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Human Resources Management Digitization

Frank Mittag

Human Resources Management Digitization

Things change all the time over centuries in the world of business and industry and it is definitely not an industry-specific phenomenon.

The past few years have been dominated by strategic and technological breakthroughs.

Given that this is the fourth industrial revolution in history, it was quickly named Industry 4.0. Its predecessors also received the retroactive designations Industry 1.0, 2.0 and 3.0, given that each of the four industrial revolutions brought with it considerable changes and immense progress in their respective eras.

In this article, we’d like to quickly recap the revolutionary developments that earned them the names Industry 1.0 - 4.0 and also the opportunities the current developments and the digitalization trend will mean for your business – and most importantly, HRM.


What is Industry 1.0?

In retrospect, Industry 1.0 flourished in the era of mass production by machines, which began in 1800 approx.

Mechanical production systems were developed and the machines were primarily powered by water and steam.

Railway systems, coal mining or the heavy manufacturing industry are considered the big success stories of this early industrialization.

Even back then, people knew that developments of this kind would translate into new jobs in the new plants.

What is Industry 2.0?

What was the reason behind the continuation of the revolutionary developments, driven by humanity’s inventive spirit of the 19th century? The introduction of electricity as a new source of power.

One of the pioneers of this time was certainly Henry Ford, who was the first man to manufacture cars on an assembly line.

The fledgling roots of HRM digitization and other office administration work also began to sprout during the so-called Industry 2.0 era. Telephones and telegrams simplified and improved human communications.

This era is also being credited with the beginning of globalization. Transporting products overseas was no longer and obstacle with air travel. Supplying and offering more products could be now possible thanks to the optimized manufacturing options.

What is Industry 3.0?

Microelectronics took the world into its third industrial revolution. It occurred in the mid-1970s. After the larger computation machines and the early days of functioning computers, for instance, the “Z3” developed by German construction engineer Konrad Ernst Otto Zuse in 1941, which was the first ever functioning computer, the era of electronics and IT appeared on the horizon.

The personal computer for use in offices and at home ushered in the digitalization and is the foundation of Industry 4.0.


What is Industry 4.0?

We are currently going through the fourth industrial revolution. Digitization is assuming a new role. Machines no longer simplify work processes; instead, humans are working hand in hand with robots. The algorithms are intelligent and some processes are completely automated and we have smart software programs.

What initially sounded like a horrific vision of the future depicted in a sci-fi thriller from the 1990s, has long become reality.

Industry 4.0 describes the ever-changing production and work world of the global era.

HRM digitization

Industry 4.0, also known as informatization, aims at the continued digitization of a wide range of different industrial sectors and segments. HRM is one of the segments that benefits from this development.

One of the benefits of using software that digitizes HRM processes are the high level of data security and the increase in mobility, due to the fact that only a working browser is needed for the use of a software. Moreover, you will not need any additional resources for maintaining or administering software solutions.

Companies won't have to incur maintenance costs. The easy usability of select software also allows Human Resource Management (HRM) to save even more time. It makes it possible to easily manage HR processes on all end devices.

This type of software has been available to all businesses, not just larger or international companies for quite some time. In fact, HRM digitization is reaching small to medium-sized companies more and more these days.

A Deloitte study conducted in 2016 confirmed that 73% of those interviewed consider the digitization of medium-sized companies a current or extremely current and important development.

Fig. 1 – Current topicality of medium-sized company digitalization

Companies that employ a small workforce, more than often than not, do not have their own Human Resource Management department. This means that a single staff member, most times an executive, has to dedicate part of his/hers work hours to the partly time consuming and complex HR processes. One of the aims of these companies should be to keep the workload related to HR processes a minimum and to enhance the processes.

This desire is evident from Figure 2., which shows why digitization is considered an important undertaking also for small to medium-sized companies.


Fig. 2 – The internal drivers of digitalization at medium-sized companies

Human Resource managers have identified the exact same issues as drivers of digitalization at medium-sized companies that leading software solutions perfectly address.

Software programs have the capability to optimize processes, shorten work steps and save money. Furthermore, they make it possible for third parties to administrate increasing data volumes, which also streamlines in-house processes and expenditures and, in some cases, can even reduce the amount of required storage space.

Digitalization enables businesses to save valuable time, optimize processes and increase the productivity of their employees.

Figure 3. shows the external drivers that managers in charge at small to medium-sized companies brought up to motivate them to use and pursue digitalization at their own companies.


Fig. 3 – The external drivers of digitalization at medium-sized companies

The focus is on changing customer needs. Given that the concept “the customer is always right” is something a vast number of companies believe in, it is hardly surprising that businesses feel under so much pressure to accommodate the changing demands of their customers.

A responsive website is only the tip of the iceberg as far as this issue is concerned.


Digitize your HRM with kiwiHR

Our kiwiHR software offers you all of the above benefits at an affordable and flexible price, without any set-up costs or recurring maintenance fees.

Using kiwiHR will allow you to save valuable work hours. By streamlining your HR processes, such as approval processes for employees requesting time off (paid leave, training, working from home, etc.). The tool is also accessible to your employees. Staff will be able to submit time-off requests, leave of absence due to illness or training requests. The digital employee records also reduces paper consumption and makes document management easy.

With employee self service, your data will always be up-to-date and correct. You will no longer have to verify information on a regular basis.

kiwiHR aims to offer an affordable way to digitize HRM tasks at small and medium-sized companies. Our top priority is to make kiwiHR, as easy-to-use as possible and facilitate human resource management.

If you should have any questions, we are looking forward to hearing from you at hello@kiwihr.com



Find information about the described study here.

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