Why Most Companies Are Helpless Victims of HR Technology

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Digital HR is all the buzz. Investments in HR tech are surging and more and more companies are buying apps to save time and improve their employees’ lives. However, does the technology deliver on its lofty promises? I propose that the only way we can get real value from digital tech is through a well-thought-out digital HR strategy. Unfortunately, this is something that most HR departments lack.

A few months ago I was interviewed for a preliminary study into digital HR. The interviewer asked “do you know any companies that have a clearly defined digital HR strategy?” I actually knew one. The interviewer reacted with surprise and told me that out of the 12 experts she had interviewed I was the first who had said “yes.”

I think this characterizes the state of digital HR. There’s a lot of talk about new applications that make HR faster, better and more data-driven. However, the bigger picture is missing. This leads to a number of problems.

A Proliferation of Applications

An example I’ve come across was a large multinational financial institution that used 70 different HR apps. Most of these apps were purchased to enable self-service HR. This included onboarding assistance, holiday planning, sick leave, pick-and-choose employee benefits and many, many more. The problem that this company was running into was confusion among employees. The HR help desk was clogged with people who were asking where they could plan their holidays, request sick leave or find the onboarding assistant — the exact same functionalities that HR wanted to automate using self-service apps in the first place!

We’re Missing the Real Benefits That Make Digital HR Exciting

In an ideal world we capture data about all relevant points of the employee journey — on when people join and on their behavior, evaluations, promotions and exit talks. Connecting these dots through smart apps brings a tremendous value. Previously I’ve argued that HR should properly map the employee journey to identify key touch points and capture data there. If there’s no bigger picture then the synergy that digital HR could bring in terms of HR analytics gets lost.

We Will Miss Our Goal

The company with 70 HR apps failed to achieve what it set out to do. It made it harder for employees to manage their own stuff, not easier. This process of digitalization will only go faster. Kate Graham listed in a recent post the five truths about digital HR. These truths focused on both the speed of innovation and its impact. If you think things are going fast now, wait until we’re five years down the line.

In order to cope with this rapidly changing world and to really grasp the benefits of digital HR, we need to do three things.

Understand that HR is the buyer but not the user

Oftentimes the decision to buy these apps is HR’s responsibility. It is the buyer. However, the app’s users are the employees working throughout the company. Too often apps are implemented without checking how users normally behave, how users will benefit, how they will react to the app and how they will interact with it. This leads to (tragi)comical situations where service employees are forced to use energy-draining work apps that require carrying battery boosters to keep doing their work — all because the pen-and-paper approach was too old-fashioned according to HR. Another example is that of the telecom worker who now has an app that needs him to be connected to the internet — even though he works in a remote area with limited or no coverage.

Create a Digital Innovation Culture

The previous point falls in line with an innovation culture that’s customer-centric. Trying, erring, trying again and succeeding is very much part of any lean digitalization process. This shouldn’t only pertain to HR. HR should work with IT to see how they can optimize the employee experience in regard to digital services. An integration between two apps or a workflow automation could cost hundreds of thousands of dollars when bought externally. However, the Salesforce Employee Success Strategy team explained in a recent presentation that when they faced these expenses, they opted for a simpler solution that was developed internally for a few thousand dollars.

Maximize Returns on Software

Specifically for HR, I would propose the term “return on software.” Ultimately software should serve the business — just like HR should. The use of HR software should lead to business outcomes, either by directly creating market share or generating more revenue, or indirectly through process optimization within HR or through achieving key HR outcomes. The only way to properly test this is through people analytics. By measuring how software and people interventions contribute to achieving KPIs, HR can optimize its effectiveness. Research shows that this is exactly the context in which analytics is most successful: when technology, people practices and analytics practices are aligned.

HR may purchase the software, but when someone else in the organization is using it, HR shouldn’t listen to the vendors too much. It should talk to the users and help them do their work better.

The future of work is here — but now it’s time to integrate it into our HR strategy.

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