Digital transformation in HRM of the modern business service sector in Finland and Poland

PurposeThe purpose of this article is to analyze the digital innovations which are being introduced in the HRM field in organizations in the modern business services sector in Finland and Poland. It is also intended to identify the most important factors/trends that influence digital innovations and to identify the challenges they generate for HRM departments. The practical objective is to develop recommendations for organizations executives, policy makers and researchers.Design/methodology/approachThe research was mainly based on a quantitative research approach and a questionnaire survey. Additionally, the authors conducted a semi-structured interview was with the representatives of the HRM departments in the surveyed organizations. The qualitative research of the obtained results allowed to deepen the obtained quantitative data. The purpose of the data triangulation used was to increase the reliability of the data.FindingsNearly 90% of HRM employees declared that the companies they work for have implemented digital innovations. Among the introduced digital innovations, chatbots, dashboards, application software systems, a virtual HRM assistant and digital tools were indicated. The COVID-19 pandemic and the progress of robotization and automation have accelerated the implementation of digital technologies in HR departments in both Poland and Finland. There are however differences between the two countries – it is evident that in Finland digital innovations were already introduced by modern businesses organizations before the pandemic period, while in Poland the innovations were mostly implemented during and after the pandemic period. It is worth emphasizing the differences regarding the two countries in terms of the level of technology advancement.Research limitations/implicationsSimilar to most studies conducted, this study has its limitations and the authors are aware of them. First, future research using the tool which was used in this study should focus on confirming its reliability. Secondly, its scope and scale were limited as it was not possible to obtain an industry-wide sample. It should be noted that the obtained results cannot be generalized to a broader context, although they provide valuable conclusions and recommendations and may be an inspiration for further research. For the future research, it is recommended that the researchers should pay more attention to the challenges and difficulties that accompany digital innovations in HRM departments. One of the aspects is the need to pay attention to the cultural and psychological aspects of the presence of technology in organizational areas, which have only been signaled in this article. A more in-depth study could address the issue of negative attitudes toward the introduction and use of digital technologies. The future research could focus on creating the necessary conditions at each stage of introducing digital innovations and using the potential of these tools – starting with needs analyses, awareness of goals, benefits, dealing with concerns and risks, communication and evaluation and assessment of the technology in question. For future research, it is recommended that researchers pay more attention to the challenges and difficulties that accompany digital innovations in HRM departments. One of the aspects is the need to be aware of the cultural and psychological aspects of the presence of technology in organizational areas, which has only been signaled in this article. A more in-depth study could address the issue of negative attitudes toward the introduction and use of digital technologies. The future research could focus on creating the necessary conditions at each stage of introducing digital innovations and using the potential of these tools – starting with needs analyses, awareness of goals, benefits, dealing with concerns and risks, communication and evaluation and assessment of the technology in question.Practical implicationsThe study provides suggestions for practice, providing companies in Finland and Poland with the insight into the impact of the trends on the development of digital innovations in HRM departments and the challenges they generate. The contributions of this study are also the recommendations and guidelines for organizations to effectively implement digital technologies. This will allow not only to better adapt to the present situation, but also to more accurately predict future trends.Social implicationsThe research results can be useful for the development of HRM practices, as traditional practices are increasingly being replaced by new digital modes of leading and managing capital resources in organizations. This development is followed by the need for new competencies in HRM (Mazurchenko, Maršíková, 2019), a new understanding of leadership, thus digital tools may prove particularly supportive in this context (Salojärvi, 2018). Digital innovation research conducted in the modern business services industry can be particularly valuable in the context of the flow of technological innovations, including know-how, implementation of modern organizational solutions; which transfers to other industries (MORR, 2017). Digital innovations can contribute to reducing the complexity of HRM functions, which will accelerate management and personnel decisions. It will improve the quality of analytical data, as well as increase access to employees and opportunities in planning their personal development. As a result, the introduction of digital innovations will contribute to reducing costs and increasing the efficiency of HRM processes.Originality/valueThis study provides a new and timely perspective by examining applied digital innovations and related challenges affecting the implementation of digital innovations by HRM departments in the modern business services sector. This survey provides comprehensive information on how and what can enhance the capacity for digital innovation in Finnish and Polish organizations. This article theoretically analyzes the importance of technological development for HRM departments and reviews the previous research on digital technologies in HRM departments and the factors and challenges of introducing digital innovations. It also characterizes the modern business services sector, which is very active in introducing digital innovations.