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By Melissa Campeau
Modern HR means embracing digital potential to deliver agility, competitiveness and an edge. Digital technology isn’t the future; it’s the present.

Mobile and cloud-based technologies are part of employees’ everyday lives, but in many cases, their workplaces haven’t caught up. Deloitte’s Global Human Capital Trends 2016 report found 79 per cent of HR leaders surveyed believe the move toward digital HR is “very important” or “important” for their organizations. But of Canadian respondents, 79 per cent also said their organizations aren’t ready to embrace digital HR, and only nine per cent said they have a “very good” understanding of the best-in-class in digital HR.

Those numbers represent a critical challenge for HR. But for organizations able to harness the potential of digital HR, there’s also a tremendous opportunity to impact engagement and culture, productivity, recruitment and more.

Diving into transformative change can be less daunting with best-practice examples from those who’ve made the successful leap. According to The Hackett Group, world-class HR organizations (those that rank in the top quartile by efficiency metrics as well as effectiveness metrics) are exceptionally good at five key things when it comes to digital HR: embracing digital transformation; keeping service customer-centric; using analytics in decision-making; ensuring resources support value projects and not just transactions; and reskilling the HR function.

Embracing digital transformation

Research by The Hackett Group found world-class HR organizations spend more on technology, in part to drive levels of process automation that are two to four times greater than typical companies in key HR areas (but they made up for the spending elsewhere: overall, they spent 23 per cent less than typical companies). This enables them to devote more time to talent management and other higher-value work.

They also make significant use of cloud-based services, with many planning greater adoption levels in the next two years; talent acquisition and learning management applications have the highest adoption rates when it comes to the cloud, followed by onboarding, collaboration and social networking.

“People say, ‘I’m all for digital transformation,’ but they’ve got to think big picture,” said Harry Osle, global HR solutions practice leader with The Hackett Group. “They can’t be afraid to invest in HR. They have to understand what their technical footprint is today, what their optimum technical footprint is tomorrow and then you have to think in terms of investment to get there, rather than costs.

“This is very important because I’ll sit down with a CHRO and they’ll tell me, ‘It’s incredible how much this HR technology is costing me,’” said Osle. “That’s an individual who is just looking at technology as a sunk cost rather than as an enabler. Another CHRO might say, ‘I have a tremendous need to increase my budget for technology because I want to automate these three or four dimensions of my delivery model.’ That’s a person who is thinking longer term.”

With any process, well-designed tech tools created with the customer in mind can make a task more interesting.

Keeping service customer-centric

That digital spend should move organizations in the direction of the environment employees are looking for: mobile, app-based and fully integrated.
“The most critical thing is that employees entering the workforce today are expecting to be able to mirror that instant convenient digital experience they have at home,” said Karen Forward, partner, people and organization consulting leader at PwC. That’s a missed opportunity in terms of performance. “With millenials, 78 per cent of them believe technology makes them more effective at work.”

Most businesses aren’t there yet, however. The Deloitte global report notes that 94 per cent of respondents think their organizations aren’t very good at creating systems or processes that treat employees as customers. Among world-class HR organizations, though, the Hackett Group notes significantly higher use of both manager and employee self-service because they’ve created capabilities with the customer experience in mind. The company points to one example where the organization redesigned the recruiting and candidate onboarding process with easy to locate and digest information, available from a user’s desktop or mobile device.

At PwC, the company has made its performance management process more engaging through the use of digital technology.

“We are spending significantly less time on performance management processes, ” said Forward. “Our employees are able to do performance management on their devices now. It’s really simplified. The beauty of it, for employees as well as managers, is this data is gathered in real time throughout the year and summarized quickly whenever we need it. The data points are much more succinct, it’s fast and it’s easy.”

With any process, well-designed tech tools created with the customer in mind can make a task more interesting.

“The tools we use now actually make it engaging to navigate the HR processes,” said Forward. “The other thing is accessibility; digital and mobile are enabling how people are operating and they’re able to engage at times that are convenient to them.”

Using analytics in decision-making

When it comes to analytics, a recent survey by PwC found 52 per cent of companies worldwide don’t have a dedicated HR analytics team. The Deloitte global survey found that while 72 per cent of respondents recognize people analytics as important or very important, only 23 per cent of companies report having quality HR data to support HR analytics, just 24 per cent are using analytics for performance management and only 18 per cent are using HR data for recruiting and sourcing.

The Hackett Group found world-class HR organizations, by contrast, had built sophisticated information architecture that could provide data to better inform decisions about human capital. These organizations were able to analyze which skills and competencies actually drive high performance, what skills will be in high demand in the future, to enable planning. To improve retention, they could examine which staff were at highest risk of leaving the organization. To benefit recruiting, they could pinpoint the best sources of quality hires. And to enhance leadership, they could determine the most beneficial assignments and learning experiences.

Rogers Communications has incorporated analytics into decision-making, including data from such systems as PeopleSoft, SuccessFactors and Vemo.
“It’s not easy to bring all of these pieces together, but combining the data has a significant impact on the business,” said Tony Cimino, SVP human resources – total rewards at Rogers. “The insights allow us to enhance performance and productivity within the workplace and drive the Rogers plan forward. We can quickly deliver reports, analyses and predictive models that have a true impact on the business.”

Data, says Osle, needs to be tailored to meet the needs of each group.
“HR needs to define what those analytics should be for each business unit, because not every unit is looking for the same analytics,” he said. “Then they need to be able to provide that in a timely way. A lot of organizations are using applications where business units can pick up this info on their notepads, iPads and phones.”

Digital transformation is nearly inevitable for organizations wanting to stay current, efficient and competitive. Ensuring resources support value projects

Freeing up HR to focus on higher-value activities such as talent management and data analysis means divesting people of processes and details that can be automated.

“It’s a little bit of a chicken and egg problem,” said Osle. “You need to invest in those transactional aspects of HR – benefits, compensation and so on – in order to be able to focus on the higher value activities.”

“Self-serve technology and mobile apps have greatly reduced the amount of time the HR team spends on administrative tasks at Rogers,” said Cimino. “This allows us to focus on strategic partnerships and to serve as a valued partner within the business. Naturally, some of these gains are offset by the need to administer and maintain these complex systems, but this is becoming easier with cloud-based solutions “

Reskilling the HR function

As HR business shifts, one of the biggest challenges will be adapting the strengths and abilities of people to meet the changing demands of work. Management will look to HR to help implement the changes needed to become more agile and innovative.

The Hackett Group notes that world-class HR organizations are better equipped to do this; on overage, they have 20 per cent more staff focused on leading business change, and employ more professionals with fewer managers, which indicates a staff with the ability to do more high-value work.
“Technology enables HR professionals to focus on outcomes and solutions instead of transactions,” said Cimino. That doesn’t mean core HR skills will be devalued, though. “HR professionals still need to have great people skills. But we also need to be proficient with technology and skilled at interpreting data so that we can help the business succeed.”

Understanding how HR data and technology can help drive business will a big part of modern HR.

“We need a deep understanding of the businesses we support, so that we can help our business partners make better decisions for the company and for our employees,” said Cimino.

“Strategic insight will be in high demand. HR needs to know what an organization’s critical jobs are, who’s filling those jobs tomorrow, whether there’s a recruiting pipeline for those jobs, how to identify A-players, develop B-players and exit C-players,” said Osle. “If that skill set’s not there, that means you need to completely reskill that professional. So development is important, and also being smart about the recruits you bring into the organization.”

Where to invest? And how much is enough?

Investing in technology comes with a price tag, although there’s not necessarily a direct correlation between cost and degree of success.

“A lot of organizations spend a lot of money, but that doesn’t mean they’re world-class,” said Osle. “They could be fourth quartile. Just because they’re spending a lot of money doesn’t mean they’re spending it wisely. It’s about optimizing your spend and looking at whether you have the right technology footprint to be able to deliver services in an efficient and effective way. Are employees and the management team being serviced in an efficient and effective way?”

Some organizations may need to spend on building a solid foundation.

“To get the foundation for a digital experience, a starting point is moving from legacy to cloud systems, and moving to a platform that integrates mobile, social, analytics and cloud,” said Aaron Groulx, partner, Human Capital at Deloitte. “With a good core cloud technology, your data should be more accurate, your processes are simple and you’ve actually enabled mobile – making sure that you are transacting and delivering the experience mobile first.”

When that’s in place, HR can consider what areas would best serve the organization’s needs and make the biggest impact.

“You need to look at things like recruitment processes, as well as social, mobile, analytics and cloud,” said Forward. “It’s really about how we are improving the employee experience.”

Spending strategically on technology is simply a smart investment, says Osle.

“Over time, organizations who invest in technology see their costs stay stable or reduced,” he said. “Even more importantly, they have a very high propensity to increase the value to the organization.”

Measuring progress

As with most ventures, measurement is key to steering improvement.

“You have to consistently benchmark cost, employee engagement and stakeholder response,” said Osle. “When you look at whether you’re delivering services and leveraging best practices, getting good engagement scores and good stakeholder scores, then I think that’s something that starts to paint a picture. Organizations tend not to want to look in the mirror, but if you benchmark on a consistent basis and against world-class metrics, then you have a great way of understanding where you’re at and where you need to be going.”

Strategic, agile and necessary

Digital transformation is nearly inevitable for organizations wanting to stay current, efficient and competitive. In short order, half of most workplaces will be made up of millenials. Digital is their language, and the more quickly organizations embrace digital ways of working and managing talent, the more effectively they’ll be able to connect with this generation.

The real trick for HR will be finding ways to be strategic and thoughtful, but also relatively quick and agile.

“There’s not an HR or IT executive I talk to who doesn’t want to be doing a really cool platform for mobile and other digital projects, and they absolutely inject digital thinking into their strategy. But the roadmaps are too long and they need to be more agile in their approach,” said Groulx. “Without agility, it’s a long wait for a solution.”

Your employees, though, are ready and waiting.

“My advice to HR is just go faster,” said Groulx. “Be a little bolder with this. Get more agile in how you actually handle and conceptualize this. Do a minimum viable product and fail fast. You’ll be better off.

“I think technology fundamentally changes how HR is going to deliver services. It’s changing the way everything is done.”

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