Q&A: Where Advanced Technology Leads HR’s Strategic Plan

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Brent Skinner is co-founder, director and principal analyst of HCM practice at the analyst firm 3Sixty Insights. We spoke with him about how HR has leveraged technology to run their organization more smoothly, help plan its future, and also about new technologies it might adopt.

When it comes to advanced technology in HR, what’s going on today? Is it still all about AI, or are there other things worth paying attention to?

That’s a good question. I think it is a lot about AI. I’m hard pressed to think of something else that is the next best thing after AI. I mean, one thing that you keep hearing about in the periphery is quantum computing, and I don’t profess to have an answer as to how quantum computing is going to necessarily affect our concept of enterprise software or more specifically HCM, but I think that’s probably something to have on the radar.

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One of the things I still hear people talk about is how AI is about to disrupt HR or talent acquisition. It strikes me that AI’s been on the cusp of doing that for five or six years. So what are your thoughts about that? Can you put this into perspective for me?

Well, couple things. First of all, AI’s a placeholder term for some things that aren’t necessarily exactly AI, like machine learning or natural language processing, NLP for short. But just parking that idea there, just to frame this a little bit, I would say that AI – or advanced technologies that vendors are using for their marketing as AI – it’s already disrupting HR and talent acquisition. I think it’s interesting. That’s almost an artifact, that generic headline that you’re referring to. It’s almost an artifact from five years ago, but it’s still being used because AI still feels so futuristic.

Look at vendors like Phenom People. They like to call it an intelligence layer for your ATS. But looking at talent acquisitions specifically, a lot of the ATS systems there are entrenched. These companies are very reluctant to rip them out and replace them with something new because of compliance concerns around the hiring of people. These are all very legitimate concerns, but they need a way for these ATSs to be much more livable on a day-to-day basis, for their recruiters to be much more efficient and effective, which is often two sides of the same coin. So you have players such as Phenom People, which will apply what they call an intelligence layer to your ATS.

But if you really look underneath that terminology, it’s almost like AI is middleware for the ATS. It’s a way to make an old ATS work better and be more modern-feeling. So you can extend indefinitely the life of your ATS. You can put off that decision to replace it now, or maybe at some point in the future when an ATS is somehow not necessary. Harken back to the quantum computing idea. Again, I don’t profess to really understand quantum computing yet, but that’s just something to think about.

Another example is AI or machine learning. In workforce management, you look at a company like Legion. They are all about applying machine learning and what they call artificial intelligence to the scheduling process to empower hourly workers and help companies retain more of them for a longer period of time. So that enables your schedule as a retailer, for instance.

That’s one example of a large hourly workforce enabling your schedule to be much tighter and accurate vis-a-vis the operational needs. And at the same time, it’s also much more attendant to your workforce’s sense of work-life balance because it allows swapping shifts and whatnot on the fly.

So I think those are two examples. Again, whatever falls under the auspices of the term “AI” right now, advanced technology really is disrupting HR already.

Shifting gears a little bit away from AI, what new technologies do you see on the horizon for HR? Which are the most promising?

There’s some things happening in the HRO, the RPO, PEO space that I think are going to be very interesting. Right now, you’re looking at some of the EOR space – employer of record. Here’s where you have organizations, whether it’s through a knitting together of aggregate subcontracting or they’re working with their own middleware that helps a multinational enterprise produce payroll accurately and on time, every pay period with its own existing ecosystem. I think what you’re going to see on the horizon is the emergence of players that have their own technology, native technology.

So not middleware, but native technology designed to make that type of thing happen on time, accurately, every pay period, which is really the foundation for an expanded concept of EOR. So think of the Papayas of the world, of the Velocity Networks, the Globalization Partners, and what they profess to do, which is handle all of the heavy and broad regulatory landscape around compliance from a candidate to the first day of work, and then their payroll moving forward.

I think another area that’s pretty exciting is streaming pay. You may have heard it’s the next level or the next logical step from earned wage access. There’s a lot of players out there that make it, whether it’s DailyPay or even CloudPay, which came up with its own earned wage access, EWA, solution back last summer. I believe it’s a first for a global payroll technology company, taking it to the next level to really support the employee experience. Streaming pay is this idea that you can get paid almost continuously. So you’re continuously getting money into your bank account, according to how many hours you’ve worked, or if you’re salaried, I guess probably the same concept.

So those are some areas of technology that I think are pretty exciting for the space. And what’s interesting is that they both have to do with pay. A lot of a payroll processing is the most mature area of a process automation. I think in HCM technology, if you want to think about the implications of these emerging technologies or capabilities or functionalities, you’re looking at a day in the not too distant future, maybe 10 years from now, where your payroll function may literally need no people in it.

One idea I want to share is that if you’re an HCM leader or a CHRO, I think it’s a very legitimate question to ask yourself today: Do I want to own payroll processing in the HR function? Do I want to own that? Or do I want to just give that to the finance department or accounts payable or whatever, because if I’m going to own that, if I’m going to insist on owning that piece of it, which frankly is the last 10% of the journey for the whole concept of pay. Then I’m basically boxing myself into this conventional, traditional characterization of HR as a cost center.

One last question. Given the experience HR has had over the last several years, do you think they’ve become more comfortable and more expert with advanced technology?

Some have. I guess there’s a few questions around that, but “comfortable” meaning not afraid of it, well-versed in using it at a tactical level or what’s their comfort level with just the advancement in innovation of it and how it affects the evolution of their role?

I think these are big questions that HR needs to be thinking about. I think that, again, leaders in HR must recognize that they need to be technologists along with all other things. They need to understand that technology is, to some extent, going to eliminate some of the aspects of human involvement in HR today. But those are the lower-level. Or, let’s not call it lower-level. It’s that cost center-related stuff that we’ve been trying to minimize anyway, so that HR can spend more time and devote more of its mindshare to being a strategic asset to the organization.

So I think my opinion is that HR should be comfortable with technology because ultimately it enables them to be more strategic. The risk is that they miss the boat and don’t adequately seize the moment to be more strategic. And by the time the technology takes over all that other stuff, they’ll be left with nothing to do, and not enough time left to really gain that strategic foothold, to be involved and be a mentor to the rest of the organization for the employee experience, or really being in charge of those analytics, or shepherding these processes at much higher levels as opposed to babysitting.

Take performance management. That’s a babysitting process for a lot of HR organizations today, but look at ideas such as Betterworks and there are a few other players in this space. Another one is Quantum Workplace and another is Engagedly. They all do something a little bit different around that, but it’s around this idea of continuous performance.

One of them calls it performance and people enablement. It’s this idea of it’s not performance management anymore. It’s a lot more. And it calls for a Sherpa as opposed to a babysitter. The idea is that HR can be less of a babysitter and more of a Sherpa in the future, because of technology.

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