How to Modernize HR Tech for the Times
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Despite our rapidly changing world, and the changing expectations of employed individuals, Human Resources professionals across many industries have not modernized their business. Just shifting our description of workers from "employee" to "employed individuals" is a modern perspective because it means that people are more than their employer.
Employed individuals bring their life experiences, brain power, passion, creativity, and emotional intelligence to work, thereby creating value for stakeholders. They are individuals first and employed second. This is a significant distinction because as Chief Human Resource Officers (CHROs) modernize their business, they must assiduously create the kind of culture and workplace that best supports employed individuals.
In 2020, I wrote the article "Perpetual HR Transformation," in which I described the need for a plenary people strategy. Without that North Star, you can chart a course, but you won’t arrive at your destination. The same is true in HR.
Take Time for Assessment and Reflection
We can come to work and do our jobs, heads down, every day. But being mired in transactions leads to little or no value for the people or the business. One key enabler for a people strategy is ensuring your company has the right amount and type of HR technology.
HR practitioners rarely have time to plan because HR is constantly in a reactive mode trying to find and hire talent, supporting mergers and acquisitions (M&As), and providing faster service. If HR practitioners don't take time to develop a plan, then outcomes will not improve.
Start with investing time to develop a digitalization/technology plan which will drive a transformation roadmap for the people function. Digitization and digitalization are terms that are sometimes conflated but are distinct.
READ: Digitization vs. Digitalization: The Importance of Transformation in a New World of Work
Digitization is the process of taking something material and transferring into something digital. Digitalization, on the other hand, is something far more complicated. Digitalization is the process of using digital technologies to transform a business model as well as business processes to favor the digital realm, according to Gartner.
An Action Plan
There are key steps to follow. First, find a consulting partner to help assess current state and recommend a future state. For this assessment, you don’t have to use a big consulting company. You can find a boutique consulting firm that understands the HR business and the vastly evolving HR technology market. Ensure that they are system agnostic, which means they are not implementation partners for any HR technology company.
Develop technology guiding principles through which technology decisions are funneled such as:
- Standardize processes where possible
- Eliminate waste and increase efficiency
- Device agnostic
- Digitize whenever possible.
Identify key stakeholders and influencers. Think about who is impacted by HR technology changes, how funding will be negotiated, who will support the changes etc. Invite the key stakeholders to current/future state meetings to ensure open dialogue and transparency. Ask them questions to understand their pain points. This is where culture, workplace, and employed individuals and their experiences must be considered.
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The CHRO should garner support from the Chief Information Officer (CIO) and the Chief Financial Officer (CFO). These allies can support the decisions and required investment. The CFO may consider the total cost of ownership (TCO) and the CIO may push a "platform-first" philosophy, which means buying more products from a platform that is currently used/implemented.
Each leader's perspective is valid and should be considered but should not unilaterally override HR's needs. The ultimate decision should be based on a future state that allows HR to best support the business goals and strategies.
Getting Buy In from Leadership
The HR senior leadership team should review and filter the initial observations and recommendations, considering the business' tolerance for change. Once the final recommendations are crafted, they should be shared with the key stakeholders to obtain feedback and ensure alignment with the business and its expectations of HR.
Develop a multi-year roadmap to prioritize investment in the products and services that will yield the largest return. The roadmap should use the established guiding principles to filter decisions. Consider:
- Redesigning talent systems that will fuel a fluid workforce
- Integrating new modern technologies to improve performance and productivity
- Creating compelling employed individual experiences
- Supplying the best talent to meet staffing needs
Share the plan with the C-suite, all of whom can benefit from a modern Human Resources capability.
Put the Plan in Motion
Once the plan is finalized, HR should create a formal governance structure to oversee the various workstreams with assigned project sponsors to ensure accountability.
Don't assume that an Enterprise Resource Planning (ERP) tool is the answer. Many companies assume that purchasing an ERP platform is the most economical and therefore beneficial. However, total cost of ownership is no longer the litmus test for purchase decisions.
The market for HR tech grew by an astounding 10% last year, according to Cedar Crestone. Companies are throwing money at HR tools right now, searching for ways to transform their workforce, make people more productive, and improve their quality of hire, skills development, and employee engagement, and retention.
The average company has nine talent applications, according to Josh Bersin. Although ERPs have many benefits, they also have difficulty innovating at the required velocity. Smaller, niche platforms can offer lower cost solutions and can fit seamlessly into your technology ecosystem. For example, if internal talent mobility is a key strategy, then consider companies like Gloat, Fuel50, or Eightfold as potential solutions.
Inertia is the tendency of an object to resist change and favor the status quo, which is the enemy of progress. If you want things to be different, you must think and do things differently.
Start with a plan, build a coalition of support, and then execute the plan. HR's value is determined not by keeping the lights on, but by changing and innovating to provide superlative service, build a healthy culture where employed individuals can do their best work, and support company mission and goals.
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