After the disruption of 2020, Ernst & Young rounded out the year with this advice for business and HR Professionals alike: "Your future people function should operate horizontally across your organisation to activate experiences that drive long-term value. EY's research indicates that HR Professionals still spend about 86% of their time on admin work (and in 2020, it was likely even more than that). Their conclusion? To transform HR, leaders must accelerate digitalisation to liberate HR from admin (yes, this is still one of the main roadblocks for HR), and at the same time (that is concurrently and in an integrated manner), there needs to be a shift toward making people, not technology, the priority in the workplace. In this week's HR Blog we'll take a deeper dive into what HR transformation looks like when technology is being harnessed to serve your most important assets - your people.
HR Transformation: Both Technology AND People (Not Either / Or)
According to Gallup, HR transformation has historically been about changing the way HR delivers its services. Search for 'HR transformation' on the internet they say, and the majority of results will probably be about digital HR transformation. Since the explosion of digital HR solutions, technology has been front and centre of transforming the way HR services are delivered across most organisations. While #HRtech forms the essential foundation for the transformation of HR, it is by no means the entire equation.
Gallup's research (and their work with organisations across the globe) all points back to the fact that HR needs a different kind of transformation to the one envisaged in the early part of the 21st Century. Gallup's perspective is that the real HR transformation is about fundamentally changing HR to meet the needs of a modern, digital, dispersed workforce in a rapidly changing world. Rather than changing the way the business experiences HR they advise, real HR transformation should be about transforming the role of HR in business. HR technology (as well as other #workplacetech) is an enabler of that transformation. It needs to be in place to generate efficiencies and reduce the 86% HR admin burden without question. But going digital is no longer the sole aim of HR transformation.
Gallup's take is that HR needs to be much more integrated with business, and business needs to be integrated with HR. Breaking down silos still needs attention. As does changing the way leaders lead and managers manage employees. HR transformations that restructure HR into centers of excellence reinforce this idea of HR partners being internal experts, consultants, and advisers to the business.
To really transform the way businesses operate, HR transformation requires a significant shift in cultural mindset that aligns employees to necessary technological or structural changes. For example, Gallup's Real Future of Work research illustrates that it is actually mindset that predicates agility - more so than other factors like team structure or what technology your business has in place.
While it is important that employees ahve the right tech and the right tech training to do the work required, also HR should provide training that teaches leaders and managers the soft skills that drive change. These include focusing on strengths, instilling purpose, building relationships, providing ongoing, meaningful feedback, and creating great team environments. Essentially, facilitating the transformation from boss to coach.
A recent Gallup study revealed that organisations that invest in learning programs focused on the concepts of strengths, engagement, and ongoing performance development realised an average 14% increase in the proportion of employees who were actively engaged. Compare that with an average increase of 8% in companies that did not invest in such learning programs. Another worthy point of note is that managers who received training on these soft skills experienced twice the productivity gains of those among managers who didn't participate in these strengths-based courses.
The Drivers for HR Transformation, 2020 and Beyond
The continuous disruption to, and changing nature of work, make an HR transformation a strategic imperative for all businesses. Typical external drivers for HR transformation continue to be the war for talent, a new wave of regulations, rising employee expectations, technology advances, and changing business models and strategies. Add to that mix the '2020 effect' and you've got a volatile combination. Internal drivers for HR transformation include poor employee experience, time-consuming admin, lack of a holistic approach to managing the employee lifecycle, as well as an inability to use real-time data and analytics to drive human resource decisions.
Once the business recognises (through choice or when forced by the pressure of external circumstances) the need for (and benefit of) HR transformation, the next step is to establish a core team and fund the initial efforts for crafting an HR transformation business case and roadmap. At this stage, what is needed are strategic thinkers and operational experts who can envision what your transformed HR function will look like, and how that will feed into the wider transformation of your organisation as a whole. At this point, you're still in a conceptualisation, not an execution phase.
Here's one approach to building an HR transformation roadmap:
-
Compile the goals, objectives and desired outcomes. Common deliverables include:
-
Internal factors.
-
External drivers.
-
SWOT analysis.
-
BHAGs (Big, Hairy, Audacious Goals).
-
-
Document your organisation's current state:
-
Current state process analysis.
-
Current state of technology analysis.
-
The present status of people analysis – competencies, capacity, etc.
-
Current state legal, compliance, and risk analysis.
-
-
Envision the future state your organisation aims to bring into being. Common deliverables include:
-
Future state vision.
-
Scenario analysis and rehearsal/s drills.
-
Future state technology vision and implementation approach.
-
-
Conduct gap analysis. Common deliverables include:
-
Gap analysis between current state and the future state.
-
Where can you find quick wins.
-
-
Evaluate alternative approaches. Common deliverables include:
-
Strategic options and analysis.
-
Solution options and analysis.
-
Cost estimates.
-
High-level benefit streams per option.
-
-
Select the recommended path. Common deliverables include:
-
Options comparison and recommendation/s.
-
Analysis of the recommended path – risks, rewards, and realisation framework.
-
-
Craft a transformation roadmap to implement the best transformation option for your organisation. Common deliverables include:
-
Transformation roadmap with phased and sequential deliverables.
-
High-level workstreams and structure.
-
Embracing Technology as a Powerful People Enabler
Technology has been (and will continue to remain) central to the evolution of HR. #HRtech has evolved to deliver people experiences that enable and inspire employees. They do this by reducing friction across multiple touchpoints throughout the employee lifecycle, at a price point that also cuts costs. Making HR administration a self-service experience for employees is important. Historically, employees and businesses might have had the opinion that self-service was just a way to cut costs and throw that work back into the business. However, just as online banking is generally more flexible and efficient than going to a branch, both employees and managers do actually want self-service HR that works, meets their demands, and fits with their schedule.
Ultimately, self-service that actually works provides your employees with digital experiences they appreciate. This liberates the limited amount of capacity you have in your HR function to deliver the services the business wants and needs.
Another example of how #HRtech can be harnessed for inspiring experiences is in learning tools. Too often someone seeking information on how to have a difficult conversation with an employee, for example, or coaching for other aspects of performance, has to follow a trail of links into dark corners of the intranet. The latest tools, however, have what the person wants: ease and responsiveness, leading them right to what they’re seeking and suggesting relevant follow-ups. Such tools also provide just-in-time learning content 'in the flow of work.'
These changes aren’t being made simply for the sake of trimming spending. It’s about reinvesting in people services that really matter to the workforce and creating long-term value for the business. The result is a function that is driven by analytics and data and delivers genuinely satisfying experiences – the same thing that a customer of the same company may readily expect.
THe New Metrics and Data Frontier: Marrying Experience Data with Operational Data
Blending experience data (X-data) and operational data (O-data) is a key component of Experience Management (XM). To get the right mix, you need a continuous flow of both X-data and O-data through your digital and decision-making ecosystems. X-data and O-data on their own can be a useful tool for decision-making. But X-data plus O-data in the right combination is also an extremely powerful combination. It enables your organisation to illustrate, interrogate and understand exactly what customers and employees are doing, what they are thinking, what they want, what the competition is doing, and what disruptions are possible from a myriad of strategic perspectives. This combination of X and O data is quantifiable and impactful. By managing and measuring experience and how it correlates to KPIs of interest to the business, the HR function will be able to clearly demonstrate the value it’s adding. It can also set benchmarks and targets against which HR leadership can constantly review and refine performance. How can this type of organisation and employee-wide data coherence be used to transform HR?
An example of how this might be applied in the workplace context post-2020 relates to how employees will use the office going forward. Once the hub of all workplace activity, your people may now only use the office for quite specific but limited activities. To translate these new ways of working into an HR transformation framework, Ernst & Young have developed three lenses through which to focus on the outcomes that will bring the most benefit to your people: Me, We, and Here.
-
Me: The HR function of the future will be built on people-centered design, which means asking what the individual employee needs to operate effectively in their role and projects. These include personal desires, needs, aspirations, and development.
-
We: Here the focus is on the team or unit, how they operate and collaborate and how they are rewarded. 2020 (and beyond) required people to work from a range of unusual locations, using a suite of remote collaboration tools, with continuously shifting roles and responsibilities. What happens to culture in these new conditions? How do you replace top-down management when everyone is dispersed? How are teams rewarded?
-
Here: This relates to the enterprise environment and how people are affected by its physical, social, technological, and organisational aspects. The key is to create human-centric, safe, physical workspaces that promote health and engagement, provide a holistic technology experience, seamlessly remove friction and keep monotony at bay.
HR Digital Transformation as the Foundation for Broder HR Transformation
Digital transformation is defined as the transition of a business based on traditionally manual processes, to a business that has technology as its core in all its functions: internal (employee-facing, operational) and external (customer-facing). Transformation is thus the outcome of digitisation. It isn't actually the process of digitisation itself. The most extensive transformation in HR this century has been just this type of complete transition from traditional, manual HR processes to digital, automated ones. This HR digital transformation affects all organisations, from the largest global companies to the smallest local businesses. 2020 accelerated that transformation as many businesses needed digital solutions to enable them run remotely.
While many businesses had already begun their HR digital transformation journey, 2020 was a bit of a shock for those which had not. The challenges of managing a remote and highly distributed workforce illustrated the necessity for every business to adopt digital HR processes and best practices. From hiring to training and managing performance, you need the right HR tools to take your organisation's HR completely digital.
As digital transformation initiatives continue to accelerate, now is a good time to think about who in your company is leading these efforts, and who gets a voice in those plans. After all, digital transformations are really about people, not technology. Although digital transformation is heavily technology-centered, it’s a mistake to only focus on roles and departments that are tech-intensive. Digital transformations are just as much about the people as they are about the technology you choose to implement. It would be easy to make the mistake of viewing HR digital transformation through a single lens. Doing so can make it look overly simplistic. However, when you take into consideration the implications for all affected employees, business units, functions, and geographical groups, it becomes much more complex.
Digital transformations are about helping people make better decisions, based on more accurate data, so that they can take faster actions. That’s why there needs to be multiple voices and stakeholders from different parts of the business involved in any type of transformation. Without those varying perspectives, you run the risk of getting a long way down the path of training employees to follow new processes and alter behaviour before having an opportunity to assess if what you're doing is both appropriate and adequate.
What it all comes down to is this - everyone needs to understand and support digital transformation efforts for them to perform to expectations and bring value - to the employees and the business. There should be leadership in place who can inspire enthusiasm for (and appreciation of) exactly how digital transformation can benefit the work and careers of everyone involved.
How to Lay the Right Foundation for Transformation
The HR function can’t expect to keep up with a changing world by remaining static itself. HR professionals need to equip their operations (and themselves) with the tools and skills needed to function in a rapidly changing global environment. To transform at scale the strategically relevant and impactful people experiences that fuel consumer, financial and societal value, HR must abandon (once and for all) the comforts of a vertical silo and operate horizontally across the enterprise. It needs to have its hands engaged where people experiences are created or destroyed every day - right in the middle of the day-to-day BAU of business. HR should take the lead in pulling the thread that weaves together strategy and operations, but to do so they need to be liberated by digitalisation so as to enable agile team formation and instant-access people services.
How can core HR processes like recruitment, succession, and performance management be made more efficient and effective? How can HR actually get out from under spending 86% of their time on admin to become a valuable business partner, central to strategy discussions with a distributed workforce? Today's workplace requires a new kind of HR and these are just some of the key drivers of change that EY has identified:
-
A leaner team: Employee service centres, self-service, and enhanced technology (along with increased outsourcing of operations, strategy and design activities) will decrease the size of the HR function as organisations are pressured to do even more with even less. The trend to smaller staff sizes with clearly defined roles will continue. Investments in HR will focus on closing the skill gaps in key areas.
-
Talent strategists: HR management will lead the strategic identification, development, and retention of talent with simple and streamlined processes and systems. HR will guide managers in talent decisions, equipping them with a clear understanding of their key players through metrics and helping them determine the best course of action by modelling possible interventions and their implications. Data-driven insights will underpin success in this area.
-
Innovation: HR will position itself to anticipate how work and employee relationships are changing and will be the first to adapt and respond. HR leaders will change policies/programs and leverage strategic partnerships and technology to support the business.
-
Technology leaders: HR leaders will understand and embrace technology with a willingness and ability to use data to drive business decisions. HR will be ahead of the HR technology market and play the HR technology strategist role in close collaboration with IT.
-
Employee experience designers: HR will lead in applying B2C customer experience concepts to the employee experience in order to create an environment where your people want to come to do their best work, and want to stay long term. New capabilities in human-centred design and service design will become core to HR’s approach to servicing the organisation.
People and Technology Working Together
As you know from personal experience, people and technology don't operate in isolation from each other, not in your personal life, or in your worklife. This is why any type of workplace transformation, but especially that of HR, needs to integrate both sides of the equation.
This is one important consideration HR Professionals need to focus on before you dive into your own transformation journey. If you are waiting for your HR transformation project to be completed so that you can share the final results with your leadership team - history and decades of experience from your peers illustrate that there is no final destination to be achieved. As we shared last year in a blog about cultivating a culture of change, nothing is static, everything is in a state of flux, and this will continue to be 'BAU' going forward. In the future world of work, even the largest organisations will need to consist of agile, collaborative teams that can act quickly, change in the flow of work and respond intelligently to whatever situation work/life demands. In this rapidly evolving future, delivering people insights to business leaders will not be optional – it will be the benchmark of an HR strategy that facilitates the ongoing transformation of employees, teams, and organisations as a whole.
Build an Adaptable, Agile Business That's Designed For Growth With an HR Software Platform
Is your business yet to embark upon the digitisation stage in your HR digital transformation? Or have you made a start but discovered that the solution/s you chose aren't flexible enough to meet the unique (and changing) needs of your business? Consider choosing with an HR Platform to help streamline your data, processes, teams and HR function. According to Sierra Cedar, the average organisation now has 11 systems of record. The typical recruiting department has more than 10, and the typical L&D department has almost 20. So your capacity to architect a digital ecosystem/network through the integration of solutions and Apps (and get as many of those solutions under one roof as possible) continues to be important.
Take heed of the lessons from 2020. In today’s world, you need agile systems that can adapt, morph, and change to meet new (unforeseeable) needs. Follow Josh Bersin's advice and look for configurability and adaptability in all the HR platforms you subscribe to from this point forward.
If you're an HR Professional who is still buried under a pile of paper forms or Excel spreadsheets, or if you're using #HRtech that hasn't reduced your HR admin below 86%, there's never been a better time to start and streamline your digital transformation. Not sure where to start? We've created this quick guide to help you evaluate HR software Platforms. Just click on the button below :)