Article: Cutting through the hype of HR Tech

#TechHRIn

Cutting through the hype of HR Tech

Josh Bersin discusses some of the most pressing challenges, trends, and opportunities in the HR Tech industry today.
Cutting through the hype of HR Tech

Technology is a response to a problem, and the problems facing the business and HR world today are very complex. Almost everyone today has a pair of headphone on because they have so much to do and are distracted all the time. People have too much incoming information to focus on, and as a result, there are people in coffee shops and gyms replying to emails and taking calls. Similarly, there are people who are getting work done on weekends and while they are on vacation. Despite working long hours, employees are disengaged and distracted. To understand how we reached here, let’s first take a look at the factors responsible for disrupting the modern workplace: 

Forces disrupting organizations today

• Groundbreaking changes in demographics: The changing composition of the workforce is rewriting all existing rules as today’s employees have different expectations from their employers and come with a different set of priorities. 

• Tremendous war for skills, both technical and soft skills: The changing business paradigm has disrupted the demand and supply for new-age talent that is equipped with relevant skills. 

• Radical changes in expectations for work and employees: The current economic growth cycle has altered customer, investor, and employee expectations from organizations. 

• Challenges with engagement, productivity, and employee experience: Employees are overwhelmed, and the nature of the ‘always on’ relentless digital experience is impacting productivity by amplifying stress levels. 

The top issues on executives’ minds 

There is an incredible alignment between the challenges facing HR leaders and HR executives. Up until a few years ago, HR was doing a lot of business-critical functions, but it was sidelined to focus on building products, selling more, providing customer service, etc. The notion that HR works from the background is changing, and CEOs are giving it their top-most priority because they realize that if they can’t find the right people and realign the skills of their existing workforce, they won’t be able to grow. Most recent research and studies have consistently shown that the most pressing issues for CEOs are skills, measuring and driving performance, building agility, and developing leadership. This has stepped up the demand for HR to provide solutions that are aligned with the broader business goals. 

The new HR-tech focus: Making work better 

As a result of the changes in the business climate, the workforce, and the strategic nature of HR, the tech market has also changed. Let’s take stock of these changes: 

Automate

Traditionally, most talent management systems and HCM platforms were forms with tabs that were primarily used to put administrative and transactional HR processes online. Thus, the goal was to automate existing processes and records. 

Integrate

Organizations started implementing integrated systems that went one step beyond than merely automating existing processes. Therefore, a new set of tools were developed for managers and employees to hire better, train better and manage people better. Models and matrices were designed for goal-setting, learning, training, and hiring; however, employees and managers were never able to use these systems like the HR intended them to do. 

Engage 

Recently, cloud computing has allowed organizations to upgrade existing software with new tools and features that promised engagement and improved productivity. However, these expectations didn’t deliver, and the benefits of cloud-based systems have not entirely been met in the way they were envisioned. Sure, there are benefits of the cloud, but these systems were nowhere close to the enormously engaging and interesting models and experiences we expected. 

Perform 

This led to the next and current phase, wherein new generations of software systems are designed to help employees get their job done. Today, the most powerful and successful HR-tech tools require little-to-no training, make employees more productive and assist employees and managers to work better, manage their careers better, and hire better. These new systems can be best described as experiential systems that deal with daily life and work as a series of experiences and not as filling forms or transactions. 

The big redesign: experience platforms 

If you went back in time and heard the discourse on HR-tech a few decades ago, there was much talk about integration, hire to retire, having a single platform for all HR data, ATS, Talent management, and LMS. All these systems had the word ‘management’ in the middle because they were essentially systems to manage HR practices; not engage employees. We were building job models, competencies and the vision of talent management systems were that there would be a single global competency model, and all the other HR-related activities would revolve around the same.

Today, to succeed, HR and the tools they used by them have to deal with issues like well-being, self-directed learning, career opportunities, helping candidates find the perfect role. We have to give people the tools to assess and improve their productivity, and these are capabilities and features that we didn’t even think about in the last decade. 

The big shift: Towards experience systems

One of the most confusing things in the HR-tech industry right now is that everybody seems to be doing the same thing and it becomes hard for new people in the domain to figure out what distinguishes one product from the other. While everyone is clear that they want to design a great employee experience, not everyone agrees on how to go about doing it. The challenge is that the original experiential layer in traditional ERPs is still just a bunch of panels and forms, and the top layer is employee experience. This is a brand new category of software has the tools which handle incoming employee needs and provide informational and transactional support. We used to think that the ERPs would do everything for the employee, but the reality is that several integrated tools are sitting on top of it. 

Thus, conventional learning management systems, applicant tracking systems, talent management systems, compensation systems, succession systems, and performance management systems are being re-imagined as talent experience and management systems that manage the employee talent experience. For instances, employers are simplifying the process of lateral movement and shifting roles within the organizations because they realize that finding a job outside the organization is much easier than finding one inside. 

HR technology architecture: 2020 and beyond

There’s no doubt that HR-tech is focusing on building an engaging employee experience, and companies are using more than one platform to ensure the same. While most big vendors claim that they have ‘end-to-end’ solutions, the truth is that they have not been able to keep up with the changing demands and most are stretching themselves thin by offering too much functionality. Medium and small companies use anywhere between five to 15 different applications and the last survey done by Stacey Harris showed that the average number of systems of record a company is using has gone up from 11 (in the preceding year) to 12. While a growing number of applications sounds like a headache, most of these systems are deeply integrated and are also replaceable some degree. 

One of the most significant benefits of a cloud-based system is that it can be easily replaced, as compared to an on-premise system. Companies today are buying product A, using it for a few years, and then replacing it with product B, very seamlessly. Thus, even though we have more systems, they are more fungible, flexible, and replaceable than ever. 

Finding the right solution

So how do you cut through the hype and find a solution that is just right for you? 

• Focus on the basics: You don’t invest in great well-being, recognition, or learning systems if people aren’t getting paid on time. Furthermore, with the advent of AI, the quality of your data is more critical than ever. Thus, make sure that your core system is operating well; people are using it effectively and that the data is good and high-quality. 

• Evaluate systems based on utility, not features: Instead of being impressed with a long list of features, focus on understanding if your employees will ever need or use them. 

• Pilot systems with employees before you sign the contract: Prototypes and pilots are more crucial than ever because they teach you how well the system will be adopted. 

• Hire an IT architect to integrate data: We are in an era where IT and HR are working closer than ever before because so much of the cloud-based architecture is integrated with other cloud-based systems. Thus, you need someone who knows their way with data. 

Find and develop an employee experience platform: Think about what is going to be your employee experience and choose a platform that focuses on the same. 

Vendor checklist 

In addition to evaluating the product, you need to assess the vendor and the company. Here’s a simple checklist to keep in mind:

• Does the vendor have a customer of your type, in industry, size, and geography?

• Does the vendor have references? What is their experience with the product, company, support?

• Does the product meet your functional and industry needs?

• Does the CEO and management team have the experience to scale?

• Does the vendor have a vision for what’s next? 

The bottom line is that if no matter if you buy or develop an advanced system for your employees, they won’t use it unless they think it is valuable or it is helping them in getting their job done. Organizations and leaders need to provide their employees with tools that support them in doing their work and, above all, cultivate a pleasant experience. As we move from the transactional to the experiential way of HR, technology will naturally play a critical role, but a lot depends on what technology we use, and how we use it.

(This article is based on the session ‘Cutting through the hype of HR Tech’ by Josh Bersin, Global Industry Analyst, Dean of Josh Bersin Academy, at TechHR 2019.)

Topics: #TechHRIn, HR Technology

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