Sweden Lags Behind: In-Depth Findings from the New HR Digitalization Report

A new comprehensive report from the Centre for Global HRM (CGHRM) reveals that Sweden is facing significant challenges in keeping pace with other countries regarding the digitalisation of Human Resources (HR). Based on data from the international Cranet survey, which analyses HR practices across 38 countries, the report provides a detailed examination of Sweden's current state of HR digitalisation. Despite widespread global advancements in HR technologies, Sweden is notably behind in adopting advanced digital tools such as Artificial Intelligence (AI) and Robotic Process Automation (RPA).

The report, authored by leading experts Stefan Tengblad and Donika Nord, paints a clear picture of the situation: Swedish HR departments need to embrace technologies faster to significantly enhance efficiency and decision-making capabilities. Instead, the digital transformation within Sweden's HR sector remains in its early stages, with many organisations digitising only the most basic administrative processes rather than adopting more transformative, cutting-edge technologies.

Key Insights from the Cranet Survey:

1. Sweden's Struggles with Advanced Technology Adoption: The report underscores that Sweden ranks among the lowest of the surveyed nations in its adoption of algorithmic HR processes and automated tools like RPA. Advanced technologies, such as AI-powered tools that can automate routine HR tasks or analyse workforce data to provide predictive insights, are only used in 8% of Swedish organisations. By contrast, countries such as the United States, Germany, and the United Kingdom report up to 25% adoption rates for these advanced technologies. This places Sweden far behind in the global race toward HR digital transformation.
2. The Underutilization of AI and Predictive Analytics: Despite the widespread availability and potential of AI tools designed to optimise HR operations, most Swedish companies have yet to implement them fully. AI tools can assist in various HR activities, including streamlining recruitment, improving performance evaluations, and conducting predictive workforce planning. Still, Swedish HR departments are predominantly focused on using more traditional HR information systems. The report highlights that while these systems are helpful, they fail to take advantage of AI's ability to analyse vast amounts of data quickly and offer insights that could help organisations become more proactive and strategic in managing their human capital.
3. Digital Tools Not Strategically Integrated: One of the most critical findings of the report is the need for more strategic integration of digital tools within Swedish HR departments. Many organisations have taken steps toward digitalisation by implementing systems for payroll management or time tracking. However, these digital tools are often used to replicate existing manual processes rather than rethinking and reengineering processes to exploit the full potential of digitalisation. The lack of strategic intent and integration means that many HR departments fail to use the data generated by these tools to inform higher-level, data-driven decision-making, which remains an underdeveloped aspect of Swedish HR operations.
4. Competence and Resource Gaps: The report identifies significant barriers to HR digitalisation in Sweden, with the two most pressing being a lack of technical competence and insufficient resources. Swedish HR professionals often need more technical expertise to lead and manage digital transformations, and many HR teams are stretched thin, focusing on day-to-day operational tasks without the capacity to innovate. Additionally, financial resources to support digital transformation initiatives are often limited, particularly in smaller organisations. This shortage of competence and resources has created a widening digital divide, where only a tiny fraction of Sweden's larger organisations are moving forward with digital innovation. At the same time, the majority struggle to keep pace.
5. The Crucial Role of Leadership in Digital Transformation: A central theme in the report is the importance of leadership engagement in driving digital transformation within HR. The findings suggest that many Swedish HR departments are hesitant to adopt new technologies, not due to the technologies themselves but because of a lack of support from organisational leaders. The report stresses that HR digitalisation can only be successful with a strong leadership commitment to creating a digital-first culture. Leaders need to champion digital tools, invest in training, and promote the long-term strategic value of digitalisation for the entire organisation. With this leadership, adopting new technologies tends to be faster, more cohesive, and ultimately effective.
6. HR Analytics: The Missed Opportunity: Another critical area of concern highlighted in the report is the underdevelopment of HR analytics in Sweden. While HR analytics—using data to provide insights on employee turnover, performance, and other workforce metrics—has gained significant traction in many parts of the world, Swedish organisations have been slow to adopt these practices. Currently, only a tiny percentage of companies in Sweden use HR analytics to inform their strategic decisions, which limits their ability to understand workforce trends, improve employee retention, or proactively manage future talent needs. This missed opportunity means Swedish organisations are not fully capitalising on data's power to enhance operational efficiency and employee satisfaction.

Challenges and Opportunities for Sweden Moving Forward:

The report makes it abundantly clear that Sweden must accelerate its efforts to digitally transform HR practices to remain competitive in the global marketplace. The challenges are significant: a shortage of technical skills, limited financial resources, and a leadership gap all hinder HR digitalisation progress. However, the report also highlights several opportunities for improvement.

One of the most urgent recommendations is that Swedish organisations need to move beyond simply automating existing HR processes. True digital transformation requires rethinking HR operations from the ground up, integrating advanced technologies like AI and RPA into everyday workflows, and using data analytics to drive strategic, long-term decision-making.

With suitable investments in technology, training, and leadership engagement, Swedish HR departments have significant potential to catch up with their international peers. As competition intensifies globally, the ability to harness digital tools effectively will be a critical factor in ensuring Sweden's continued success in attracting, managing, and retaining talent.

My Reflections:

I've had the opportunity to work with various organisations across Sweden. While a few companies have embraced digital transformation and made significant strides in automating HR processes, this report reflects what I've seen in most cases. There is a noticeable knowledge gap about digitalisation and how it can be implemented effectively in HR. Many organisations need to be more open about digitalisation, often viewing it as risky or overly complicated. This scepticism and a lack of understanding have slowed progress considerably. This report is valuable and timely—it highlights the current shortcomings and emphasises the importance of a strategic shift in approaching HR digitalisation. The findings offer a roadmap for how Swedish HR departments can catch up with the rest of the world and fully leverage the benefits of digital tools.

You can download the report here: https://sveriges-hr-forening-prod.s3.amazonaws.com/uploads/2024/09/Betyder-AI-Alls-Inte_CGHRM_Cranetrapport.pdf