HR TECHNOLOGY TO DRIVE BUSINESS RESULTS

Transcription

1 HR S STRATEGIC SHIFT: HOW TO LEVERAGE HR TECHNOLOGY TO DRIVE BUSINESS RESULTS

2 Introduction The many functions of HR have shifted and evolved over time. Today HR s sphere of influence on overall corporate performance is significantly more powerful, both administratively and strategically. The utilization of HR technology affords HR professionals the ability to shift their historic focus from administrative and data management to one of a value added strategic partner. This shift is called (by HRSoft and M. Miller) as moving from data management to information craftsmanship. By utilizing the features and functions within many of the marketplace provided HR sytems ranging from large scale, fully integrated comprehensive HR/Payroll/Benefits to best of breed solutions focusing on only a few specific HR functions such as performance management, time and attendance or recruiting, the HR function can evolve to delivering more strategic information to C-level executives (including of course the CHRO), because many of the heretofore HR administrative tasks are now in the hands of managers and employees themselves. A more effective and strategic HR function will be enabled to do more workforce planning, interact with other functional departments within the company and focus on implementing programs that will prove to add value to the organizations bottom line. HR will be empowered to use the comprehensive software applications, and its underlying data, to generate forecasts, metrics and predictive analytics that will have an enormous impact on the operations and foresight to activities that will be embraced by senior management. It will lead to powerful insights which, if presented effectively, will be valued by C-level executives and which should have a significant impact on any organizations initiatives, goals, missions and performance. This white paper discussion will review the following: How the Role of HR Is evolving How to leverage HR Technology to reduce HR s administrative burden What a strategic HR function looks like What information is wanted by C-level and other senior management Which Metrics should HR strive to provide Why Metrics are valuable for improving an organization s performance Copyright 2017 HRsoft Page 2

3 HR s Evolving Role Recognizing the Value of HR Today Within the past 5-10 years alone, HR has undergone some significant shifts. Few things illustrate the way HR has been viewed better than a comparison of two compelling articles, written 10 years apart. In 2005, Fast Company published a cover article titled Why We Hate HR. It outlined all of the ways in which HR could be improved, thereby prompting HR teams to take action and address the key components that needing fixing. Just one decade later, Harvard Business Review published an article citing all of the ways in which HR was making a strategic shift, thus providing more value than ever before. While the attitude towards HR has improved markedly, there s still a lot of pressure on HR professionals to add value by their own initiatives and to help the organization build best practices that must inherently support company goals and missions. This to be done while HR still maintains responsibility for many administrative and governmental dictated filings and practices. The chart below captures the evolution of HR s role over the last half century. HR s Evolving Role EXPERT IMPORTANCE TO THE ORG Administrator Basic Personnel Services Bureaucratic and administrative aspects of dealing with employees - PERSONNEL Enforcer Control and Compliance Aspects of dealing with unions (1930s and 1940s in U.S.) Dealing with discrimination and other US Federal Legislations - (1960s till present day) Strategic Expertise Apply behavioral science knowledge for recruiting, evaluating, compensation, Training, change management and DO workforce modeling and forecasts Take a business perspective in compensation, benefits, recruiting and staffing, succession planning Organizational effectiveness, business planning, workflow, best practices Onboarding, Engagement, Workforce Analytics / Metrics / predictive analytics Strategic Workforce / Talent Management HR TECH A very long time ago A while ago Recently last 5-10 years Copyright 2017 HRsoft Page 3

4 Evolving Challenges & Expectations In 2016, the Society for Human Resource Management polled more than 3,000 HR executives to identify their top ten challenges. Here are the results shown in order of stated priorities. Top 10 HR Challenges Through Managing talent 2. Improving leadership development 3. Managing demographics (MILLENIALS) 4. Delivering on employee ENGAGEMENT 5. Managing change and cultural transformation 6. Enhancing THE USER EXPERIENCE 7. Transforming HR into a strategic partner 8. Improving performance management/rewards 9. Managing globalization 10.Managing work/life balance Among these, were transforming HR into a strategic partner, managing globalization, managing talent, and managing demographics (in particular, Millennials). These findings align with the ways in which HR s role has evolved. Originally, HR representatives acted as administrators. They provided personnel services, including overseeing the bureaucratic handling of employee relations. By the 1930s and 40s, the role had shifted to that of an Enforcer : they were expected to maintain control and compliance, especially in terms of dealing with unions. In the 60s, they become responsible for handling discrimination and other U.S. federal guidelines arising from EEO and Affirmative Action laws. Copyright 2017 HRsoft Page 4

5 With the proliferation of effective software in support of a majority of the functional responsibilities under the overall umbrella of an HR function or department, HR s role has altered and expanded, along with the expectations of senior management. HR executives are expected to act as experts. They are responsible for onboarding, engagement monitoring, and providing forecasts to help management make decisions and implement the many programs that address the SHRM top ten issues and more. In many cases they are expected to apply behavioral science knowledge for recruiting, evaluation, compensation, training, and so forth. They must also oversee talent management and apply business perspectives to benefits, compensation, and succession staffing, and other functions. The effective use of HR technology must be oriented to add value. The value proposition must be effectively communicated, (if not sold) by HR executives. The chart below shows the relationship of how HR Technology features themselves can contribute to the value proposition. Value is Achieved with HR Technology Employee & Manager Self-Service (ESS/MSS) Forecasts & Trends via Dashboards Web-Delivered: Time Capture & Reporting Performance & Career Development Job Posting, Recruiting, Hiring & Onboarding Web-based: Work Group Collaboration Workflow and best practices Remote Location 24/7 Access via Mobile Some interaction with Social Media sites Cost Reduction Cycle Time Reduction Processing Efficiencies Improved Information Full Compliance at all levels Increased Capabilities & Functionality Enhanced Employee Engagement Data Quality Near 100% Big Picture Business Metrics Easily Available Copyright 2017 HRsoft Page 5

6 HR must seek significant strategic influence. The technology at hand will enable them to move from a tactical administratively driven function to one of Game Changing strategic involvement at the highest level of any organization. HR s Hierarchy of INFLUENCE/value GAME CHANGING STRATEGIC INFLUENCE Analytics Evaluation Engagement Getting to Policy and Planning ENTERPRISE SUPPORT IT & Telecom / Facilities & Security / Workforce Mgmt & Planning / Labor Allocation / Procurement Government Compliance: Environmental Mgmt & OSHA / Social Media Policy and Procedures TACTICAL Recruitment / Employment / Compensation / Benefits / Learning Mgmt / Performance / Workforce Development / Time & Attendance / Payroll / Regulatory Requirements If the 5 components of any organization are taken into consideration, that of People, Process, Technology, Structure and Culture as shown below in the second of the 4 dominos, and the appropriate capabilities and talent exist, and metrics for measurement are in place, an organization will be positioned for financial success by any measure. Copyright 2017 HRsoft Page 6

7 IMPACT OF BUSINESS ALIGNMENT The 5 success drivers must be aligned from top to bottom: PEOPLE, PROCESS TECHNOLOGY, STRUCTURE and CULTURE... Improved business performance and increased value... Organization capabilities that address business challenges to create Key organization success drivers to build... Aligning HR to impact... The needed transformation of service delivery: Leveraging Technology to Reduce the Administrative Burden In order to achieve the overall corporate success, HR must be perceived as the strategic partner it needs to be. This can only happen by implementing appropriate technology that, by definition, will reduce the degree of administrative service delivery and allow an increase in strategic support. Copyright 2017 HRsoft Page 7

8 Transforming HR: Classical View to Diamond view 60% 30% 10% Policy/ Planning Business Partnering Administration Outsourced activities to third party Policy/ Planning Business Partnering Admin 30% 50% Outsourced activities to employees 20% HRT SaaS HR Admin, Payroll, Benefits Admin, Recruitment ESS/MSS Workflow Best Practices Alerts In the above figure, the classical view of HR s role in service delivery is shown as the left side triangle (or pyramid). Without today s available technology, for decades, HR responsibilities have fit into this traditional pyramid shape, with administrative work taking up roughly 60% of HR s responsibilities/service delivery, with interdepartmental business partnering falling in the middle at 30% or so. At the very top and thus receiving the least amount of attention from HR, are policy and planning initiatives. Now, most organizations must seek to shift the role of the HR function into the right side shape. The goal in implementing HR technology is to achieve a diamond shape, in which the administrative activities can be significantly reduced in two major ways as a result of an effective implementation of supportive HR software and functionality features. As shown there are two major ways in which technology can reduce the administrative workload. The implementation of web delivered software applications via a Software-as-a- service approach (SaaS) will automate and instill best practice workflow for benefits administration, payroll, and recruitment and dozens of Copyright 2017 HRsoft Page 8

9 more HR areas of oversight. The always needed and important features of those delivered software applications, the employee self-service (ESS) or manager self-service (MSS) tools will allow significant workforce activities to be done by employees and managers throughout the organization, directly and without any intervention by HR staff. The combination of workflows, ESS and MSS and the ability for software to enable access to the system of record via desktop, tablet or smartphone will reduce administrative tasks as much as 40%. This will allow HR staff to focus significantly more time and effort on strategic value added initiatives including the planning for new programs and deeper analysis of the workforce skills and capabilities. HR technology provides value enriching features and they are incorporated into most of the key solution providers who offer software related to HR Management. A comprehensive HRMS with one master file will provide the features shown here and allow a single sign on to access all functional components. THE VISION AVAILABLE TODAY from any number of effective and proven HRMS VENDORS! ONE SYSTEM OF RECORD SINGLE SIGNON IMMEDIATE ACCESS BASED ON ROLES AND RULES IMMEDIATE REPORTING HISTORY VIEWED WORKFLOW EMBEDDED BEST PRACTICES ESS AND MSS INTUITIVE NAVIGATION INTERGRATED FUNCTIONALITY DASHBOARDS AND METRICS Copyright 2017 HRsoft Page 9

10 Portal Integration Most vendor offerings must be integrated within a company s existing portal as the entry point via the internet with which anyone (depending on role) will be able to interact with the System (s) of record. The figures below shows the intended vision of the outcomes and benefits to the workforce that are achievable with HR technology solutions which include ESS and MSS. THE VISION An effective EMPLOYEE SELF SERVICE STRATEGY (ESS) as well as MANAGER SELF SERVICE (MSS) results in lower costs, increased value to the business, and improved work/life balance for employees. The Portal A Personalized My WORK/LIFE Gateway An employee or enterprise portal will improve the quality of HR service delivery by providing: Single point of access intuitive user experience Consistency of information, procedures, and transactions Faster transactions via built in workflow Increased employee productivity and morale A channel to facilitate change management and culture alignment Work/Life Web Site Resulting in: Reduced costs Re-enforcing a high tech culture, appealing to new generation workers Gen X, Y and Millennial The Sticky Workplace, which retains quality people Internal / External Users Business partners Applicants Employees Managers Retirees Desktop Laptop Tablet Smartphone Social media HR ADMINISTRATION AND POLICIES Knowledge Based Systems Core HRMS Systems Web Access Technologies The Portal A Personalized My WORK/LIFE Gateway Foreign Local Payroll Systems Copyright 2017 HRsoft Page 10

11 When you opt to implement an ESS and/or MSS portal through which individuals can retrieve critical data, you can expect to experience a number of benefits across your organization. In addition to lessening administrative support, an organization can directly impact the work/life balance for individual employees. The immediate access to employee information, by the employee and his or her manager is a needed capability. A manager must readily have all pertinent data on an employee s skills, competencies, training needs, goals, specific objectives, performance, salary and any other points of data that will enable the manager to be effective. Additionally, employees expect that they will have direct access to and interact with their own data, to the point of direct queries and immediate feedback. Without such direct and easy to use tools, today s workforce who are used to smartphone apps and related behaviors, can easily opt out of an organization. They become dis-engaged and seek other employment alternatives just based on the perceived value of what they interact with on a daily basis. Copyright 2017 HRsoft Page 11

12 The More Strategic HR: A Vision In becoming a strategic partner providing value added actionable information that supports the overall organization, offering insightful support to the strategies and vision of the company, HR s role becomes more critical than ever before. Aided by technology, today s HR has a positive impact on business alignment. It can assist in getting all five of your key success drivers people, processes, technology, structure, and culture in allignment which enhances organizational capabilities and drives performance. This alignment has a domino effect as each program builds on the success of others, and the reputation of HR increasingly becomes that of a value added strategic partner. However, for all this to be effective, HR must also understand the organization in which it is a part. No longer should HR executives think only of HR initiatives. The need exists for HR executives and staff at every level to understand the mission and vision of the organization and its looming strategies and organizational direction. HR must know the industry in which they are working, be it Manufacturing, Healthcare, Finance etc. And importantly, HR must anticipate the information needs of the Executive level if not the Board of Directors. The figure below shows some of the concerns of the C-level executives as they strive to steer any organization. Their concerns are certainly not solely focused on the workforce itself, although it is an important component. Additionally, the Board and any Executive Team expect to achieve Value from the function of Human Resources or Human Capital and its senior leadership. That value is attributed to control of the factors shown here: CEO, Board & Stakeholders expect Administrative efficiencies resulting in cost reduction Leadership development Overall alignment with the organizations strategies, mission, goal and vision. High service quality to all customers (stakeholders) Responsiveness Risk Management Talent management, identification and acquisition, and a pipeline Effective leveraging of technology to all appropriate functions within the realm of HR, Payroll and Benefits VALUE CREATION! Copyright 2017 HRsoft Page 12

13 How to present value added information not Data Today, simple spreadsheets and most Ad hoc reports are too limiting to present information not data that your key stakeholders, Boards of Directors, and CEOs are looking for. As stated in Fig NN Executives and Boards would welcome information that enables actionable programs in support of a company s strategies. Only pieces of what they seek are directly related to the workforce. Key Performance Indices are an important measurement of the company, and their makeup varies from industry to industry and company to company. The more HR executives anticipate and understand what types of information is sought, the better they can build the outputs to display appropriate information. These will be in the form of various charts and trends all classified as metrics. Not all are related to the workforce. However, many do rely on some manner of workforce statistics, as direct employee staffing information is incorporated into any metrics related to the performance of HR programs. Here is a brief list of the types of information Boards, C-Level executives and Senior level Advisory Committees seek to interpret which will lead to strategic initiatives: Stakeholders & C-Level Executives want actionable information that assesses Products and cost of production Overhead Economic indicators Organizational financials Organizational structure The workforce and its utilization The marketplace Competitors Acquisitions and mergers Research and development Technology development Human resource programs and measurement Think this.. Copyright 2017 HRsoft Page 13

14 Clearly, these are just broad categories of strong interest to senior executives. Being more specific, consider the following as 3 strategic based inquiries by a Board of Directors to an Chief HR Officer (CHRO): Who are the key people in the organization, and how do we know that they re performing so well? What, specifically, are they doing that stands out? How good are they, and how are we measuring this? Compared to our competitors, are we paying them too little or too much? How do we know? Should we lose one of these key contributors, what is the succession plan? How much would it cost to reduce our headcount by 10% while also retaining our top performers? What type of impact might that reduction have on our ability to stay competitive in our industry? Earlier in this paper, we talked about how HR is evolving or moving from data management to information craftsmanship. Craftsmanship in this sense, refers to the manipulation of underlying data to craft a point of information that proves to be a prediction of a future state. That future state can typically be derived from the appropriate historical data which would then be treated to an arithmetic projection model, such as a regression analysis. For example, looking at historical rates of turnover over the past X years (calculated by termination date/reason and grouped by variables such as department and geography, leads to a specific rate. Then taking current population data and using a regression analysis calculated against the historical rate an approximation of the future headcount can be arrived at. This look into the future via a projection, can then lead to any number of initiatives that are put in place to increase or counter a predicted outcome. A Few Critical Key Performance Metrics/Indices In any organization, or any business, large or small the Owner or Board of Directors seek the answers to very broad but important questions. Here are a few: What is the overall condition of the company? of a specific Business Unit? of the Workforce (Human Capital) itself? Are we (the Company) meeting strategic needs? Are we (the Company) delivering our services in alignment with our corporate strategy and direction? Are our customers needs being met? Are we optimizing our service delivery process? Copyright 2017 HRsoft Page 14

15 The Four Perspectives An effective strategic plan or road map must consider these questions from 4 points of view. They are: From the Customer s Perspective: Executives will want to know how the company is being perceived by its customers. A few goals and measures can be used to answer this question, including customer satisfaction, sales trends, brand strength, market share, and customer loyalty. From the Growth & Learning Perspective: Executives will want to know how the organization will continue to improve and create value. Measurements such as first to market percentage, number of development activities, and percentage of ready successors may help to ascertain growth and learning status. From the Internal Business Perspective: What is the company doing well? Compiling data presented as trends related to compliance, workforce productivity, turnover rate, job fill rate, etc. will provide actionable information to justify new programs. From the Financial Perspective: The leadership team of large organizations in reality, answer to the body of shareholders and stakeholders. Financial data and trends such as Earnings per share, growth revenue, budget accuracy, and profit/employee rates will provide an important picture of the overall viability of the organization. Some of the metrics, although financial, do involve HR and Workforce underlying data. Copyright 2017 HRsoft Page 15

16 Which Metrics Should HR Measure? In the previous section, we discussed a number of metrics and the ways in which they play a role in determining how your company is being perceived from four important perspectives. As we discussed, HR alone may not be responsible for measuring every one of the discussed Key Performance Indices. Now, the following metrics can be considered to be developed and provided by the executives within the HR function working with the owners of the HR technology: HR Operations & Performance: These metrics are important for Senior HR executives, as well as directors and managers responsible for specific program deliveries and functionalities. HR Functionality Services & Programs: HR administrative specialists responsible for overseeing how specific programs are adapted and utilized by the workforce are seeking these metrics. HR Technology Service Delivery: The performance and audit of the specific HR technology, including the ongoing relationship with the providing software application vendor and the overall utilization of specific features and functions, and the performance of periodic system maintenance and upgrades is the focus of these metrics and are much sought by any organizations Manager or Director of HR Technology/systems (HRIS). The figure below lists specific metrics related to Workforce Management, also known as Human Capital Management. Each is shown with the underlying data points needed to calculate. HR Operations & Performance Metrics Human Capital Revenue Factor (HCRF) Total Revenue / Full Time Equivalent (FTE) Human Economic Value Added (HEVA) (Net Operating Margin Cost of Capital) / Full Time Equivalent (FTE) Human Capital Cost Factor (HCCF) W2 Pay + Cost of Contingent Labor + Cost of Absenteeism + Cost of Turnover Human Capital Value Added (HCVA) Operating Revenue (Operating Expenses Pay and Benefits) / FTEs Human Capital Return on Investment (HCROI) Operating Revenue (Operating Expenses Pay and Benefits) / Pay and Benefits Copyright 2017 HRsoft Page 16

17 The Logic Chain: Why HR s Metrics Are Indispensable to Better Performance In summary, the providers of HR Technology have recognized the importance of providing their customers standardized report libraries many of which include graphical depiction of trends and are considered predictive. The vendors have done the underlying arithmetic and have been able to deliver output beyond providing a simple, effective user experience within Manager Self Service (MSS) of an ad-hoc report generator. By using underlying HR Technology the function of HR can position itself as a strategic business partner within any organization, of any size and complexity. Assuming all the data is accurate, and there is a good amount of historical date sensitive data for all of the basic employee and HR lifecycle transactions, HR has to greatly benefit by implementing any number of technology solutions within the large realm of Human Resources Management. Making a strong case for the critical nature of HR Management and its needed use of technology is based on these underlying statements of premise: Metrics and analytics emerge from the data maintained by an HR data master file. HR can produce a predictive analysis for each of the KPIs that align with corporate goals, presenting them to leadership. Managers can make better decisions based on the trends and predictive analytics provided by HR. These better decisions should have a positive impact on the company s goals and strategy. Achievement of goals and strategies, and subsequent creation of more ambitious goals, adds value to the company. Value creation leads to improved efficiencies. Greater efficiencies lead to improved company performance in terms of revenues, sales, profit/loss ratios, and stock price elevation. Of course, achieving improvement is not an endpoint. Once executives begin to take for granted the power of HR technology, and HR s ability to harness or leverage that power within a reasonable cost level, the demand for more information, metrics, and workforce analytics will only increase. Thus, a productive cycle is created in which HR s new, evolved role is both as fundamental to the success of the organization but also that the function of HR is needed as a strategic business partner in all aspects of the corporation. Copyright 2017 HRsoft Page 17

18 Resources HRsoft is a cloud-based, High Impact Talent Management software company that specializes in improving employee engagement and retention for mid-large sized employers. Our High Impact Talent Management System includes modules for compensation management, applicant tracking, management software, total rewards, stay interviews, and content management. Phone: info@hrsoft.com Web: About the Contributor Marc S. Miller President & Founder, Marc S. Miller Associates MARC S. MILLER : is a nationally respected thought leader, consultant, speaker and author on HR Technology. He has over 35 years experience with all aspects of technology solutions for Human Resources. His consulting firm, together with his industry visibility, has made Marc S. Miller one of the HR Technology industry s most recognized voices. Marc has been a featured speaker and presenter at numerous HR and HCM technology meetings both industry focused and at many HRMS providers User Conferences. His blogs and webinars are always well viewed and attended. His recently published book, HeroicHR, now in its Second Edition, is in high demand. Copyright 2017 HRsoft Page 18