HR Tech: The great disconnector
With a week to go before the upcoming master class, we explore the relevance of HR tech in a changing world of work
Technology can empower businesses with improvements in productivity, faster development and production cycles, superior decision making by employees, and enhanced customer service. But deriving benefits from incorporating new technology is not always a smooth process, particularly within the HR profession, which is still largely characterised as a profession of bureaucrats and administrators, awash with office politics and legacy systems.
Integrating technology with HR has allowed companies to better manage change. HR tech has revolutionised the way companies communicate with their employees and the manner in which they get the best out of what should be their best resource – their people. For many companies, leveraging technology for HR means digitizing the mundane HR activities and automating the back office and transactional activities related to recruitment, performance management, career planning, and succession planning, training and knowledge management.
Barclays Africa Group Head of Organisational Effectiveness Sthembiso Phakathi says that, through technology and rationalisation of processes, companies can achieve a lot to improve what he calls 'the people experience'. He believes that people should be going to their HR departments for assistance with mundane things like adding beneficiaries to their pension schemes or changing their banking details. If a person wants to change their gender, for example, they should be able to do so at will.
"You can imagine that HR is going to be needed less in the future, especially when it comes to executing administrative processes. The size and the capabilities of HR divisions will, therefore, have to change. It will need more people who are agile and can think strategically to tell their companies how to innovate around people processes, as opposed to people who can transact and do administration processing,” says Sthembiso.
Making the right technology call
No successful medium or large business can be run today without computers and the software that makes them useful. Technology also represents one of the single largest capital and operating line item for business expenditures, outside of labour and manufacturing equipment.
Most large technology decisions are inherently risky and a poor decision can take years, costing the company dearly in lost efficiency before the technology is upgraded or replaced. Meanwhile, many technology investments simply do not deliver the anticipated returns in terms of improving business performance
“Look there's some really good technology implementation happening out there. However, part of my more recent experience has been that, unless a company jumped on the HR tech revolution in the late 90's into the 2000's, it will still be playing catch up. Many of the companies that jumped on that bandwagon back then are so much more mature now, having already implemented the latest developments and making the necessary adjustments to find technology solutions that work best for them that they are finding it so much easier to manage people. Many companies simply haven't even started that journey,” says Khosi Matshitse, Group Executive Human Capital at the AECI Group.
For most companies, the workforce is the single largest annual investment, accounting for more than 30% of revenue. So regularly reviewing people data, like hidden labour costs and turnover trends, can bring to light issues that have held back the business, or opportunities where your people could work more effectively. Yet, according to PwC’s recent Global HR Technology Survey, too few companies have a people analytics function in place bringing these insights to leadership.
“HR analytics is the priority that’s most often named when we asked about improved HR technology support, planned implementations, or upgrades. Of twenty-one categories, nearly 44% of endorsements were for improved technology support for HR analytics, followed by performance management (41%), recruiting (41%), and core HR capabilities (37%),” reads the report, whose results came from a survey of 10 029 members of the general population based in China, Germany, India, the UK and the US.
“Yet technology deployments that are not tightly linked to a workforce analytics strategy can lead to conflicting priorities that do not support the strategic direction of the enterprise. We found that only 14% of respondents were “very satisfied” with their current HR analytics technology. And of the companies that have implemented HR analytics modules, 50% report low adoption rates of analytical programs.”
The future is in the cloud
According to the report, 47% of working adults market themselves by their own personal brands and sell their skills to those who need them, and do not have the traditional approach to work. Therefore, HR executives are already in a world where business unit leaders know where top employees come from and how to find more. They forecast future labour costs by a quarter. And they predict which people will leave or stay. The Human Resources Officer is the business partner that enables it all.
Central to the report is that the cloud platform, above all, provides the best vehicle for organisations to quickly consume and keep up with this pace of innovation. This is because migrating to the cloud provides the spark needed to break old ways of working and adopt new ones. For, even if companies can’t predict the exact nature of what work will look like in the future, they can predict that the HR innovations required to get to the future state will rely heavily on technology.
“Whether you’re increasing workforce efficiency with mobile technology, increasing collaboration with social networks, predicting business needs with analytics or artificial intelligence, or driving down costs and increasing quality with robotic process automation, the cloud is the first best step to enable it all.” - PwC’s Global HR Technology Survey 2017
The report found that organizations of all sizes continue to migrate their HR processes to the cloud at a record pace. It states that, two years ago, 68% of organizations had at least one HR process in the cloud. In 2017, that number has climbed to 73%. As a further barometer, nearly 40% have their core applications in the cloud. For those that still use on-premise applications (hosted within the organization’s four walls) for core HR, nearly one-third are actively planning their migration to the cloud over the next 12–18 months.
Technology decisions will outlive the tenure of the management team making those decisions. While the current fast pace of technological change means that corporate technology decisions are frequent and far-reaching, the consequences of the decisions, both good and bad, will stay with the firm for a long time.