I’ve worked on successful HR transformation projects for over 10 years. Implementations that have positively changed outcomes for employees and employers.
Our evidence shows that firms that continue to invest in their HR processes will see the effects of their investment multiply and maximise the return on HR systems investment.
Despite the positive outcomes, why are so many HR decision-makers reluctant to invest in HR transformation?
This is a question I regularly ask myself and my industry colleagues.
One recently suggested in a blog that reluctance to invest in digital HR is down to fear of change. Fear because they see it as more work – which it can be until new efficiencies bed in or fear they’ll lose control over their roles.
Either way, with business growth and efficiencies high on most CEOs’ agendas, doing nothing to improve workforce management and engagement has the potential to carry greater consequences than any fear might induce.
Never have firms been more dependent on fostering loyalty or so invested in building a culture around employee wellbeing. The success of these lies in a data-rich engagement mechanism in the form of a modern HR experience.
“The business case for HR transformation is no longer focused purely on cost and performance efficiencies. Employees want more than just a paycheck. They want fulfilling careers and to work for companies that help support their wellbeing inside and outside of work.”
Businesses success is in the data-driven decision-making
Data-driven decision-making is the only way an organisation can be competitive in the digital world. Facts, metrics and insights from integrated data sources ensure strategic business decisions align with workforce and business goals.
Standardised processes, HR system agility and personalisation are key to initial user adoption and ongoing usage. Not everyone is at a desk. Not everyone is a technical expert. Very few are tolerant of tech that takes time or creates issues.
For new HR systems to be utilised - and so create the data required by the C-suite, they’ve got to be easy to access and navigate for all employees.
Research tells us that a good employee experience increases usage, but also attracts and helps retain talent. The same research tells us that poor IT functionality is a huge stressor and productivity killer for employees.
HR tech innovation is about to accelerate
While HRIS vendors are working on their innovations, developments from our HR Innovation Hubs will lead to a number of game-changing advancements for standard and bespoke HR and payroll platforms.
Development areas include evolutions in bots, AI and data analytics, plus scenario techniques and the use of unstructured data modelling to better define skills gaps. This can also be used to highlight employee strengths and skills for better utilisation in the business and personal career development. Investing in people is key to retaining talent.
Why innovate in HR?
HR innovations for innovation’s sake serve no purpose. The pre-requisite for any HR investment is to improve outcomes. The ultimate business goal in the digital economy is a frictionless enterprise.
Smart insights are what the boardroom is looking for from all functional leads. This expectation is putting great pressure on HR leaders.
The only way clean data can be created, analysed and translated into business instructions is to build a dynamic HR ecosystem. This acts as a central hub for all people-related activities, amassing data from which most C-suite questions can be answered.
Without this real-time data engine, it’s hard and time-consuming to find accurate answers or make credible predictions. This limits HR’s opportunities to move from a function to a business resource.
No comprehensive HR transformation project is easy
At its most simple, a successful HR transformation is one that reverse engineers the limitations a business has in its existing people management processes.
While documenting best practices and capabilities of commercial HRIS platforms and applications. It’s only by fully understanding the unique challenges, limitations and opportunities a firm is faced with can an HR transformation project ever achieve its full potential.
An outside-in view is always advised. When embroiled in day-to-day processes, it’s very easy to overlook what, to an expert eye, is a rudimentary issue or missed opportunity.
5 causes why HR transformations fail
The university WHU Koblenz investigated the interdependency of technology and (HR) productivity. Its findings could be summarised quite simply:
“Without productivity and technology, businesses will fail. But just with technology, they will not succeed either.”
So, it is more about what we do with technology than the technology itself. Hardly rocket science you might say. Perhaps not, but for an IT transformation to deliver optimum results, it requires ‘rocket scientists’ to fine tune the vehicle — in this case the HRIS platform — into an agile (HR) ecosystem.
It requires the realisation of multiple levers to design, deliver, measure, innovate and maintain the core technology. This approach is the only way to really ensure the HR ecosystem continues to deliver against changing objectives and goals of the business and its stakeholders.
According to McKinsey, 70% of IT transformation projects fail. Not exclusively HR projects, but the principles for failure are the same. The research I was involved in with the university, and subsequent studies and analysis we’ve done at Alight, point to these common causes:
- HR transformation is considered a one-off investment
- C-suite is not fully invested in the sustained evolution of the HR function
- Adequate skills or time resources not available in-house to drive the project to achieve its greatest potential
- Personal value of the HR transformation and the advantages it brings individuals are not well communicated
- Change management processes including communication and learning resources are lacking
Behind every successful business is an engaged workforce
Underpinning every great growth business is a happy and engaged workforce. People are motivated by pay, recognition and reward. Innovations have and continue to increase options to employees in a personalised and more equitable way.
It’s increasingly likely as the cost-of-living bites that employers offering such options as earned wage access, flexible shifts and digital GP services for all, will secure essential workers and, with this, the greatest opportunities for growth.
Employee experience and data-driven insights are just some of the reasons why it’s time HR innovations should be put into real-world practice.