There are a number of major disconnects between HR system vendors and the solutions that clients want, according to a recent research report, which found that one of the key gaps in what HR teams are receiving from their HR technology is around value.
HR system vendors, and the HR industry as a whole, have been very good at deploying systems that aim to add value to HR or solve HR-centric issues, according to Michael Specht, senior advisor with Navigo Research, which conducted the research report.
“But we have not been good at focusing on adding value directly to the day-to-day life of managers and employees,” he said.
“This is no better demonstrated in the great take up of technology in areas that focus primarily on compliancy or the automation of HR administrative processes – for example payroll, OHS, and time and attendance.”
However, Specht said areas that focus on the interests of the employee, such as succession planning, talent management and workforce planning, have lower overall levels of technology adoption.
Another major gap is around customer service, according to the Australian HR Technology Report: Know What’s Going on, and How to Respond, which garnered responses from almost 300 different organisations representing some 690,000 employees.
The survey asked respondents how likely they would be to recommend their core HR system to friend or colleague (a net promoter score) and across the survey the result was -46, or some 75 per cent that would not recommend their solution.
“In fact none of the top ten most adopted solutions came close to reaching zero,” said Specht, who added that the closet came in at -18.
While the results are not the best, Specht said Australia is not alone when it comes to dissatisfaction with HR technology.
The Sierra-Cedar 2014–2015 HR Systems Survey, for example, found that in the US core HR system vendors received a NPS score of -35, with licensed on premise systems receiving the lowest rating.
A third gap in HR technology and customer satisfaction is in the area of deployment options, Specht added.
“Even with all of the talk of cloud technologies in the press, a majority of core HR systems are still deployed in an on-premise manner,” said Specht, who added that just over two-thirds of survey respondents stated their core HR system was still on-premise.
“However, year over year we have seen Software as a Service (SaaS) adoption grow from 1 per cent to 5 per cent, with 24 per cent of respondents saying their organisation preference was SaaS,” he said.
“While organisations are moving to SaaS solutions there are a number of barriers they will need to overcome, the major one being concerns around security and data privacy.
“HR teams need to remember that many SaaS providers total business model is predicated on the delivery of solutions over the internet; this means their security practices are usually of a higher grade than your average internal IT department.”
Skillset gaps for HR
The research report, which was recently launched at Saba’s ANZ and APAC Regional Summit in Sydney, also found that there are a number of skillset and capability gaps in HR teams when it comes to technology, big data and predictive analytics.
The first gap relates to a general understanding of technology and particularly emerging technology, Specht said.
“Technology is become a critical part in business today and not having a good understanding of its capabilities will limit the growth opportunities for organisations,” he said.
A related gap is around data, and being able to understand and turn data into actionable insights is a critical first step, according to Specht.
“The best way for HR teams to migrate from producing basic reports to delivering deeper analytics insights for the organisation is to start telling stories about the data,” he said.
“Humans at their core are analytical creatures, and given a single number we immediately want to know the answers to questions such as why, what does it mean, and what do we need to change? Bring data to life in the context of your business operations.”
Another pitfalls for HR teams around technology is that they need to remember HR technology projects are not just about technology, Specht said.
In fact, he said an HR technology project is 45 per cent process, 45 per cent people and only 10 per cent technology, and this means that budgets and resourcing allocated to these types of projects should reflect these breakdowns.
“We need to remember that solutions that add value to employees and managers will, by their very nature, be deployed to employees and managers,” he said.
“This makes the rollout of your HR technology project one of the largest change management activities you will undertake.”
Reshaping HR system vendor relationships
There were a number of other key findings for HR executives in the report, said Specht, who named the top three as the age of technology in the workplace, relationships with HR system vendors, and redesigning business processes.
“The solutions you purchase will be used in your business for many years,” he said.
“For example, 55 per cent of core HR systems have been in place for more than seven years.
“This means solutions that are deployed into your workplace over the next year will most likely still be in place in 2020.
“While HR teams are starting to think about how the workplace will look and operate in 2020, they need to ensure that the tools available to employees support this vision of the future.”
A related issue is the relationship with technology partners, and Specht said “many times we hear organisations are going to market to replace systems, and one the directing facts is the relationship with the vendor has broken down.
“We see selecting a vendor for your HR technology platform as very similar to a marriage.
“You need to ensure not just a functional match; you need to ensure the vendor’s vision and values align to those of your organisation.”
Specht added that the relationship with a supplier is one that needs constant work, and pointed to a growing need for ongoing vendor management and a deeper understanding of a HR system vendor’s business case.
Another key finding relates to business process and service delivery, and Specht said two of the major themes from the report include growth in mobility and data analytics.
“However both of these areas are not just about technology,” he said.
“HR executives need to remember that most of their business processes were designed in a period of data scarcity and a lack of tools to enable mobility.
“However today’s business is full of data, and our employees are more mobile than ever before. “Organisations need to look at redesigning their business processes to leverage this world of data abundance and mobility.”
3 steps to bridging the HR-technology gap
While the idea of HR becoming more comfortable with technology sounds easy, for many people this is not the case, observed Specht, who recommended three steps for HR professionals:
1. Find a technology mentor, maybe a younger staff member and set up a reverse mentoring program
2. Try to read, listen or watch an article, podcast or video about technology every week. This can be as simple as reading the technology section of your favourite news publishing organisation.
3. Use technology in your daily life, and experiment with it. For most technologies they are very hard to break. Don’t delegate these tasks to your assistants or junior team members; take the extra time to learn yourself.
“Become familiar with data and statistics, even if it is just at a 101 entry level,” he said.
“This will help you learn to tell stories with your data. Many people wonder how to get started with data and analytics.
“A very simple ways is to ask your CEO or board what are the three things about people that keep them up at night. Focus here.”
Given HR technology projects are 90 per cent people and process and only 10 per cent technology, Specht said investment in change management is critical.
This type of change management needs to be more than just training courses, and he said change management programs need to focus on ensuring you gain 100 per cent user adoption from solutions.
“Your employees should love the software that is deployed,” he said.
A glimpse into the future
Technology is rapidly changing the way business is done in many ways, however, Specht said predicting the future of how the HR function might look in the future is “very hard” from a technology perspective.
“We just have to look at how many of Back To The Future II’s predictions from 1985 as to what the would be like in 2015 came true. Not many,” he said.
However, Specht suggested there would be increased deployment of more employee centric technologies.
“As mentioned earlier, we have been very good at deploying systems that aim to add value to HR or solve HR issues,” he said.
“But what we have not been good at is focusing on adding value for managers and employees. It is this reason why we see low take up of self service type solutions.
“We will be seeing the growth in technologies such as wearables, predictive analytics and machine learning systems,” he said.