We Should Talk More About HCM Technology Results, Not Systems

Missed Target

HR analysts and commentators might help practitioners and CHROs more if they spent less time talking inside baseball and more time thinking about what employers actually need to get done.

Missed TargetOver on the HR Tech Blog, Sarah Brennan argues that too much discussion about HCM strategy and technology is driven by buzzword-driven conferences and consultant research papers. As a result, HR leaders have a difficult time admitting when they’re not in the leading ranks of the parade. She notes research by Deloitte’s Bersin, which found that only a third of companies will attain “high performing” status by aligning their talent, technology and business strategies. Consider an audience wider than the Fortune 500, Brennan suggests, and even that number if probably high.

What’s worse is that many HR executives won’t admit that they don’t understand “what certain technology does or how it works,” Brennan says. Citing a 2014 study by Accelir that found most HR leaders would “block or postpone a new technology purchase they didn’t understand before asking more junior level people on their team,” the observes that many businesses “are literally running less efficiently due to lack of admitting someone doesn’t know everything. Take that in for a moment.”

Watch What Happens on the Ground

Here’s how we see it: Brennan’s calling out the HCM technology ecosystem for getting wrapped up in the latest and greatest notions before anyone’s spoken seriously about them to HR practitioners or the Finance department. A few years ago, all the talk was about analytics. Today it’s AI, machine learning and social engagement. Just as HR practitioners were expected to magically understand data science back in 2015, now they’re supposed to educate themselves on the intricacies of how advanced systems work.

The discussion about HCM technology is filled with too much talk of things like data science and machine learning, and not nearly enough about how such tools will help HR do its job more effectively.

Interestingly, when Bersin released its list of “technology disruptions” for 2018 a few weeks ago, item number 10 was, “HR departments are becoming digital & innovative.” They’re “thinking more creatively, asking more questions, and pushing vendors to adapt to new management models by demanding solutions that are more team-centric, intelligent and easy to use,” Bersin wrote. We agree with Brennan and think Bersin’s conclusion lacks historical perspective.

Technology advances in waves and early adopters always push what’s going on under the hood more than they discuss what a system actually does. Today in HR, the technology cognoscenti are leading the discussion and the function’s leadership is too intimidated or embarrassed to admit what it doesn’t know. It’s not the first time such a scenario has played out.

Older readers will remember the early days of desktop computing—before the appearance of the Macintosh and MS-DOS, let alone Microsoft Windows. Initial users were as fascinated by how computers worked as they were impressed by the tasks they could perform. Editing written documents became easier as word processing gained traction, crunching numbers stepped up to an entirely new level when Lotus introduced its 1-2-3 spreadsheet, and the Mac’s desktop-publishing tools allowed anyone to lay out and print a newsletter. While the advances in productivity quickly became apparent, there were some rarely-discussed hiccups along the way.

For instance, since desktop publishing allowed most anyone to create newsletters, the world was flooded by a lot of really ugly newsletters. The Mac didn’t magically instill graphic-design skills, nor was it intended to. That didn’t prevent management from wondering why the internal newsletter sucked even after they’d bought the HR department a Mac.

The ‘digitalization of HR’ isn’t a disruptor. It was and is inevitable.

And so it is today. Not long ago, we asked an executive how HR was supposed to leverage people analytics when practitioners had no training in data. In 2014, HR pundits both criticized practitioners for not embracing data and advised organizations to fill the gap by hiring data scientists to optimize their workforce. They didn’t consider that the median salary for a U.S. data scientist that year ran over $100,000.

How many companies, we wondered, would be willing to spend that kind of money on a data scientist dedicated to HR? Not many. Three years later, the usability of analytics tools has improved and HR professionals aren’t balking so much at data’s value. Vendors recognized they’d gotten ahead of their user base and set about fixing the problem.

This brings us back to the suggestion that HR’s digitalization is disruptive. It’s not. HR’s digitalization was and is inevitable. In the last few years the idea that HR might offer something beyond operational value has become a concept more executives are willing to consider. In a tight labor market, the notions of engagement and employer branding aren’t so easy to dismiss. Employers have finally acknowledged that the traditional performance review offers no value. Though they may have used different terms, rank-and-file practitioners have been talking about these things for years.

Also, the realization that there are real business reasons to nurture the workforce has been accompanied by technology’s changing economics. Organizations can subscribe to cloud-based HCM solutions for a fraction of the cost of installing and maintaining an on-premise system. At almost every level, the cost of hardware and software has plunged to the point where companies can count on their employees having access through either business-owned or personal devices. And, the expenses involved in starting a company to develop new HR tools has plunged, meaning more employers have more options, whether they’re a caterer with 10 employees or a multinational with 250,000.

Why HR Can Dream

All of this has given HR, perhaps for the first time in its history, the ability to dream. Where in the past, the department may have pressed CEOs to spend more time visiting remote facilities, now it can offer up video town halls that will increase the executive’s visibility without making her get on a plane. Where once management and workforce was resigned to going through the motions of performance reviews that were, to put it charitably, a joke, today’s technology hosts performance management programs that provide feedback in real time and tie into learning platforms to help workers improve their performance.

Serious dollars are still at stake, but the amounts HR needs to take on a more dynamic role has dropped to the point where budget requests aren’t so easily dismissed. Indeed, several HR leaders recently told us how their Finance departments, on their own, have recognized that adopting new HCM technology could actually save the organization money.

But here we have Brennan saying that the HCM tech industry’s talk of machine learning, AI, predictive analytics and big data “are met with snickers or blank stares at a lot of organizations” and that many executives claim to have embraced new technology when they really haven’t, because in this day and age, “no one wants to admit they’re behind.”

Serious dollars are still at stake, but the amounts HR needs to take on a more dynamic role has dropped to the point where budget requests aren’t so easily dismissed.

We don’t argue with the statements but suggest they have to be kept in the proper perspective. Consider the words of Steve Boese, one the annual HR Tech Conference’s organizers. In his post-mortem of last month’s event, he noted that the adoption of cloud and mobile technology and an increasing use of workforce analytics has been a steady theme among HR media, analysts and bloggers since around 2010. What the 2017 conference demonstrated, he wrote, was that “all these trends/predictions … have been (or are in the process of being) realized in most organizations and by most HR technology providers.”

We’re Having the Wrong Conversation

From all of this, we reach three conclusions:

  • Brennan is right when she says HCM technology isn’t being adopted as fast as most people claim it is.
  • HCM technology is being put to use by a growing number of organizations, just not at breathtaking speed.
  • HR isn’t being given nearly enough credit for its progress to date. As Boese implies, employers have adopted a wave of new approaches, but at a pace that reflects the realities of doing business.

These add up to a dynamic that vendors, analysts, HR leaders and corporate executives should spend more time thinking about: In the last few years, we’ve become accustomed to talking about technology as the driver behind pretty much everything. This has led many on the sell side of the equation to talk about machine learning, AI and such without considering that their customers really don’t care how something gets done, as long as it gets done correctly and as quickly as possible.

The discussion around HCM technology is filled with far too much talk of things like data science and machine learning, and not nearly enough about how such systems will help HR do its job more effectively, so it can integrate itself into an organization’s strategic thinking. Recruiters, for example, really don’t care how your product generated the list of candidates worth pursuing for a role. They only care whether those candidates are indeed worthy.

“HR technology can only be as strong as the strategy it supports,” Brennan says, and she’s correct. Vendors and analysts need to spend more time talking in terms that HR understands, and be ready to put more money into educating people about how their products work. We don’t hear that piece being discussed nearly enough.

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