UK businesses failing to digitally transform HR operations


An employer survey conducted by the leading HR and payroll services provider SD Worx shows that the UK is lagging behind its European peers when it comes to HR digitalisation.

In the UK, only a third (33%) of companies report a high level of digital maturity within their HR department. The research shows the UK is lagging behind its European counterparts, where on average 38% of organisations are considered to have high digital maturity levels. The UK is significantly behind countries such as Spain, Germany, and the Republic of Ireland where 47%, 44%, 43% of organisations are classed as being digitally mature.

Digitalisation within UK HR departments is primarily focused on systems and tools that are aimed at making HR’s life easier but is doing little to improve the overall employee experience. Digital maturity is typically found in highly transactional processes while more employee-focused tools, such as self-service HR systems, employee experience platforms, and digital assistants, are lagging behind.

However, the UK’s HR leaders are recognising these challenges and want to reclaim control. Eight out of ten believe HR should be driving digital transformation rather than IT or procurement teams.


From payroll to employee welfare

The research found that it is the highly transactional HR tasks, such as payroll, time management, and expense management, that are typically the ones that are more likely to have been digitally transformed.

The levels of digitalisation in the following areas are high in UK organisations:

  • Payroll – 48%
  • Expense management – 43%
  • Time management and attendance – 42%

By contrast, the more people-orientated HR areas around recruitment and selection, onboarding, employee wellbeing, and performance management have not been such a focus for digital transformation.

The levels of digitalisation in the following areas are low in UK organisations:

  • Recruitment and selection – 41%
  • Employee wellbeing – 39%
  • Onboarding – 38%
  • Performance management – 32%


Taking control of HR transformation

Now that many departmental areas have benefited from digital transformation, HR leaders need to recognise where their investments and priorities lie.

In the next two years, the areas identified in the research as needing focus are:

  • Being able to answer and deal with employees’ HR questions promptly
  • Ensuring operational efficiency
  • Motivating and guiding employees to perform efficiently as individuals and as a team
  • Finding and recruiting the right profiles for the organisation

Digital transformation of the related systems and processes will be critical to delivering here. HR leaders are keen to take control of their own destinies, with 82% believing HR should take the lead on choosing HR systems, rather than leaving it to procurement or IT.

Colette Philp, UK HR Country Lead, SD Worx, said: “It’s time to look beyond the inner workings of the HR department and apply digital transformation across those areas that contribute to the overall employee experience. This is critical to building connections with employees and creating a positive environment that will help businesses attract and retain their people at a time when people resources are such a major challenge for all.”