Blog: Digital HR: Is it clouding our thinking?

Strategic HR

Digital HR: Is it clouding our thinking?

The rapid increase in the availability of cloud-based HR technology has, in many organizations, outstripped our ability to acquire and develop skills such as business acumen.
Digital HR: Is it clouding our thinking?

We all know that COVID-19 has had major impacts on HR processes and HR professionals. Many organizations have had no choice but to equip and enable employees to work remotely even when, only weeks before, they argued that  this  was not possible! Some HR functions managed the impossible within a week!

At center stage has been the rapid implementation of digital tools of various types such as video-conferencing. But have these tools proved as useful and as impactful as hoped? Have these furthered HR’s strategic digitization plans or have they clouded our thinking?

COVID-19 has had a major impact on HR and given us the right and the power to demand technology to support productivity and development.

But, the speed wIth which thIs has happened may have clouded our thInkIng. Almost daily we see reports like, “organizations that implement:

• Cloud-based HR digital solutions are W% more likely to report higher productivity;

• Cloud-based virtual communications tools increase staff interactions with their managers by X%;

• Employee self-service increases employee engagement by Y%;

• HR analytics improve diversity by Z%.”

But, are these relationships causal, mere correlations, or simply examples of randomness bias? We seldom have access to the data to discover the truth about each claim … but they all make great stories for us to read and they offer us a quick solution to our own challenges!

However, as HR professionals, we should not develop strategies based solely on stories and vendor claims.

Rather, we should base them on evidence, our own knowledge of our organization’s needs, and an in-depth understanding of the power of contemporary technology. I have long argued that, in addition to core HR knowledge and expertise, senior HR professionals need five other skillsets:

Business acumen – understanding how each and every HR process impacts the organization’s bottom- line (financial or social responsibility, etc) so that they can prioritize strategic initiatives, including digitization projects.

I hear many HR professionals arguing that they need the latest technology for managing their talent and I am sure that they do need such tools. But they also need to know what the payback will be and how much that justifies their spending. I find few are skilled at measuring the financial or other costs and benefits of HR processes.

It reminds me of a situation many years ago when a department manager, in a company with a recruitment freeze, wanted to recruit an additional employee. They presented their case to the company’s senior management team. During the Q&A session the manager was asked by the HR Director, “So, you say you need one extra person. How do you know that? Perhaps you need two?” The manager’s response was, “Well, you know how difficult it is to measure people. So, yes, two would be great. Thank you.” The director adopted a sterner expression and responded, “Well if you can’t measure it, you clearly don’t know how many you need. Come back to me within the week with some solid justification for each of your existing staff or I will instruct you to reduce by one.” In well less than a week, the manager had put together measures and justifications … and so had most of the managers to whom they recounted their experience.

The fact is our ability to measure the costs and business benefits of HR processes is directly proportional to our desire to do it; it’s a mindset.

Technology acumen – understanding the power of contemporary technology so that they can lead digitization initiatives and not have them driven by IT or Procurement. HR technology is often referred to as though it is a single offering. Certain vendors want us to believe that. They also often argue that best-of-breed applications are inferior. However, contemporary HR technology offers numerous forms of power that we can deploy, including but not limited to:

  • Transaction or process management e.g., improving the efficiency and effectiveness of recruiting, payroll, on-boarding;
  • Communications e.g., video conferencing, team working, collaborating, networking, ticketing;
  • Behavior engineering or modification e.g., performance management, employee recognition, employee feedback, stress management;
  • Productivity optimization e.g., ToDo lists, project management;
  • Compliance and monitoring e.g., entry/exit security, remote-staff monitoring, and activity tracking, whistleblowing;
  • Analytics e.g., data validation, data management, data aggregation and integration, analytics, interpretations, predictions, and visualizations.

HR do not need to be experts in all of those but we do need to know enough, or to engage with those who do, to be able to make sound HR Technology decisions, many of which (especially AI applications) are progressively becoming fraught with data privacy and security issues.

Analytical acumen – understanding how to ensure the collection and availability of quality HR data (comprehensive, valid, reliable, differentiating, useful, and defensible). Many HR functions are still working with poor quality data and basic reporting tools. We need to take action to enhance data quality, and then to understand and use descriptive, analytical, interpretive, predictive, and visualization processes and tools so that we can drive strategic change.

Courage – demonstrating the courage to challenge the status quo, resist flawed requests, fight for what will work and what is right callout, and stand-up to bias. We must provide professional services not merely be subservient.

Personal effectiveness - demonstrating the ability to command airtime, influence key stakeholders, and build personal credibility.

The rapid increase in the availability of cloud-based HR technology has, in many organizations, outstripped our ability to acquire and develop those five skills.

Consequently, far too many expensive HR digitization decisions are made based largely on a combination of (a) external IT-vendor marketing and social media hype, and (b) naturally biased recommendations from well-meaning internal users, IT, and Procurement.

Organizations need to invest in suitable HR technology to position themselves to sustain their oper- ations and respond swiftly to changing needs. But, too often either (a) new process designs are driven by the technology (typically devel- oped by someone who has never worked in HR and without any behavior engineering expertise), or (b) technology is demanded to automate existing flawed processes. Ironically, a consequence is that many processes fail to capitalize on the power of technology.

Whilst COVID-19 has thrust the need for technology upon us and potentially led to budgets being made available for it, we must remember that COVID-19 has also created a desperate need for us to manage our liquid assets. We must ensure that spend on HR technology proves to be an investment and not a cost.

If Procurement asks you what you need, what will you tell them – what you need or what you want? Do you know the difference? Are you making the best use of tools you already have? How are you going to measure your return on any investment?

For your unique organization, what do you need HR technology to achieve and do for you? What are the risks (features, financial, support, we must ensure that spend on HR technology proves to be an investment and not a cost of single-source technology? What are the risks to you of integrating multiple best-of-breed solutions? Is an all-singing all-dancing ERP system right for you? Will it do precisely what you need it to do at an acceptable price?

Do you know if it will support (technically and financially) the changes that you may need in the medium and long term? Do your IT team know and understand what you need to achieve. Or, are they driven by what they know is available and widely used? Do you know what is possible? Do you know how to write an RFP that genuinely will get you the best possible solution? If not, do you have access to an independent resource to help you with that?

Yes, COVID-19  has had a major impact on HR and given us the right and the power to demand technology to support productivity and development. But, the speed with which this has happened may have clouded our thinking. There will be many vendors keen to capitalize on that confusion. For example, there is a massive increase in the availability and sales of software to monitor the behaviors of remote employees. But, would that be the best use of your funds?

Or, for example, would your funds be better spent on AI technology to help advise managers on how to enhance their interactions with individual team members, and which team members to focus on first?

Now maybe a great time to brush up on your Business Acumen, Technology Acumen, and Analytical Acumen before you use your Courage and Personal Effectiveness to drive your organization’s HR Digitization strategy.

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Topics: Strategic HR

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