moving to an advanced HR to become mecha-
nized and information-driven. It is the utilization of advancements that empow-
ers evolving business’. Das and Sureshkrishna (2019) consider digitalisation as
essential, which the associations must embrace to stay cutthroat and get by on
the lookout. Based on the meaning of this idea by various scientists and crea-
tors, Maria (2020) characterised a portion of the attributes of digitalisation.
Maria (2020) examined that digitalisation is a ‘quick and flexible cycle’. It is ‘not
 Successful Digitalisation of HR 101

difficult to utilize, customer-centred, data-driven, collaborative and strategically

significant for the accomplishment of associations’. Investigates uncovered that
digitalisation influences enrolment and preparing cycle of human asset the board
(Evseeva, Kalchenko, Evseeva, & Plis, 2019; Savola & Troque, 2019). Digitalisa-
tion unequivocally affects the recruitment capacity of humans helps the board.
A review led by Strohmeier and Parry (2014) zeroed in on the effect of digi-
talisation on human assets on the board. Discoveries of the study featured the
future difficulties that the committee would look at. One more review directed
by Lager and Milojkovic (2018) uncovered that advanced inclusion of represent-
atives helps work on the commitment of representatives incorporate exercises,
along these lines, expressing that representatives can be appropriately overseen
by taking on computerised arrangements organisations. Along these lines, digi-
talisation helps in working on the exhibition of the representatives (Fedorova
et al., 2019).

3. Discussion
Much research has been conducted on the impact of digitalisation on HR func-
tions, employee performance and overall organisation. However, little was found
on factors affecting the digitalisation of HRM. Therefore, Bondarouk, Parry,
and Furtmueller (2017) categorised the elements necessary for successful digi-
talisation of HRM in three categories – technological, organisational and people
factors.

3.1. Factors Affecting Digitalisation of HR

3.1.1. Technological Factors. A study conducted by Njoku (2018) revealed that AQ2
the attitude of top management towards digital tools is positively impacted by per-
ceived usefulness and ease of use. However, perceived usefulness was found to have
a substantial impact on the attitude of top management, whereas perceived ease
of use has a relatively weak effect. Integration and characteristics of data are other
technological factors (Murphy, 2018; Nabila, 2017) that affect the digitalisation of
HR. Several technical factors identified by Bondarouk et al. (2017) influence adop-
tion of the human resource information systems. These factors include integrity of
data, usefulness and integration design and in-house development versus external
human resource information system software.
3.1.2. Organisational Factors. Qualities of the association, its capacities and
accessible assets likewise influence the fruitful digitalisation of executives’ human
support. A review led by Ketolainen (2018) uncovered that size, area, business
region and geographic region where the association is working altogether influ-
ences the execution of the digitalisation gracious human asset the board in the
association. It implies that a progressive change of human support is more found
in large- and medium-sized associations. It means the digital transformation of
HR is more found in large- and medium-sized organisations. Another study con-
ducted by Mishra (2014) in an Indian context revealed that advantages arising
from the digitalisation of HR are exploited more by private sector organisations
102 Rakesh Shirase et al.

rather than public sector organisations. The capabilities and resources also deter-
mine the success of implementing digital HR. Due to a lack of funds and acces-
sibility, organisations find it difficult to use digital tools. Abdali (2019) found that
lack of financial resources is generally considered a significant factor in the suc-
cessful digitalisation process. This finding was confirmed by Murphy (2018) that
a considerable budget is required to implement digital technologies successfully.
Lack of awareness and sufficient knowledge is another organisational factor that
affects successful digitalisation in an organisation (Njoku, 2018).
3.1.3. People Factors. Individual’s factors incorporate different sub-factors,
including top administration support, client acknowledgement, correspondence
and cooperation among units, human asset abilities and skill, authority and
culture (Bondarouk et al., 2017). Top management support is essential to suc-
cessfully implement the digitalisation of HR (Bloom & Bengtsson, 2017). It is
compulsory for HR managers to properly understand this digitalisation process
to influence the employees to consider it essential. If managers themselves will
not be fully aware, then they could never be able to make the employees use digital
tools. A study conducted by DeSanctis (1986) revealed that the involvement of
users, which make system development, have a positive impact on the satisfaction
of HR; the experience of the employee in their current status has a negative rela-
tionship with the joy of users (Haines & Petit, 1997). This is so because the more
experience they have in their current position, high the chances of resistance by
them in using new systems is there. A new approach is also resisted by the employ-
ees if it results in an increased workload.
A study conducted by Panayotopoulou, Vakola, and Galanaki (2007) revealed
that close collaboration among departments is essential for the successful imple-
mentation of digitalisation of HR. Organisational culture and communication
between HR and other functions are also critical for successful implementation
(Kossek, Young, Gash, & Nichol, 1994). Another study conducted by Hannon,
Jelf, and Brandes (1996) revealed that lack of technical skills among HR profes-
sionals for using human resource information systems is also critical to the suc-
cess of digitalisation of HR. So, training of HR professionals to use new methods
helps in the successful implementation of digitalisation (Martin & Reddington,
2010; Panayotopoulou et al., 2007).

3.2. Consequences of HRM Digitalisation

3.2.1. Positive Consequences of HRM Digitalisation.

a. Saving in cost: Adoption of digitalisation tools lead to a reduction in cost.

This was supported by the study results conducted by Lager and Milojkovic
(2018). Results of the study revealed that the use of digital tools could speed
up the process and information management, thereby reducing cost.
b. Increase in efficiency: Digitalisation of HRM helps enhance the organisation’s
efficiency due to cost reduction and time saving. The digitalisation of HRM
has made activities very easy. For example, a human resource information sys-
tem results in time saving, which further increases the overall productivity of
 Successful Digitalisation of HR 103

the HRM function. The study conducted by Dionne Démeijer (2017) showed
that the HRM system has become simplified, straightforward and faster due
to digitalisation. As a result, HR professionals can better focus on their main
activities instead of wasting time on irrelevant activities.
c. Increase in effectiveness: Digitalisation of HR practices results in an organisa-
tion’s effectiveness. Human professionals can work effectively with the intro-
duction of digitalisation. A study conducted by Nooruddin (2018) revealed
that the use of digital tools helps ineffective recruitment and selection. The
skills of the potential employees or aspirants can easily be compared with the
requirement needed to fill the vacant positions. This results in time saving.
d. Human resource flexibility: With digital tools, work from home can be done
by HR professionals. If work is done from home by HR professionals with
the help of digital tools, it results in a decrease in their stress, which further
helps make them efficient (Murphy, 2018). Human resource managers could
involve themselves in strategic work instead of wasting their time on low-level
administrative work.
e. Other benefits: Digitalisation helps create new communication channels
(Lager & Milojkovic, 2018). Digitalisation helps increase motivation among
employees (Fedorova et al., 2019). Employees usually try to improve their
performance by using new tools.

3.2.2. Negative Consequences of HR Digitalisation.

a. Data security issue: The use of digital tools in HR results in data security
issues (Odegov, Malakhova, & Garnov, 2019). Laws and many measures have AQ3
been formulated to protect employees’ privacy in the company’s database.
However, hacking by a third party may expose employees’ details despite
these laws and standards.
b. Wrong assessment of employees: Digitalised HR is very effective and efficient.
However, it sometimes may result in wrong employee assessment. This is so
because automation depends on different types of information, including
skills, talents, and performance scores. However, this automated system of
employee assessment does not include human factors. For example, the way
of handling and treating customers would not be considered by a computer-
ised system.
c. Lack of suitable skills and high implementation cost: The cost of implementing
digitalisation of HR is very high. License cost and human resource infor-
mation system implementation cost have to be born. Lack of experts and
problems in the digitalisation of HR is another issue. If HR professionals
themselves could not understand it correctly, they can never be able to influ-
ence employees to use digital tools.
d. Difficulty in using new technology by employees: Because of the absence of
reasonable direction about utilising advanced devices, representatives will
be unable to use the new advances productively and adequately. As a result,
existing human assets, the executive’s computerised machines, are not being
utilised to their maximum capacity.
 104 Rakesh Shirase et al.

4. Conclusion
This study aimed to explore the factors affecting the successful digitalisation
of HR and determine the consequences of digitalisation. We have done a lit-
erature review to achieve the objectives. We can conclude that many studies exist
on the impact of digitalisation. However, little was found on its factor affecting
and consequences. Several technological, organisational, and people factors were
explored, which affects the successful digitalisation of HR.
Furthermore, the positive as well as the negative impact of digitalisation was
explored. Regarding the positive consequences, cost saving, increase in efficiency
and effectiveness, flexible HR were found. On the other hand, regarding the nega-
tive repercussions, breach of privacy, wrong assessment of employees, high imple-
mentation cost, lack of appropriate skills, etc., were noted.

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 AUTHOR QUERIES
AQ1: Please note that “Ramsauer, 2014” has been changed to “Ramsauer,
2013” as per the reference list. Please check.
AQ2: The reference given here is cited in the text but is missing from the refer-
ence list – please make the list complete or remove the reference from the
text: “Njoku, 2018”.
AQ3: Please note that “Odegov et al., 2018” has been changed to “Odegov et al.,
2019” as per the reference list. Please check.
AQ4: Please provide the page number and location in the ref. Evseeva et al.
(2019); Osipova, O. (2019).
AQ5: Please provide complete publication details in the references: Ketolainen,
N. (2018); Mishra, M. (2014).
AQ6: Reference(s) given here were listed in the reference list, but are missing
from the text. Please position each reference in the text or delete it from
the list: “Njoku et al., 2019” and “Zeng, 2020”.
AQ7: Please provide page numbers in the ref. Zeng, H. (2020).

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