Embracing digital innovation is increasingly important to business performance, and it turns out it’s as much about people as technology.

When Peter Williams noticed a skills gap at Deloitte Digital, he didn’t bother with a print or website recruitment ad. He tweeted instead, and a South African colleague replied three hours later. The ideal candidate had just moved to Melbourne and was looking for a job.

Williams estimates that, since that tweet four years ago, 20 per cent of Deloitte Digital’s 300 staff have been sourced through social media. The strategy has now spread from the digital division to the rest of the professional services firm, in its Find Like Minds program.

Employees use Twitter, Facebook, LinkedIn and other social media tools to alert their friends to job opportunities at Deloitte. And there’s an incentive: if their friend is hired, they get $5000.

“We realised the biggest pool of talent was the peers of our existing staff,” says Williams, the chief edge officer at Deloitte Digital.

While plenty has been written about digital disruption and the threat it poses to existing business models, some see opportunities for those who truly embrace digital.

“Digital maturity matters in every industry,” concluded a study last year by MIT Sloan’s Centre for Digital Business and Capgemini Consulting. The study of 400 large companies over two years found that the digital leaders outperformed their peers on profitability, revenue and market value.

What does digital innovation mean for HR professionals?

Plenty, according to Rob Scott from the consultancy firm, Presence of IT.

“Most of the requirements to support a digital environment are not about the technology per se,” says Scott, who’s responsible for HR strategy and innovation. “It’s about creating the environment to leverage digital properly. Generally, HR people have shied away from this and not added significant value.”

A joint study last year by Deloitte and AHRI, called ‘Rethinking Social Media’, found that companies were beginning to use social software techniques to improve internal processes, connect employees, increase internal knowledge flow and enhance productivity. These included public forums such as Facebook, LinkedIn, Twitter, YouTube and Instagram, and internal social networks such as Yammer, Wikis and Google apps.

But the study also found that only about 25 per cent of the companies were using social platforms to facilitate people management, and most didn’t see it as essential.

The need to create a different dynamic

A key issue, says Scott, is breaking down hierarchical structures and leadership styles. Young employees expect to use social and mobile tools that can tap into the collective capability of the employee base by promoting idea-sharing. But these tools don’t flourish with a top-down approach.

Scott also sees a role for HR in educating leaders to be involved in social media initiatives and encouraging managers to relax when their direct reports set their own goals and share projects with other divisions.

Relaxed rules can foster innovation, particularly in an environment where software developers can experiment. At Deloitte, one team recently designed prototypes to complete time sheets on smartphones, while a February ‘hackathon’ came up with a program to use smartphones to scan instructions for using office equipment such as photocopiers.

McKinsey & Co, in a report in May on ‘The Seven Traits of Effective Digital Enterprises’, even suggests ring-fencing digital talent, at least in the short term. Buying a five-person mobile development firm and merging it into your existing web operation risks losing the entire team, the report warns.

How digital is impacting the recruitment space

Scott says that more than 70 per cent of organisations have not yet switched to support mobile applications. “Digital natives are highly focused on their mobile phones. They’re not [job] searching on computers.”

Scott sees the biggest opportunities for HR in using social and digital tools for training. Rather than formal courses, networked learning, just-in-time learning and YouTube videos are faster and cheaper, he says.

Williams says the whole mindset of learning is different for the digital generation. “They’ll be using cloud-based stuff and social media collaboration. They’ll acquire knowledge when they need it, rather than going through a training course.”

Deloitte also seconds digital people into traditional areas such as tax and audit, and accountants into its digital division. Other companies, such as Procter & Gamble and Google, exchange employees to cross-pollinate digital and business smarts.

HR needs to play a bigger role in driving digital strategies

Scott says change is coming in every area of HR, and HR needs to play a bigger role in driving companies’ digital strategies.

Wes Ward, a director of Social Media Navigator, agrees. HR, he says, should be the leader and enabler of social productivity. “Now is the time to grab the opportunity to make HR more relevant at a senior level within the organisation,” he says. “It’s not just about finding digital communications people. It’s about having a strategic position.”

This article is an edited version. The full article was first published in the October 14 issue of HRMonthly magazine as ‘Cyber drive’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here.