Digital HR: toward an Agile and Sustainable organizational paradigm

The scenario in which Financial Institutions find themselves operating is extremely dynamic and constantly changing. Indeed, the current historical period is characterized by strong discontinuities and rapid changes, where apparent stability is altered or subverted by the need to find a new balance. There emerges a need to reflect on new ways of working and relating that give proper attention to people's needs, especially in terms of motivation and well-being. The smart working and the emergence of a new agile working are the central elements of new ways of working.

The entire industry, thanks to the positive impact generated in the short term on productivity and well-being, has made the use of smart working and smart learning structural, although not to the same extent for all employees, especially network employees. But doubts about the future of smart working are beginning to become increasingly relevant.

In addition to smart working, the new ways of working are based on concepts of flexibility and agility. Agile methodology transcends the boundaries of software application development and extends to the entire organization. Being agile means transforming into modular realities capable of interpreting new markets, attracting young talent and fostering collaboration with other players in the ecosystem, revising traditional organizational models designed, instead, to manage stable and predictable contexts. From mechanical, hierarchical and pyramidal structures, we move to organizations that are based on an organic model where the company is seen as a cell that adapts to its environment.Agile implies greater autonomy and responsibility of people. The ability to make decisions is developed and a culture based on the psychological safety for error management. In the eyes of the HR function, the concept of agile takes on a double meaning, going on to change its role and responsibility. On the one hand, in fact, it refers to the role of promoter ofagile working that is gradually being spread throughout the different functions of the institution; on the other hand, it means the design of HR systems and processes to support the implementation of agile methodology in the function itself. With reference to the latter, in 2021, 44 percent of HR functions in financial institutions worked on, or experimented with, agile working methodologies.

Digital is an enabling factor of new ways of working and, for some years now, a central element of the strategies of financial institutions. The digital transformation of the human resources function begins with the technology-driven review of HR processes. Particular attention is given to the area of training. Interestingly, digitization in training takes on a twofold significance. On the one hand, in fact, training processes are revised in a technological key. To date, pilot experiences in digital training have turned into paradigms, going to confirm a real cultural change. For example, with platforms dedicated to automated learning , it is possible to learn at the exact moment when a specific training need emerges. This type of learning experience is adaptive to the needs, including personal needs, of each "learner." However, the personalization of training offerings and the anytime & anywhere availability of the same make one wonder about the sustainability of the new learning models , which may be too pervasive. On the other hand, digital skills become a central subject in courses. On average, HR professionals and executives conduct 7 to 8 trainings per year on digital topics.

In addition, the issue of the data-driven. Currently, HR functions' investments are in tools for dataintegration and data quality. The creation of a centralizeddatabase would make it possible to overcome several inefficiencies typical of compartmentalized and local management of information, such as duplication of activities, data stability risks, lengthening of response times, and would enable a more in-depth study of all employee data as well as quick and timely responses to all requests that may reach the HR function. However, difficulties persist in promoting HR process digitization projects. These are often related to a cultural issue that is linked to a low propensity for change, a rather high age and seniority within the department itself. However, the development of data culture is an increasingly topical issue, and such more traditional trends seem to be giving way to innovation. In fact, 51 percent of the institutions admit that the level of dissemination of data culture, within HR functions, is on average high and high. Another interesting finding is that the presence in HR functions of figures specialized in the analysis and use of data stands at around 33 percent. However, in order to achieve solutions that are of real value such technical skills must be guided and supported by those who have a deep knowledge of HR, going to create a winning mixture of skills.

In addition to new ways of working and digital transformation, important issues related to ESG issues emerge among the HR function's priorities. The HR function can be an essential partner in the sustainable transformation of institutions. On the one hand, in fact, resources can help in the development of an inclusive environment and leadership, working on D&I issues; on the other hand, they can support in formulating and achieving environmental and social goals , balancing them with traditional financial performance metrics . It is becoming increasingly relevant for institutions to have a clear ESG strategy.

Such issues, in fact, are also particularly emphasized by the younger generation. The survey submitted by Cetif to Generation Z shows that for88 percent of the sample, sustainability is an important value to be found in the workplace. So, in addition to structuring a rigorous plan for sustainable transformation, institutions must be able to communicate it, avoiding phenomena of greenwashing. In fact, if communicated properly, sustainability strategies can have an important reflection on attraction activities, while, on the contrary, the effects of possible cases of greenwashing will have negative impacts in terms of reputation and, more generally, employer branding, making it more difficult to attract new talent.

In conclusion, it can be said that in the face of new trends emerging in the financial world such as digitization, sustainability, and the need for flexibility and agility, the involvement of the HR function is twofold. On the one hand, in fact, HR management must adopt these new principles within the function itself and among its own people; on the other hand, it must be able to spread the changes to the entire institution.

Edited by the team Cetif Research

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