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Iterative digitalisation – next-level employment law solutions for CEO, CHRO, CTO/CIO

Digitalisation is changing the world and leading to different challenges: technically, (labour) law, for HR and, in some cases, for the entire workforce. The challenges are greater when companies do not have or are unable to implement a sustainable (HR) digitization strategy. Companies can try to achieve a sustainable (HR) digitization strategy in different ways and use different tools. In particular, stringent "change and transformation management" is elementary.

In our experience, in order to be successful in the long term, companies often have to take various processes to a new level and reorganise existing processes. In our one-pager, we show the most important "construction sites" and fields of action / action points that companies need to keep in mind when implementing a digitisation strategy.

Indications of digitisation "construction sites" in companies

A lack of a sustainable digitisation strategy and a lack of targeted change and transformation management often make themselves felt in "little things". One example is inefficient workflows between internal stakeholders and the incorrect involvement of IT experts. This can paralyze or at least delay digitisation processes in the company. One consequence of this is often that IT systems are introduced individually and presented to the works council, without context to the business model or digitisation strategy. This, in turn, can increase the potential for conflict with employee representatives, everything slows down even and uncertainty among the workforce grows. In extreme cases, the workforce is overwhelmed and/or digitisation projects are rejected (by employee representatives or even parts of the workforce). It is not only in digital business models that this can sooner or later lead to existential threats to companies.

"Strategy Discovery/Review" as a building block of an iterative digitisation process

But how do companies manage not to get into a vicious circle of (legal) impossibilities in digitization, to implement digitisation faster and to involve all relevant stakeholders in a meaningful way?

There is, this much can be revealed, no "silver bullet solution", i.e. not "the one solution". Rather, various factors play a role, which must be examined by all stakeholders before finding a solution. The best way to achieve an approach to solutions is to embark on a holistic and iterative "strategy discovery/review" and derive actions in various fields of action from this. Here is just a (very limited) selection of the relevant questions that companies need to ask themselves to take stock:

  • How digital is our business model?
  • Do we need to become more digital internally and/or externally?
  • How quickly do we need to digitise our business model?
  • How digital is our workforce?
  • What do we do to establish digital mindsets?
  • What is the relationship with our employee representatives?
  • How digital is our employee representation?
  • What are the reservations about digitisation among the workforce and why?
  • How (well) do we communicate digitisation projects and business models?
  • Who communicates digitisation projects and business models?
  • Do we work with off-the-shelf software or with in-house developments?
  • How good is our documentation of the IT and software environment?

Companies must put the questions and, in particular, answers into a context that leads to a holistic (HR) digitisation strategy. From this, fields of action and action points can then be derived – individually divergent in terms of measures and intensities.

Field of action and action point #1: Understanding and using leeway under labour law

Digitisation does not take place on a legal greenfield site, neither for start-ups nor for established companies. Rather, the legal requirements and risks must be kept in mind. This also includes strategies for minimising risks. The central guidelines are data protection law and various participation and co-determination rights. For this purpose, companies have often hired professionals or get the expertise from outside. But the best professional is of no use if other relevant stakeholders have difficulties understanding the legal framework or even (corporate) political reservations. Also, a lot is a question of perspective. In this way, co-determination and data protection can be perceived as a slowdown and the focus can be on the impossibilities. However, it is much more interesting when stakeholders who are not professionals in employment law are given opportunities and leeway. We have already presented a limited selection of the scope in the blog.

Field of action and action point #2: Efficient control of projects and make them explainable

Digitisation projects are first and foremost complex. According to our observations, even experienced IT professionals sometimes have great difficulties in conveying in simple terms what, why and how (or with what side effects) digitization should be carried out. The difficulties are multiplied when obtuse or pretending contacts come into play. Every company is therefore well advised to question, check and design the plausibility of the storyline of digitisation projects well in advance of the initial contact with employee representatives or the workforce. At the same time, companies must keep an eye on project schedules and the efficient involvement of all stakeholders. This is where technical solutions can help. Both well-explained IT and a defined legal framework become particularly important when IT issues (should) end up in the conciliation board.

This is because companies must keep in mind that in 99% of cases, very complex technical processes have to be made comprehensible to technical laymen. Both software and hardware must be explained in a "user-friendly" way. As a rule, IT professionals must also be prepared for this in order to identify stumbling blocks in co-determination and data protection. More important, however, is often the "right" selection of external "users" (including IT experts, conciliation committee chairmen, mediators) who are to be involved in the iterative process. Only empirical values will help with the right choice. If these do not exist, pitches can be scheduled. However, this often has to be understood first, as they are not common, especially among long-serving judges.

Field of action and action point #3: Shaping communication and cooperation with the works council in a targeted manner

For the successful implementation of digitization, targeted communication and (sometimes only successively achievable) trusting cooperation with the works council is essential. Ultimately, it is only through communication that problems and challenges can be identified and contained. Here, too, non-professionals must be aware of the scope for manoeuvre under labour law and – in the long run and controlled – understand employee representation as a possible part of the digitisation strategy. For all the slowness of the Works Constitution Act, one must not overlook the fact that the co-determination process forms a blueprint for digitization projects, so to speak. Co-determination, in particular in accordance with Section 87 of the Works Constitution Act, contains iterative elements that are part of the day-to-day business of every software development. Every company has the planning design of such an iterative process in its hands and should above all use it

Field of action and action point #4: Plan measures for reservations and blockades at an early stage

Any behaviour, no matter how cooperative, can end in blockades – this is also laid down in Section 87 of the Works Constitution Act. Blockades can be overcome in conflict (court proceedings) and, in our experience, companies often have good cards here as well. It is better and more sustainable to plan the situation and solutions with foresight. This may include controllable court proceedings (also as summary proceedings). However, they should be embedded in a strategic framework and ultimately serve the long-term goal of implementing a digitisation strategy. At best, therefore, the handling of court proceedings, reservations and blockades is poured into agreements that contribute to the digitisation strategy (for the details of such agreements, see our blog post on IT Cooperation Agreements). Various regulations can be used to proactively clarify in advance which rules should apply when dealing with information processes, how to deal with internal and external expertise and how the functionality of IT systems (e.g. in the case of updates) is to be ensured.

Field of action and action point #5: Stakeholder management is not a "one-trick pony"

The implementation of a digitisation strategy is a long-term project in continuous change. This requires fluid negotiation and stakeholder management. A regular strategy review (and, if necessary, adjustment), a mutual refreshment of knowledge between the respective stakeholders (e.g. between IT and HR) are essential long-term success factors. Regular workshops, trainings and rehearsals are available for this purpose. With sufficient trust, employee representatives can be continuously involved in this process. In this respect, too, co-determination offers a blueprint for iterative processes: almost every regulation is a beta version at today's technological development speed. Continuous adaptation should therefore be part of any successful digitization strategy.

Translated from Kliemt.Blog and written by Dr. Markus Janko

Spoke at AI: The impact and Consequences for HR, 19/07/2023

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