WSR January 2016 by IHRIM Publication

January 2016

The Official Journal of the International Association for Human Resource Information Management

IHRIM.ORG

The Business of Human Resources:

How HR and HR technology have evolved in the past 20 yearsâ&#x20AC;Śand where they go from here!

See the Annual Buyerâ&#x20AC;&#x2122;s Guide on Page 24

Contents

Volume 7, Number 1 • January 2016

features Annual Buyers Guide

Page 24

columns From the Editors

David Gabriel, Lead Editor Bruno Querenet, Contributing Editor Scott Bolman, Contributing Editor

Executive Interview

Amplify, Don’t Assess Performance! An interview with Deidre Paknad, Workboard

The Technology Haves and Have-Nots

By Karen Beaman, Teilasa Global

The HR Leadership Imperative – Survive or Die! 32 By Ed Colby, InnovationOne.US

Understanding the New HR Services Operating Models

People, Process, and Technology

Why are the HR technology alternatives so confusing?

By Freddye Silverman, Silver Bullet Solutions

By Ian Ruddle, Lake Bend Partners Inc. Even in today’s market, it is estimated that over 45 percent of the firms undertaking a HRIS/HR services replacement or upgrade gain board approval for their initiative with the starting details from a Value Case rather than a formal ROI.

The Rise of the Purpose-Oriented Workforce

Trending Now: #HRTransformation

By Denise LaForte, Mercer

The Strategic Advantage of HCM Technology

HRIS: Where does it belong?

Fostering an Analytic Culture from the Top

Can HR Evolve to Become the #1 Business Impact Function?

By Jacqueline Kuhn, HRchitect

Making Health Benefits Smarter

By Aaron Hurst, Imperative

The future HR leaders are tech savvy, specialized, business-minded, and disruptive. And if the current trends are any indication, HR must continue to innovate to meet the disruptions that are sure to come in the future!

By Susanne Cronister, Collaborative Solutions If your organization is considering a transition, it’s critical to do it correctly. Make sure that the organization is ready for the change and that proper change management processes are leveraged.

By Johnathan Hodge, Jiff

By Jeff Mills, Tableau

The Back Story

Accountability in the Business of HR: “Just What if…” By Dr. Katherine Jones, Mercer

By Dr John Sullivan, San Francisco State University If HR expects to have a high business impact, it must learn to live with the fact that they won’t ever have total control in many areas that they share with managers.

Human Resources and the Emerging Employee-Consumer

By Thomas O. Davenport and John M. Bremen, Willis Towers Watson Only by constantly re-evaluating and possibly reconfiguring reward offerings can an organization expect to preserve and improve its competitive position. A HR department that sees itself as the organization’s internal marketing function must take the lead in advocating, defining, and executing those changes.

The Future of Recruiting: The Art of Matchmaking in a World of Applicant Tracking Systems By Hila Halutzy, RedMatch Choosing the right applicant tracking system enables future recruiters to intertwine cutting edge technology with relational sensitivity, flexibility, attention to detail, and expertise.

Workforce Solutions Review (ISSN 2154-6975) is published bi-monthly for the International Association for Human Resource Information Management by Futura Publishing LLC, 20505 Live Oak St., Leander, TX 78641-9273. Subscription rates can be found at www.ihrimpublications.com. Please send address corrections to Workforce Solutions Review at the address above. www.ihrim.org • Workforce Solutions Review • January 2016

Volume 7, Number 1 • January 2016

Workforce Solutions Review is a publication of the International Association for Human Resource Information Management, whose mission is to be the leading professional association for knowledge, education and solutions supporting human capital management. Opinions expressed herein are not necessarily those of the editors, the IHRIM board of directors or the membership.

ERIK BERGGREN, VP, Customer Results & Global Research, Success Factors, San Mateo, CA USA eberggren@successfactors.com

BRIAN RETZLAFF, Head of IT for HR, Legal & Communications, ING US Insurance Americas, Atlanta, GA USA brian.retzlaff@us.ing.com

JOSH BERSIN, Principal and Founder, Bersin by Deloitte, Oakland, CA USA jbersin@bersin.com

LISA ROWAN, Program Director, HR, Learning & Talent Strategies, IDC, Framingham, MA USA lrowan@idc.com

NAOMI LEE BLOOM, Managing Partner, Bloom & Wallace, Fort Myers, FL USA naomibloom@mindspring.com

EDITORIAL COMMITTEE

YVETTE CAMERON, Research Director, HCM Technologies, Gartner, Littleton, CO Yvette.Cameron@garter.com

Managing Editor SCOTT BOLMAN, Director, Advisory Services, KPMG, Chicago, IL USA sbolman@kpmg.com.

Co-Managing Editor SHAWN FITZGERALD, Managing Director, Total Rewards and HR Technology, Blue Cross Blue Shield Association, Chicago, IL, USA shawn.fitzgerald@bcbsa.com

Associate Editors Roy Altman, HRIS Manager - HR Analytics & Application Architecture at Memorial Sloan-Kettering Cancer Center, New York, NY roy@peopleserv.com Julie Egbert, SPHR, HRIP, Executive HR Director, SQLC Dallas/Ft. Worth, TX USA Julesegg53@aol.com DAVID GABRIEL, Ed.D., Global Reach Leadership, Berkleley, CA davidcgabriel@gmail.com ROBERT C. GREENE, Channels Account Executive and Sales Training Manager, Ascentis, San Mateo, CA USA rcgreene@mindspring.com JEFF HIGGINS, CEO, Human Capital Management Institute, Marina Del Rey, CA USA jeff.higgins@hcminst.com ERIC LESSER, Research Director, IBM Institute for Business Value, Boston, MA USA elesser@us.ibm.com MICHAEL H. MARTIN, Partner, Aon Hewitt Consulting, Organization & HR Effectiveness, New York, NY michael.martin.6@aonhewitt.com BRUNO QUERENET, HR Technology Executive, High-Tech and Medical Industries, Sunnyvale, CA USA bruno.querenet@gmail.com MICHAEL RUDNICK, Vice President, Principal Consultant, Logical Design Solutions, New York, NY USA michael.rudnick@gmail.com

LEW CONNER, Executive Director, Higher Education User Group, Gilbert, AZ USA lconner@heug.org ELENA M. ORDÓÑEZ DEL CAMPO, Senior VP Globalization Services, SAP AG, Frankfurt, Germany elena.ordonez@sap.com LARRY DUNIVAN, SVP Products and Technology, Ceridian larry.dunivan@ceridian.com GARY DURBIN, Chief Technology Officer, SynchSource, Oakland, CA USA hacker@synchsource.com Dr. CHARLES H. FAY, Professor, School of Management & Labor Relations, Rutgers University, Highland Park, NJ USA cfay@smlr.rutgers.edu

Dr. DANIEL SULLIVAN, Professor of International Business, University of Delaware, Newark, Delaware USA sullivad@lerner.udel.edu MARK SMITH, CEO, Chief Research Officer, and Founder of Ventana Research, San Ramon, CA USA mark.smith@ventanaresearch.com DAVE ULRICH, Professor, University of Michigan, Ann Arbor, MI USA dou@umich.edu DR. MARY YOUNG, Principal Researcher, Human Capital, The Conference Board, New York, NY USA mary.young@conference-board.org

IHRIM BOARD OF DIRECTORS Officers Chair JAMES PETTIT, HRIP, HRIS Manager, Project Byrd – Kimberly-Clark Corporation

DR. URSULA CHRISTINA FELLBERG, Owner & Managing Director, UCF-StrategieBeraterin, Munich, Germany ucfell@mac.com

Vice Chair DAVE BINDA, HRIP, CHRP, CCP, President, HR Results, Ltd.

ALSEN HSEIN, President,Take5 People Limited, Shanghai, PRC Alsen@take5people.com

Chief Financial Officer GARY MORLOCK, HRIP, Senior TRM Project Manager, Qualcomm Inc.

CARL C. HOFFMANN, Director, Human Capital Management & Performance LLC, Chapel Hill, NC USA cc_hoffmann@yahoo.com

Secretary JOYCE BROWN, HRIP, Brinks Inc.

JIM HOLINCHECK, Vice President, Services Strategy & Marketing, Workday, Inc. james.holincheck@workday.com

Past Chair KEVIN CARLSON, Ph.D., Pamplin College of Business, Virginia Tech

CATHERINE ANN HONEY, VP, Customer Services, Radius Worldwide catherine.honey@comcast.net

Directors

DR. KATHERINE JONES, HCM Research, Bersin by Deloitte, San Mateo, CA USA kathjones@deloitte.com SYNCO JONKEREN, VP, HCM Applications Product Development & Management, EMEA, The Netherlands synco.jonkeren@oracle.com MICHAEL J. KAVANAGH, Professor Emeritus of Management, State University of Albany (SUNY), Albany, NY USA mickey.kavanagh@gmail.com

MIKE HARMER, Intermountain Healthcare JAMES LEHMAN, Results Driven Consulting, LLC KEVIN MURPHY, HRIP, Murphy Management Consultants STUART RUDNER, Rudner MacDonald LLP

IHRIM Executive Director TODD S. MANN

BOB KAUNERT, Principal, Towers Watson, Philadelphia, PA USA robert.kaunert@towerswatson.com

PUBLISHING INFORMATION

BILL KUTIK, Technology Columnist, Human Resource Executive, Westport, CT USA bkutik@earthlink.net

TOM FAULKNER, Publisher, Futura Publishing LLC, Austin, TX USA, tomf@futurapublishing.com

EDITORIAL ADVISORY BOARD

DAVID LUDLOW, Global VP, HCM Solutions, SAP, Palo Alto, CA David.ludlow@sap.com

PATTY HUBER, Advertising Manager, Austin, TX USA phuber2@austin.rr.com

CECILE ALPER-LEROUX, VP Product Strategy and Development, Ultimate Software, Weston, FL cecile_leroux@ultimatesoftware.com

RHONDA P. MARCUCCI, CPA, Consultant for GruppoMarcucci, Chicago, IL USA rhonda@gruppomarcucci-usa.com

MARK BENNETT, Oracle Corp., Redwood Shores, CA USA mark.bennett@oracle.com

LEXY MARTIN, Independent Consultant/Researcher, Meadow Vista, CA Lexy.martin1@gmail.com

FREDDYE SILVERMAN, CEO, Silver Bullet Solutions, Baltimore, MD USA, freddye.silverman@mysilverbulletsolutions.com

January 2016 • Workforce Solutions Review • www.ihrim.org

David Gabriel, Lead Editor David Gabriel co-founded Global Reach Leadership LLC – a consulting firm specializing in organizational assessment, coaching, leadership development and talent management. He has worked with clients in the technology, health care, pharmaceutical, government, education and nonprofit sectors. He previously served as senior director of Organization Effectiveness and Talent Management at McKesson. He received his doctorate in Organization & Leadership from the University of San Francisco. He can be reached at david@globalreachleadership.com. Bruno Querenet, Contributing Editor Bruno Querenet is a principal consultant, providing services to help HR organizations improve their efficiency and effectiveness through the adoption of relevant processes and systems. Previously, he was the head of HR Systems and Operations for several companies in the medical and high tech sectors. He can be reached at Bruno.Querenet@gmail.com. Scott Bolman, Contributing Editor Scott Bolman is director, Advisory Services at KPMG. He has been helping Human Resources (HR) organizations become more efficient and effective for over 20 years with various organizations including Towers Watson and Mercer. He can be reached at sbolman@kpmg.com.

from the editors With this issue, we bid farewell to Karen Beaman, Ed Colby and Freddye Silverman, and thank them for their many years of dedication to Workforce Solutions Review. Each of them shares reflections on changes in the “Business of HR”— how HR and HR technology have evolved during their tenures as editors at WSR. In his article, Ian Ruddle, Managing Director of Lake Bend Partners Inc, drives us through the redefinition of the HR business and operating models to derive an HRIS technical architecture, which can support the deployment of new technologies such as cloud systems, mobile access, information security or 24/7 availability. Denise LaForte of Mercer points out that HR transformation could include changes in “HR organization structures, HR operating models and cost structures, HR processes, HR technologies and/or HR governance models.” Today HR is transforming because business as we know it is transforming. “Gone are the HR generalists who knew a little bit about everything, but didn’t specialize in anything.” Thomas O. Davenport and John M. Bremen of Willis Towers Watson, write that only by constantly re-evaluating and possibly reconfiguring reward offerings can an organization expect to preserve and improve its competitive position. A human resource department that sees itself as the organization’s internal marketing function must take the lead in advocating, defining, and executing those changes. In this issue, you will be challenged to re-envision HR as more than just an overhead function. According to Dr. John Sullivan, to become the #1 business impact function, HR still has a long way to go. Some HR leaders work directly with senior leadership to provide guidance on business strategy, talent and change management, leadership development and culture transformation, but many do not. As companies struggle to transform HR, Susanne Cronister of Collaborative Solutions shares her journey and experiences, and then examines the implications of aligning the HRIS department to HR or IT. Functions like Recruiting are undergoing massive change and Hila Halutzy from RedMatch tells us that by combining the best that technology has to offer with the interpersonal skills recruiters are known for, recruiters will continue to thrive in the big data world. Equally challenging to HR is the ongoing change in health care. Johnathon Hodge predicts that as the digital health revolution takes hold, there will be hundreds of options available to employers to improve employee health — from apps and wearables, to telemedicine and digital health coaches. Jacqueline Kuhn from HRchitect writes that the business of HR entails understanding and automating HCM processes while enabling managers and employees easy access to people, financial and operational data. New technologies are creating competitive advantage like never before. Jeff Mills describes how innovative tools like Tableau are accelerating business performance and empowering data analysis across the enterprise. Dr. Katherine Jones argues that the time has come to stop spending millions of hours tracking completion of performance reviews and ratings that fail to improve employee performance. She and other contributors in this issue make the case for greater business accountability. Aaron Hurst of Imperative reminds us of the importance of Purpose-Orientation at work. We have an obligation not only to be business focused, but also to forge meaning and build connections between co-workers and community. We hope this issue on “The Business of HR” encourages you to elevate your own practice—and the profession of HR. Please share your success stories with us and we wish you a healthy, happy, and productive New Year!

www.ihrim.org • Workforce Solutions Review • January 2016

feature Understanding the New HR Services Operating Models Why are the HR technology alternatives so confusing? By Ian Ruddle, Lake Bend Partners Inc.

How did we get here?

To keep the respect of the business community, the HR function must demonstrate that it is strategic in thought, knowledgeable in business understanding and nimble in support structure. It must demonstrate sensitivity to local cultures while striving to provide the most effective level of service – just as for any business function. That’s all very well, but how do we provide HR with an operating model and technology platform that’s flexible enough to meet those specific strategic, financial and operating criteria? Since the 1990’s we’ve been “sold outsourcing of both HR services and IT operations or partial outsourcing of some HR services, told to move HRIT under Finance IT, and even “move that d**n HR Operations into the Finance organization” (by a very frustrated CEO, after a spectacular $15 million project failure). And now we have to deal with the cloud. How does this all fit together? In answer to this question we need to set some ground rules. We need to develop an HR Business Model and HR Services/Operating model to help drive toward alternative technology configurations. Virtual Virtual HR HR Service Service Delivery Delivery Model Model

Internal Resources-

ERP

ASPs

Understand your HR Business Model

Developing and maintaining a vision for the company is one of the primary functions of the corporate human resource team, but fewer than five percent of companies have a published vision for their human resource group. The HR business strategy needs to be carefully developed against the overall business goals and carefully positioned to take advantage of changing economic conditions. For example the strategy should show the HR business service aligned with the company goals, e.g., if the company is expanding or contracting, the HR strategy will articulate acquisition/recruiting plans or outplacement plans. All too often, missing this critical step, global HR professionals find their existing people, processes, and technology cannot meet the increased demand for workforce management, operational effectiveness, or business performance criteria measurement. HR is responsible for providing effective and efficient people-based programs, processes, and technology to the organization. The most effective HR organization would exhibit the following “modus operandi:” •

Key business leaders and employees share accountability for HR transformation – strategic HR does not exist in a functional silo isolated from the rest of the organization.

•

HR measurably tracks the organization’s progress. The organization’s people-based programs, processes, and technology are strategically integrated to maximize business results.

•

The HR administrative and compliance requirements are conducted at minimal cost: HR designs and delivers programs to minimize cost and maximize potential value. Administration and compliance generally require the most effort for the least value; business service centers provide the most effective customer service support.

•

Strategic outsourcing of non-core tasks

O/S Resourcing

Performance

Workforce Workforce Planning Planning

Knowledge Knowledge Management Management

Recruitment Recruitment And And Selection Selection

Organizational Organizational Development Development

Workforce Workforce Deployment Deployment

Performance Performance Management Management

Succession Succession Planning Planning

Rewards Rewards and and Recognition Recognition

Service Efficiency Compliance

O/S Administration

Employee Employee Information Information

Benefits Benefits Administration Administration

Employee Employee Relations Relations

Payroll Payroll Administration Administration

O/S

Figure 1. Shows the Virtual HR Business Model with additional tags showing where strategic outsourcing has played a role for some global organizations.

January 2016 • Workforce Solutions Review • www.ihrim.org

will reduce administration complexity and (sometimes) save costs. Several administrative functions of HR are regular candidates for outsourcing to either reduce costs, and/or to perform tasks where internal skills do not exist. This model can be used to achieve several objectives: • Facilitate HR service strategy sessions; • Determine service priorities to business alignment; • Determine non-strategic services for consideration of outsourcing; and, • Facilitate organizational structure development around service linkages. So what about strategic HR outsourcing? Once the model shown in Figure 1 has been used to analyze and determine the priority functions, the discussion extends into the criticality of the function to the core business, and the risks associated with having a professional third party undertake the administration of the function. It should be noted that the ultimate management and accountability of the function cannot be outsourced – this must remain within the organization – a fact that many organizations forget. One important point – strategic outsourcing should not be confused with total outsourcing – there is always a place for carefully segmenting out a business function that does not make economic sense to manage inside the organization. There are some minor components of workforce planning and deployment that can be outsourced – but they typically are handled inhouse. In addition, the customer services organization and IT infrastructure are also popular candidates for consideration of outsourcing. By general consensus, payroll processing and tax table management, contingent workforce management, expatriate payroll management, benefits management, and employee relations are all typical candidates for selective outsourcing. For many companies, the process of candidate selection and applicant tracking can

One of the key strategies employed in a virtual global HR organization is the appropriate use of the concept of a shared services model. The concept builds on the following assumptions: • •

•

The value of the human resource organization is to help attract and retain talent not administer it. The primary function of the HR generalist is to be a consultant to their line business partner. There is a need for experts in human resource policy and procedures, but not in every position. The business of HR administration is similar to a customer service business. The majority of questions from employees are fairly rote and may be handled by trained administrative staff or Webbased information systems. The technology support investment should be appropriate for an integrated, global system.

Global organizations will consider several regional shared service centers to accommodate language and time zone differences; the typical locations would be the U.S. (for Americas – North and South), Brussels or London (for Europe), and Singapore (ASPAC). Over the past decade the role of services included in the HR portfolio has expanded to include such items as expense reimbursement, payroll administration, sales compensation administration, expatriate administration, and attendance tracking. To effectively analyze these new, and the traditional functions, a generic model of the major service groupings is needed. For a number of years the Ulrich model showing three areas of ownership within HR has been the defining model upon which most companies base their HR services strategies.

 Primary contact with Business Professionals  Primary contact with Business Professionals  Managed programs with in business units  Managed programs with in business units  Accountable for resource management within business units  Accountable for resource management within business units

Centers of Excellence

 Strategic use of outsourcing by business functions  Strategic use of outsourcing by business functions  Requires vendor/contract management  Requires vendor/contract management

also be handled by a third party.

Developing your HR Services/ Operating Model

Managing the HR function is turning out to be more complicated today than it had been predicted. As one of my past clients put it “Despite the promises, for some reason the advance in technology has not removed the need for human interference from most areas of HR.”

Outsourcing

HR Business Partners

 Primary Contact within Corporate Leadership  Primary Contact within Corporate Leadership  Develop Strategy and Programs  Develop Strategy and Programs  Accountable for overall performance of  Accountable for overall performance of resource management resource management

HR Information Systems

HR Service Center

 Primary contact with employees  Managed administration services  Accountable for information service for employees  Provide support for enabling technology

Figure 2. Shows a modified HR Services/Operating Model with the addition of a strategic outsourcing option. www.ihrim.org • Workforce Solutions Review • January 2016

The typical HR Services model incorporates the three primary service areas with a fourth grouping, if outsourcing is implemented with HRIS system supporting all service areas: • Centers of Excellence: By organizing around a defined set of delivery platforms, relative to areas of deep expertise, the COEs are in a position to provide more focused HR expertise to strategic business partners and the organization as a whole: generally part of the strategic HR organization. •

Business Partners: By organizing around a defined set of delivery platforms, strategic business partners are in a position to provide more strategic HR expertise within the context of the specific line of business’ needs working in partnership with the line management. These are the traditional HR generalists now acting more in a consulting capacity.

•

HR Shared Service Center: It must satisfactorily respond to employee inquiries and process HR transactions in order to significantly reduce strategic business partner and COE involvement in administratively-based employee inquiries (e.g., benefits, payroll, and data maintenance) These are a combination of the HR administrators, payroll/time administrators, and customer service/ help-desk operators blended into one organizational hierarchy.

•

HR Information System: The HRIS system encompasses the HR database of record, (the single source of data), the transaction applications using and updating the data, and the various technologies facilitating access, e.g., Web, IVR, workstation.

Figure 3. HRIS Technology Architecture Model.

January 2016 • Workforce Solutions Review • www.ihrim.org

•

Outsourcing: The strategic outsourcing of non-core competency functions and/or those that are more efficiently delivered by the third party allows the HR function to improve HR service delivery, while reallocating resources to more value-added activities. Maybe one, or more likely, a combination of several organizations.

Many corporate human resource service organizational structures are still based on the decentralized administration model of the 1980s. Fewer than 15 percent of corporations have invested in the recommended shared services model with the re-engineered HR organization emphasizing a “customer service” approach – currently recognized as the best practice Human Resource organization model.

Developing the Technical Architecture Model

Changing or upgrading the enterprise technology platform, such as an HRIS system, often requires a major effort, sometimes involving a multi-million dollar investment – in software, in hardware, and in project resources to deliver the solution. Building a business case for this investment is a challenge. The presence of a value case to support a major business or technology transformation is critical in gaining approval for the investment. Measuring or justifying the value of the HR organization, its people, and its support technology has traditionally been a difficult exercise for a number of reasons. Any service-related business has few value measurements, except for customer satisfaction and price acceptance. Using these attributes to define the “right level” of HR service is a new concept, and is still in the process of being generally accepted in the marketplace. In order to understand the technical architecture model that might best support the predetermined business and operating models, we need to discuss the merits of the various possibilities. Over the last 25 years, the HRIS market has seen a shift from on-site monolithic central systems based on mainframe technology, through total outsourcing either national or offshore, to distributed applications including point solutions with the option of using a combination of on-site and cloud-based systems. With the advent of increased transactional link security and redundant systems processing, the decision to outsource or go cloud-based is less about the technology and more about

the desire, or lack thereof, to run or manage the technology platform internally with company employees. The technology skills required are becoming scarcer, thus impacting availability to hire at reasonable cost and ability to retain. So what do you really need to be covered by the Technology Architecture model? Figure 3 shows a schematic of the primary technology applications and connectivity typically seen within an HRIS system. Comprehensive HR database with full redundancy and 24/7 availability: Yes, the days are gone when the HR database could be scheduled to run on the back-up Finance server, subject to availability! With the global reach of most companies, the HR core system is likely to be required 24/7 and with full operating redundancy. Based on data security policies and operating service levels, the HR database could be kept on-site or operate remotely on a vendor cloud or outsourced vendors system, which includes data warehouse, reporting database (high activity reports), and knowledge database with analytics overlay. HR Core Applications in support of the Services Operating Model: This covers information content, self-service apps, workflow, and personalization. It generally follows the location decision of the HR database, although some cloud vendors offer combined local/cloud architecture. Assuming the data security policies don’t dictate otherwise, the reason why many companies chose to outsource their HR system or pass it to a cloud-based vendor is that they don’t want to invest in the infrastructure themselves – that’s people, as well as hardware/software. Selected point solutions fleshing out missing functionality in the HR Core System: Are point solutions still necessary? Absolutely, no current vendor pretends to handle all functionality; typical point solutions encompass contingent workforce management, applicant tracking, recruitment, compensation process (year-end), performance management, and training management. It is essential that the database of record remains with the HRIS system not the point solutions, As long as there is integrity with the data communication between the two systems, both cloud-based and on-site systems can be co-mingled. Web Based/ Mobile access for all users with full security: This includes browsers, kiosks (becoming rarer), IM, email, and other self-service technology. The security aspects of the Web, once challenged successfully by the IT organizations, have now been accepted as effective for access to HR data (as for other sensitive

company data). It is now common to find mobile applications accessing and updating employee and pay data. Call Center technology with IVR: This includes case management, call tracking, automatic call direction, and business transactions. It’s a known fact that more than 85 percent of calls to an HR customer service center are related to payroll and benefits questions – and are easy to “look up.” These can all be transferred to a Tier 0 Web-based application or a call tree structure with IVR. Remaining enquiries may require human interaction. Depending on the subject matter and the service level required, they may be handled internally or outsourced.

Some Closing Thoughts

Even in today’s market, it is estimated that over 45 percent of the firms undertaking a HRIS/ HR services replacement or upgrade gain board approval for their initiative with the starting details from a Value Case rather than a formal ROI. It’s extremely difficult to cost-justify such an initiative from direct savings unless the HR organization model is rationalized at the same time – thus generating savings in salaries from downsized staffing. To ensure success of such an initiative, it is ideal that the funding, motivation, and management are all under one roof. This rarely occurs. So it is imperative that a rigorous project management protocol is adopted with a correspondingly comprehensive change management plan. Every CHRO I have met laughs at that statement until they get burned for the first time. Under certain circumstances, the use of an outsourced technology solution, whether cloudbased or remotely-based, may provide immediate cost savings. However, the usual reason for consideration is the perceived increase in operational quality and/or reliability over the existing internal operations technology and staffing. Cloud-based vendors have substantially improved their products over the past two years in both the basic operations functions (and redundancy), as well as the integration capabilities with legacy on-site systems, such as benefits management or payroll management. A final word of warning – if you end up in a conversation with the CEO who throws his/her hands up into the air and says “It’s all broken. Let’s outsource (or cloud) it and let someone else fix it.” Be aware, that approach may cost you more in the long run. Transitional outsourcing can be a huge financial risk, if you let someone else try to fix your issues. As one past client said, “We need to fix our own problems first, then decide who’s best to run it.”

About the Author Ian Ruddle is managing director of Lake Bend Partners Inc. He is a seasoned management consultant with more than 20 years in consulting, most recently with Deloitte Consulting LLP where he held practice leadership positions in the Human Capital and Technology Consulting groups. In his prior corporate career of 25 years, he held executive positions with American Express and Citibank in the technology management field. He can be reached at iruddle@gmail.com.

www.ihrim.org • Workforce Solutions Review • January 2016

feature Trending Now: #HRTransformation By Denise LaForte, Mercer

Human Resources leaders are constantly remarking that HR transformation (HRT) is hot right now. I’ve been doing HRT consulting for decades so, for me, it’s always been hot. In fact, organizations have been transforming their HR function in one way or another for nearly 20 years and there continues to be tremendous focus on it today. When we talk about HRT, we’re talking about rethinking an organization’s HR function to better support the business. This could include changes in HR organization structures, HR operating models and cost structures, HR processes, HR technologies, and/or HR governance models. Today, HR is transforming because business, as we know it, is transforming. Fortune suggests that we might be in a new industrial revolution and sponsored a forum in December 2015 with CEOs to focus on the challenge of “Winning in the Disruptive Century.” Executives are worried about getting “Uber-ized” or they’re experiencing “Uber Syndrome” – where the fear of a business disruption from an unlikely competitor is keeping worried CEOs up late at night. Nobody wants to be blindsided by the next app or Silicon Valley startup in the way that Uber upended the taxi and transportation industry, seemingly overnight.1 So what are these disruptive trends and how is HR changing as a result?

Globalization Most large corporations are now global in scale and reach. Despite this prevalence, many organizations struggle with how to manage HR on a global scale and support business needs across a multitude of diverse geographies. Companies are spending time rethinking their HR organizational structure and how to service the business both globally and locally. The key to succeeding globally is to define which plans and programs are global, and which ones are local. There also needs to be a clearly outlined governance model in place that maintains the business rules and ensures that rogue HR programs (which tend to drive up cost and

January 2016 • Workforce Solutions Review • www.ihrim.org

complexity) are not built locally. At the same time, if a company’s desire is to move from a national focus to a multinational focus, HR needs to provide tools and systems to facilitate global reporting, collaboration, and mobility. Human Resources also needs to develop their own competencies through global deployment of resources and building a global mindset in the company.

The Cloud One way that HR departments are managing their global workforce is leveraging new cloudbased technologies. According to Steve Seykora, Global Workday Practice leader at Mercer, “Cloud-based technology has allowed HR departments to automate almost all HR processes from core transactions, applicant tracking, benefits administration, payroll, time and attendance, to training and performance evaluations. It has allowed HR teams to turn their attention to more advanced processes, including HR planning and forecasting, strategic alignment of HR activities, and enhanced decision-making.” What does this mean for the HR department? Human Resources no longer needs to be involved in basic HR work like personal data changes, department transfers, and processing salary increases. Employers and managers get a consumer-grade experience with direct access to workforce data, content and transactions. In addition, since cloud-based systems are configurable (rather than customized like premise-based ERP systems), there is less need for IT to be involved in managing the HRMS, providing HR with more autonomy. Cloud-based systems also provide for frequent upgrades on a set schedule so that all customers are on the same – and latest – version. This new way of working with technology eliminates the lengthy process to upgrade a traditional ERP and frees up HR to focus on other more value-added activities.

Big Data Like the cloud, big data is another disruptive enabler. When we talk about big data in a HR context, we are referring to workforce data and

we’re moving from looking at data to predicting potential outcomes. Ten years ago, companies were implementing a global HRMS so that HR could finally run reports on head count and turnover. This basic technology was a huge improvement over the old paper systems but HR was still looking in the rear view mirror for information. Today, HR is analyzing big data to predict workforce productivity. For example, big data can help HR anticipate what kinds of HR programs motivate employees. Is it pay? Benefits? Time off? Big data is also being used for workforce planning to help companies determine how many people they have, how many they will need, and where the gaps are. It can answer business-related questions like whether a training program increases retention or whether other HR programs should be cut or expanded. Big data is having an impact on the HR function itself as well, by requiring new skillsets for HR professionals within newly emerging functional areas. We’re seeing people with organizational strategy experience moving into new HR centers of expertise (COEs) with names like workforce engineering or workforce planning. We’re also seeing these new COEs partnering closely with Inclusion and Diversity (I&D) teams in order to measure progress towards I&D goals, also a heightened focus for HR.

Mobile and Social Social media has become a crucial tool for HR in terms of attracting and hiring the next generation of talent. For example, at the HR Tech conference in Las Vegas in September 2015, UPS delivered a compelling presentation. The company needs to hire thousands of seasonal workers over the holidays and is leveraging their 72,000 Facebook followers, 32,000 Twitter followers, and 322,000 LinkedIn followers to fill these positions. The typical recruit for this seasonal work is a high school or college student. UPS offers employees a lucrative education benefit towards college in addition to their regular pay. They could advertise this benefit to students on Facebook, but found that a better way to attract these hires was by getting this opportunity in front of their parents, who were more likely to be on Facebook than the kids (and more likely to be nagging their kids about holiday employment). UPS built a Facebook page to attract parents who want their kids to get a part-time job and tuition reimbursement benefits for college. The parents can go to that page and easily text their child a link to the UPS recruitment site. It was an innovative way

to use the parents of potential employees to help this company recruit, integrating social media and mobile technology. These opportunities to use social media to drive recruiting are possible when HR is tech savvy enough to leverage the power of these applications. The high-performing talent acquisition teams of today are blurring the lines between corporate recruiting and mobile and social media.

Innovation

For companies to innovate, employees need to be constantly rethinking the way work is completed. Beyond the capability for the HR function itself, employees, and managers need to look for ways to change their approaches to work through technology, social media, and the Internet. Human Resources has a role in promoting this culture of innovation and providing the tools and technology to drive it. We’ve seen some of our HR clients taking the lead on innovation. For example, a CHRO in the HR department of a large health care system designed a people-focused program to drive innovation in the hospital. Her team created a set of tools and processes available to doctors, nurses and staff, including the environmental services team, i.e., cleaning staff. If anyone had a good idea for how to execute a process more effectively or efficiently, they could leverage the tool kit provided to employees, get their idea on the generation list, have it considered to be piloted, and eventually implemented broadly. We’re not used to seeing this kind of innovation being driven by HR, but it’s yet another way that HR can support business disruption.

Mergers, Acquisitions, Divestitures In 2015, more than $900 billion of merger deals were announced in the U.S., the most in the first half of any year since 1998, according to data from Thomson Reuters. These mega-deals are driving the need for a new, nimble HR function to support all of that deal activity. Human Resources needs to be flexible and scalable more than ever before in order to provide the right support in today’s dynamic business environment. We’re seeing leading HR departments in big pharmaceutical and major technology firms, e.g., building standing HR merger and acquisition (M&A) capability. These units are ready to deploy due diligence “swat” teams who can analyze total rewards programs and talent capabilities of target companies. They also can conduct finanwww.ihrim.org • Workforce Solutions Review • January 2016

Endnotes hicago Tribune, November 9, C 2015. 2 Fortune 500 companies from Mercer’s Executive and Broadbased Employee Retirement Tool (EBeRT). 1

cial analysis on the potential for cost reduction through merger synergy savings. For HR, this means building teams that are very similar to consultants, ready with M&A tool kits, to go on-site and execute quickly and efficiently. These projects also require new skills from HR in strategic staffing, project management and data analytics.

Financial Wellness Historically, HR owned the retirement life cycle for employees. Companies provided traditional defined benefit (DB) pension plans and the Benefits team managed the annual pension valuation, ERISA compliance, pension estimates, and About the Author retirement counseling. Today, less than Denise 25 percent of U.S. Fortune 500 companies LaForte is the have a DB plan.2 North America As a result, the role of the Benefits team is Practice shifting from pension design and adminisleader for HR tration to promoting financial wellness for Transformaemployees. Human Resources has recogtion at Mercer, nized that employees who don’t have these a global human capital consulting traditional DB pension plans still need to firm. She works with global HR retire at some point, and need to make sure leaders to align HR strategy, they have their financial house in order. A organization, technology and multitude of vendors have emerged that processes to business strategy in can assist employees with asset growth, liorder to ensure that HR is doing ability reduction, insurance protection, and the right things with the right income and expense management. Human people at the right cost. She can Resources’ role today is assessing and manbe reached at aging these vendors and helping employees Denise.Laforte@mercer.com. to ensure their own financial wellness.

Health Care Exchanges The health care system in the U.S. is undergoing massive transformation and the private exchanges – the marketplaces for selling health plans – are having an impact on employers. Gone are the days of worksheets and booklets delivered during open enrollment season. Private

January 2016 • Workforce Solutions Review • www.ihrim.org

exchanges allow individuals to shop for and purchase health insurance online. The exchanges handle health plan enrollment and relay information to the chosen health insurance carrier, again providing employees with the consumer-grade online experience they expect from their company. The impact of a private exchange on HR is that, once again, a significant amount of work that was once managed by a Benefits team has shifted to a vendor. The exchange typically takes on much of health and welfare benefits plan design, carrier selection and negotiation, annual benefits enrollment, benefits communications, benefits administration technology and customer service. The shifting of this work can lead to a reduction in the size of HR staff or the ability to redeploy these resources to other value-added activities, such as physical wellness. It also requires new skills in vendor management and technology selection and integration.

What does all this disruption in the HR function mean for HR professionals? These days, someone pursuing a career in HR is much more technology, data, and business savvy than they would have been 10 or 15 years ago. In the past, HR may have cobbled together solutions with reams of paper and clunky reports. But today, HR is driving vendor management and selecting world-class cloud technologies. The HRT team is more important than ever and the HRT leader is a critical player on the HR leadership team. Gone are the HR generalists who knew a little bit about everything but didn’t specialize in anything. The future HR leaders are tech savvy, specialized, business-minded and disruptive. And, if the current trends are any indication, HR must continue to innovate to meet the disruptions that are sure to come in the future!

feature HRIS: Where does it belong? By Suzanne Cronister, Collaborative Solutions

The Human Resource Information Systems (HRIS) department has always been a unique blend of HR functional expertise and technology. It’s not quite HR, and not quite IT. So where should the HRIS department be aligned within the organization? I’ve been an HRIS professional for more years than I care to admit, and the majority of the companies I had the privilege of working for had the HRIS department within HR. However, three companies that I worked for either transitioned the HRIS department from HR to IT while I was an employee there, or had already made the change prior to my employment with them. In this article, I share my journey and experiences and then examine the implications of aligning the HRIS department to HR or IT.

My Journey The first organization that I worked for, which made the transition originally, had the HRIS function aligned under the VP of Compensation and Benefits. After a leadership change, I started reporting directly to the chief HR officer (CHRO). It wasn’t until I was part of a planning session that I realized how that particular HR leadership team viewed the HRIS function. The HR leaders at that time consisted of a VP responsible for the Human Resources Business Partners’ group (Talent Acquisition, Employee Relations, Generalist Services, etc.), a VP of Learning & Development, a director of Compensation & Benefits, and a director responsible for shared services and payroll. During that planning session the CHRO wrote the strategic goals for HR that primarily focused on the goals of the HR business partners, learning and development, and compensation and benefits at the top of the board. Then, a line was drawn. Under the line were the “non-strategic” areas of HR: Payroll, Shared Services and HRIS. At that moment, the light bulb went on for me. It was obvious my leadership didn’t see HRIS as a strategic function. Shortly after that, a new CHRO joined the company. He wanted all technology-related functions in IT – and my career in IT was born. Human Resources became my customer. Many, including my new IT colleagues, said that I went to “The Dark Side.” During the transition, one of the first things we did was create a responsible, accountable, consulted,

informed (RACI) matrix to clearly identify the ownership of tasks across the two groups. Information Technology was accountable for project delivery, application development, break/fixes, enhancements, as well as budget ownership for HR technology projects and operations. Human Resources retained the subject matter expertise for the centers of excellence (Employee Relations, Compensation, Benefits, Payroll, Talent Acquisition, Talent Management, and Learning and Development). While it was a little rocky in the beginning it was a great step in my career path, as well as for others. Human Resources continued to define the “what?” and IT determined the “how?” While I was there, I was an active team member defining the software development life cycle (SDLC) methodology for the company. If I had been in HR instead of IT, I wouldn’t have had that opportunity. When defining the methodology, we ensured that it would be flexible enough to be applied to packaged solutions, as well as custom development and would be relevant for HRIS. I was able to leverage that methodology for a PeopleSoft upgrade. It was one of the first large projects to leverage the new artifacts and framework. We were able to deliver what was viewed as a very successful program with valuable feedback and lessons learned (what worked well and what needed to be improved for future projects). Overall, it was a great partnership and collaboration between HR and IT. At that company, we were running PeopleSoft for HCM, Payroll, Recruiting, and Benefits. We had our own PeopleSoft developers and managed our own projects. The management of the projects, as well as the management of the developers was a natural alignment to IT. The tasks that remained in HR were more aligned to configuration and testing. Overall, it was a great partnership that functioned well and accomplished a lot of great work. I then joined another company that had already made the shift from HR to IT for the team who supported the HR systems. This team included subject matter experts and systems analysts. The team maintained a great relationship with HR. I was brought onboard at the same time as other IT leadership. Together, we rolled out additional changes to roles and responsibilities, as well as added project management within the group. The group partnered closely with the PeopleSoft and Java developers that www.ihrim.org • Workforce Solutions Review • January 2016

built and provided technical support of the HR applications. Again, the organization was operating in a way that HR was still defining the “what?” and IT was determining the “how?” Since that time, I’ve worked at another organization where the HRIS transition from HR to IT felt more like a really bad divorce! I joined the organization close to two years post-transition and it was still very rocky. The partnership between HR and IT was strained and HRIS no longer had a direct line of sight into the goals and work HR was doing. The HRIS team didn’t feel connected to HR’s strategic goals, nor did they feel they were understood by their new home (IT) or their old home (HR).They were lost. Why can the transition work for some organizations and not for others? The major difference between those three organizations is that the last one had very few true technology roles. The PeopleSoft development was outsourced, external data centers were used versus hosting the servers in house. It wasn’t the best alignment.

Implications and Considerations What are the considerations when making the decision of changing the alignment of HRIS to HR or IT? I don’t believe there’s one perfect model that works for all organizations. There are many considerations when determining the best alignment for the HRIS department. I’ve outlined some of them below: 1. Who “owns” the budget for HR Systems? Ideally, HR will have a healthy budget for technology projects and operations. It’s not easy for HR to compete with revenuegenerating departments during the budget cycle. When putting business cases together, it’s rare to have a positive “hard-dollar” net present value (NPV) for any HR project. It’s also hard for Human Resources’ technology projects to be a priority over Finance technology projects. Is the budget centralized? Is it in IT? Is it in HR? Is the cost distributed? If the budget is in IT, then it is best to have the HRIS project delivery function aligned to IT. Human Resources will need proper representation at the table with determining project budgets. If it’s distributed or if HR owns the centralized budget, it most likely makes more sense for HRIS project delivery to be in HR. 2. Where is the strategy being defined? Is HR a visionary force when it comes to HR technologies, or do they rely heavily on IT leadership to provide that direction? In my experience, if HR is focused on HR programs without the consideration of the technologies and IT provides that vision, then HRIS project delivery is better aligned to IT. When looking at technologies as a whole, it’s important to have a consistent user experience

January 2016 • Workforce Solutions Review • www.ihrim.org

across the various systems. That is easier to accomplish under one leader versus several. 3. Is your portfolio mostly Software-as-aService (SaaS) versus on-premise solutions? In today’s HRIS landscape, more and more of the systems are SaaS. Do you need a large team to provide technical services such as development, database administration, server support, etc.? Do the HRIS professionals perform their own configuration? Software-as-a-Service models are easily supported in HR and don’t need many IT resources; for this reason, it makes more sense to have HRIS aligned in HR. 4. What is the Project Management office’s (PMO) involvement? Does your company have a PMO? Are they involved in HRIS projects? What is the reputation of the PMO (do they add great value or is the department viewed as adding unnecessary red tape and, possibly, the “kiss of death” to projects)? When the PMO is a valuable partner delivering great value to technology projects, and HRIS is continually investing in technologies with multiple projects, then it’s important to have a strong relationship between the PMO and HRIS. If the PMO is in IT and the PMO is a high-performing function then HR Systems’ project, resources will be better aligned to IT. 5. Is the focus on maintaining operations versus new projects? Is HRIS primarily keeping the lights on, or is it consistently investing and delivering new projects? How innovative is the company? Does HR value the functionality available in state-of-theart HR systems? Is the organization adaptable to the latest and greatest in technology advancements? Employee self-service and manager self-service have been around for years for most organizations. Some organizations haven’t implemented these for multiple reasons including cost and anticipated poor adoption. Some organizations always want to be early adopters in technologies and will roll out the most current technologies, and their employees and managers embrace it. These are two extremes, but it will definitely set the tone and strategic vision of the HRIS department. This consideration is closely linked to number 2. If IT is providing more of the vision for the organization as a whole, then HRIS should be aligned to IT. If that’s not the case or the organization is keeping the lights on, then HRIS can be effectively aligned to HR. 6. What are the leadership views of HRIS? Does leadership value the technology? Is it viewed as a strategic tool or an

administrative necessity (above the line or below the line)? Does HRIS have a seat at the table when defining strategic goals? Do they have representation on key projects? It’s important to involve HRIS members on strategic HR projects. If leaders properly see the strategic value of the HR systems and the strategic goals are set by Human Resources’ leadership then HRIS will be better aligned in HR. 7. Does compliance and legal expertise reside in HR? Human Resource Information Systems is configured and used to ensure compliance with benefits regulations, labor laws (federal and local laws), payroll regulations, etc. This requires a great deal of experience and expertise. While IT can appreciate the need and requirements for compliance, they’re not the subject matter experts (SMEs) and don’t always fully comprehend the complexities and intricacies involved when setting up the HR systems. Human Resource Information Systems needs strong alignment with the SMEs to ensure the systems are meeting legal requirements. 8. Who owns the vendor relationship and vendor management? This might align with the budget owner. If you have an enterprise resource management (ERP) system that is used for more than HR, the relationship is likely owned by IT or the Procurement department. It’s important to leverage expertise of Procurement and IT leadership to get the initial best deal possible, and there’s certainly an economic consideration when a vendor is used for multiple functions. This is an ongoing consideration as maintenance or ongoing subscription fees are a significant expense to an organization. 9. Is IT or HR closer to the end user? Who is the biggest advocate for the end users? Human Resources Information Systems have multiple customers: the HR centers of excellence, Employee Relations, Compensation, Benefits, Payroll, Talent Acquisition, Talent Management, Learning & Development, shared-service center, workforce administration, workforce management, etc. Managers also use HR systems for multiple functions: performance, recruiting, compensation planning, employment transactions, reporting and analytics, etc. Employees are able to update personal information, enroll in benefits, set performance goals, prepare performance selfassessments, participate in training activities, etc. Since there are multiple users of the systems, who provides greater insight into their experiences? It seems logical that HR has more at stake in how the system is used.

Given the many considerations for alignment, what is essential for successful ongoing operations? The definition of roles and responsibilities is absolutely critical. It ensures that nothing is slipping through the cracks and there is no duplication of efforts. A responsible, accountable, consulted, informed (RACI) check is very helpful to outline who is the one performing the work and who has overall accountability. This is especially important in large organizations with multiple resources supporting the HRIS function that are spread across IT and HR. I believe the traditional HRIS function is best aligned in HR and organizations should keep the more technical functions in IT. The HRIS department should perform configuration, requirements analysis, end-user support, as well as reporting and analytics. Information Technology should be responsible for database administration, network and server support, desktop support, application development, security and Sarbanes–Oxley Act (SOX) controls. That said, Project Management and Quality Assurance (QA) are functions that are a little more flexible and can align to either HR or IT. Project Management should follow the framework set by the PMO (assuming that the framework properly supports HRIS technology projects). If HRIS doesn’t have its own project management resources within the department, ideally one will be assigned from the PMO. Some organizations have their own quality assurance teams within IT. About the Author They provide necessary checks and balances After growing up in to ensure that deliverables meet the requireKansas and getting her degree in Mathments. By nature, this group is an objective ematics and Comthird party. The resource performing this puter Science at function shouldn’t be the one responsible Benedictine College, for the component (from a development or Atchison, KS, Susanne Cronister moved a configuration perspective). Quality Assurto the “Chicagoland” area, making it ance teams work with the PMO to define her home. She has spent more than 20 proper standards and tests that need to be years in the field of HR technologies, working on the consulting side as well performed for systems implementations. As as the corporate functions of Fortune long as any conflict of interest is removed 500 and other top organizations. She is and the testers are familiar with the funccurrently helping organizations with tionality, then the resources can be aligned their human capital management to HR or IT. (HCM) software implementations as If your organization is considering a portfolio director at Collaborative Solutransition, it’s critical to do it correctly. tions, and can be reached at scronister@collaborativesolutions.com. Make sure that the organization is ready for the change and that proper change management processes are leveraged. When the transition is handled correctly, the change can be very positive and sets the organization up for success. If it isn’t done correctly, it will be difficult and nearly impossible to undo the damage. Many things suffer as a result, including employee engagement, relationships between HR and IT, collaboration, etc. If it all seems too complicated, you can always outsource the whole function – but that’s a whole article in itself! www.ihrim.org • Workforce Solutions Review • January 2016

feature Can HR Evolve to Become the #1 Business Impact Function? By Dr John Sullivan, San Francisco State University

Executive Summary This “think piece” is designed to challenge the widely held notion that HR should continue to be viewed as an overhead function. The article argues that HR should follow the approach used by other overhead functions like supply chain that have proven to executives that they can directly impact revenue and profit. HR can adopt a “high business impact strategy” that focuses on having a direct effect on strategic business goals like innovation, revenue, and profit. Part I of the article will highlight, with examples, 10 key elements to be included in a strategic plan that will enable HR’s shift to this high business impact model. Part II, to be published in the next issue, will focus on an additional 10 key elements. The goal is to get you to “re-think HR,” because for decades HR leaders have been quite comfortable being considered as an overhead or administrative function. As support functions, HR, accounting and security all have one thing in common, they cost a great deal of money to operate, but they do not even attempt to contribute directly to reaching strategic corporate goals and profits. But what if an overhead function could evolve and act differently so that it actually did make a major contribution towards strategic business goals like revenue and profit? If you think back a decade or more, that transition has already occurred in what we now call supply chain. By adding a business results-oriented focus, as well as some technology and metrics, the separate functions of warehousing, purchasing and logistics transformed into what clearly became a profit center for firms like Walmart, Amazon and Dell. Few business people would doubt that without an effective supply chain, these firms not only would not be profitable— they probably couldn’t even remain competitive in business. And it’s important to note that supply chain has had this high business impact, even though the percentage of all corporate expenditures spent on supply chain at top firms averages a mere 4%. So when executives learn that the area that HR manages—employees and tempo-

January 2016 • Workforce Solutions Review • www.ihrim.org

rary/project labor—is often the highest single corporate variable cost item (as much as 60%), they immediately realize that if HR adopted supply chain’s business impact approach, it would have a huge business impact. I call this new approach a “high business impact HR strategy.” With an effective strategic business impact plan, HR could actually become the function with the highest impact on corporate goals, revenue and profit. In fact, Jack Welch, the “Manager of the Century” has already noted that…

“If the Human Resources department is functioning correctly and used in the correct manner, it’s the most important department in the entire company.”1

The Business Impact of Talent in Some Industries is Already Recognized as #1. In addition to the HR functions that operate as Jack Welsh says they should, the talent management functions in professional sports also serve as a great example by illustrating the direct impact that managing talent can have on meeting business goals and profit. In professional sports like baseball, football, basketball and soccer, it is obvious to everyone that “acquiring and managing talent” is the single most dominant factor in winning and producing bottom-line results. Take major league baseball as an example: Baseball executives long ago adopted a “Moneyball”-type approach to talent, where they use what are now known as sabermetrics to quantify, predict and guide every aspect of baseball talent management. In baseball, everyone knows that it’s the players and the managers and how you acquire, develop, and manage them that drive wins and championships. It’s also true in the entertainment industry and especially in movies that the quality and the draw of that talent to your movie is the major factor that causes success. But in sharp contrast in the corporate world, HR’s leaders almost without exception have accepted the

role as an overhead function with little measurable impact on the business. And despite the fact that many CEOs use some version of the phrase, “our employees are our most important asset,” there is little evidence that “the common version” of HR actually produces any measurable business impact. Instead, corporate executives routinely cut the HR budget. Or in the worst case scenario, HR functions that have not proven that doing them well has a significant impact on the business are simply outsourced.

The Many Benefits of Shifting to a High Business Impact Strategy Before adopting this high business impact strategy, executives and HR leaders need to recognize its many benefits, as well as its potential problems. The positive results to the organization could include improved business results, building a competitive advantage in the talent area, and a significant increase in workforce productivity, innovation, speed, adaptability, and learning ability (concepts I will cover in Part II of this article). Benefits that would accrue to HR itself would include stronger executive respect, significantly more resources, more effective HR programs, having managers actually listen to what HR says and increased opportunities for HR professionals to transfer into jobs in strategic business units throughout the business side of the enterprise.

Key Elements in HR Becoming the #1 Business Impact Function Unfortunately, having an overhead mentality has become a self-fulfilling prophecy for HR. As a result, many HR departments have actually become nothing more than cost centers—unable to demonstrate any measurable impact on corporate productivity or profitability. If you are an HR leader and you want to make the transition to a high business impact function you can’t simply rely on trial and error and expect to get there anytime soon. The model for the future of HR presented here is based on critical success factors my research has found in strategic business units and other functions like supply chain, finance, and marketing. For those wanting to begin this transformation, following are the first 10 key elements to be considered: 1. Focus on the strategic goals that executives care about – CEO’s and senior executives are laser-focused on producing strategic results. This group of senior executives focuses their interest and energy on the short list of metrics for which their board of directors holds them accountable.

As a result, if HR leaders want to begin the transformation into a strategic impact function, the first step is to identify exactly what their senior executives are measured and rewarded on. It’s a major mistake for HR to speculate about these goals (many get it wrong), so work with the executive team to identify what is often called “strategic business goals.” They are always found in the corporate strategic plan, but they are also likely to be reflected in the bonus formulas of senior executives. Common strategic goals include increasing revenue, profit, the stock price, market share, innovation and improving customer service, and speeding up product development. If you’re thinking that it’s outrageous for HR to directly impact a strategic goal like revenue, you would be wrong. For example, let’s start in sales because they directly generate most corporate revenue. If you developed a data-driven effective hiring program for salespeople that resulted in each new hire selling 10% more, you could clearly demonstrate in large corporations a measurable business impact on sales revenue that would exceed millions of dollars. HR can also show its impact on customer service through its retention efforts if it uses data to show that longer-tenured service reps have customers with a 15% higher satisfaction rating. 2. Convert HR results into dollars – At a large national discount retail chain, traditional HR reported a metric revealing that 20% of their retail store managers quit last year. But if that metric were converted to “the language of business” (i.e. dollars of revenue) it would draw more attention. If you dollarize the metric, you could instead report that “whenever a store manager left, the resulting store sales for the next year at that store were $1 million lower. With 22 manager vacancies, the real positional cost of turnover was $22 million. With this kind of dollar conversion, most executives would instantly demand an improvement in retention. Learning to convert HR results into revenue impacts requires HR to work closely with its biggest critic, the CFO. This partnership ensures that the processes used to calculate the dollarize metrics which reveal business impacts are credible and defensible. Every important HR result including recruiting, retention, development, onboarding, and performance management must learn to convert every important output or result into “dolwww.ihrim.org • Workforce Solutions Review • January 2016

lars of business impact.” Here’s one more example: The average employee at Apple produces $2.4 million in revenue each year. If you could show the training offered to an Apple employee improved their performance by just 10%, multiplying that number by Average revenue per employee would generate added value of $240,000 for each employee completing training. 3. Build a compelling business case – Once you understand how to convert HR results into dollars, you must put together a compelling business case in order to get the required support and funding for your new strategy. Once again, partner with the CFO—the resident expert on what gets approved for more funding. Once you learn the key funding criteria, you can begin putting together the business case. It should include the quantified benefits, the potential problems, the potential resistance and how to overcome it, the questions you’re likely to get, the program’s ROI, and the likelihood of success. You must pre-test your business case with cynical executives until you get it perfect. 4. Contribute to building a performance culture – The most effective strategic approach for getting everyone in the organization focused on performance is to build a “performance culture.” A performance culture is where every manager, employee and management process is laser focused on directly improving employee and organizational performance. Everyone should be involved in building that culture, but HR has a major role in creating and managing it. That means ensuring that every individual HR program includes a component that improves measures and rewards improved performance. HR must also minimize or eliminate anything that recognizes or rewards a factor other than performance, including seniority, effort,

An Example of How HR Can Increase Revenue Executives at a Midwest bank realized they were losing significant revenue every day loan officer positions went vacant. The bank depended on the position to make and close revenue-generating loans. In order to reduce the number of days loan officer positions were vacant, they called on recruiting to apply speed hiring techniques on these positions. By accelerating the requisition process—placing the best recruiters on these positions and identifying and eliminating “deadtime” throughout the hiring process— recruiting cut the number of vacancy days nearly in half. At $5,000 per eliminated vacancy day, over dozens of requisitions, recruiting increased the bank’s revenue by millions. Everyone from the CFO down agreed that HR had substantially increased revenue.

January 2016 • Workforce Solutions Review • www.ihrim.org

engagement, loyalty, and fully guaranteed pay. High-impact parts of a performance culture that HR should focus on include: hiring/retaining top performers and innovators, measuring and quantifying performance in every job, ensuring that a significant portion of everyone’s pay is based on performance, fixing bad managers, and rapidly fixing or removing below average performing employees. 5. Shift focus from “HR problems” to “Business Problems” – Refocus from “tactical HR problems” (i.e. recruiting, retention etc.). In order to have strategic impact, HR must learn to instead shift focus towards impacting “business problems” like increasing revenue and improving customer service. Changing HR’s mindset is critical because executives don’t think in terms of HR, accounting, or finance problems. Instead, they see everything in the context of their list of strategic business problems. Rather than trying to convince executives that “recruiting is a problem,” instead show that a reduction in sales (the business problem) is caused by weak performing new hires and that changing the training or compensation will not improve their performance. 6. Enable data-based decision-making – Every other business function outside of HR long ago adopted a model where every important decision is made based on metrics, data, and facts. If you maintain HR’s reputation for making decisions based on emotions, intuition and past practice, you simply will not be respected by the leaders of other data-driven business functions. Shifting to a data-based model will also mean that hiring, retention, and promotion decisions will be faster and more accurate. Because managers are accustomed to making decisions using data, even your controversial recommendations will be easier to justify. In a fast-moving world, current practices quickly become obsolete. So using data to continually evaluate the way you do things is critical. HR can be more effective by dropping ineffective programs faster and by shifting talent resources to areas where they have measurably higher impact. Data-based HR decisions can produce up to 25% larger business impacts than the current “I think” model.

7. Become forward-looking and predictive – Literally 100% of HR metrics are historical and backward looking. However, strategic business leaders are forward-looking. As a result, real value can be added by becoming forward-looking in HR using predictive analytics that forecast, drive action, and allow for workforce planning. These forward-looking metrics will also allow HR to alert managers so that they have sufficient time to act on upcoming talent problems and opportunities. Predictive analytics might include forecasting who is about to quit, who will become overdue for training, and forecasting developing barriers to productivity and innovation. 8. Prioritize business units, jobs, employees and HR programs – HR can no longer assume that everything is of equal importance; that mentality reduces HR’s overall impact. Start by identifying the different strategic business units/functions that executives have already determined to be a high priority based on their profit margins or rapid growth, then focus your attention disproportionately on them. Next, prioritize your HR programs so that you focus on the ones with the highest business impacts. (Research has shown that the top two highest impact talent actions for increasing revenue and profit are recruiting and retention.) Positions must also be prioritized; it’s simply a fact that a quarterback in a football organization has a much higher impact on winning than the water boy. Using that same mindset, HR must prioritize jobs, managers and employees, so that the most HR budget and the highest quality HR resources are focused on these high-priority areas. For example, it’s important for HR leaders to realize that even though employee retention is important everywhere, retention efforts should be focused primarily on potential “regrettable losses”—those most likely to leave and who are the most difficult to replace. 9. Focus on increasing revenues rather than cutting costs – HR traditionally focuses on cutting costs rather than increasing revenue. Freezing hiring, cutting head count and reducing training are common HR cost reduction tools. Unfortunately,

relying solely on cost-cutting measures can be a huge mistake because CEO’s prefer increasing revenues (top line growth) over cutting costs. Focus efforts on specific actions that directly increase revenue. And because individuals in revenue-generating positions (e.g. sales and collections) or revenue impact positions (e.g. customer service) have such a large impact on revenue, those positions should be prioritized. 10. Create competitive advantage – Because HR faces external talent competition, it’s not enough to simply operate in isolation and to improve your HR processes a little each year. Instead, you Endnotes must learn to look externally and 1 Jack Welsh, “Jack Welch: The Role of do a periodic external “competiHR”, Jack Welch Management Institute tive analysis” to ensure that each YouTube video https://www.youtube.com/ of your HR processes and results watch?v=rByDmC0SqtM, July 8, 2010 are superior to those of your direct product and talent competitors. If you expect to maintain a competitive advantage in the talent arena, it’s critical that your employer branding, recruiting and retention practices are continually measured and improved, so that you can maintain your lead.

Final Thoughts HR executives should expect to encounter a great deal of resistance when they attempt to evolve into a high business impact function. Initially, many in HR will argue that since they share with managers each of the factors that impact productivity, they can’t be held responsible for improving it. This is a weak argument because there are few business functions that have total control over their areas of About the Author responsibility. As a result, if HR expects An internationally known to have a high business impact, it must HR thought-leader from learn to live with the fact that they won’t the Silicon Valley who ever have total control in many areas that specializes in providing they share with managers. This lack of bold and high business impact strategic control will mean that rather than ordersolutions, Dr. John Sullivan is a prolific ing managers to act, HR will have to rely author with over 900 articles and 8 books on its well-known relationship building covering all of Talent Management. His and persuasive “influence” skills with the ideas have appeared in every major executives and managers. business source including The Wall Street ***** Part II of this article will appear in the next issue of Workforce Solutions Review.

Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, USA Today, HBR and the Financial Times. Fast Company called him the “Michael Jordan of Hiring.” He served as chief talent officer for Agilent Technologies and is currently a professor of Management at San Francisco State. His articles can be found on his popular website www.drjohnsullivan. com and on www.ERE.Net.

www.ihrim.org • Workforce Solutions Review • January 2016

feature Human Resources and the Emerging Employee-Consumer By Thomas O. Davenport and John M. Bremen, Willis Towers Watson What is the best way to describe the relationship between employers and employees? Since the early 1990s, employees have evolved from costs to assets, from hired hands to associates, from workers to thinkers, from cogs in the industrial machine to consumers in the customer service machine. This next step in the evolution of employee identity is to envision employees as an internal marketplace of consumers. The offering they seek (the employee value proposition, or EVP) is a portfolio of elements (including purpose and culture, the work they do, the people they work with, and formal rewards such as compensation and benefits, which they receive in their exchange with the company). To this exchange they bring their human capital — the intangible assets (skills, talent, knowledge and behaviors) they possess; these, combined with other organizational assets, create value for the enterprise. Where does this leave the role of human resources? Thinking of employees as a market of consumers requires HR to redefine itself not only as the organization’s human capital function, but also as its internal marketing and branding function. To play this role, HR must take a page from the marketing department’s playbook and apply traditional marketing approaches to employees. Marketing’s core concept is that a firm’s marketplace goals can be best achieved through identification and satisfaction of consumers’ stated and unstated preferences. HR’s focus in this environment would be to identify the needs and wants of internal consumers and prudently invest the organization’s people resources to deliver the highest value to employees at optimal cost to the enterprise. Many organizations have a long way to go to make their employment offering truly consumer-focused and deliver it with anything like the sophistication required of their external marketing group. As Exhibit 1 indicates, less than one quarter of employees surveyed in Towers Watson’s 2014 Global Workforce Study say that their organizations effectively communicate, deliver and competitively differentiate their employment offerings. More than half of surveyed employees say their companies either have no articulated EVP or haven’t communicated it clearly.

January 2016 • Workforce Solutions Review • www.ihrim.org

The fourth level – what we call Segmented and Differentiated – represents the minimum expectation of an effective external marketing unit. This is the standard to which HR will need to rise to compete effectively for the next generation of talent.

How should HR go about achieving this goal? Adopting an internal consumer-focused approach involves six specific process steps.

Step 1 – Idea Generation No matter how successful you perceive the company’s current employee value proposition to be, you will need to evaluate it periodically. Is it attracting the talent the company needs to succeed? Are recruiters and managers closing the deal with more than a fair share of candidates for critical jobs? Does key talent stay with the company once they become fully productive? If you can answer “yes” to all these questions, congratulations! But even in an organization that is winning the talent battle today (and especially if its competitors believe it is winning), HR should be thinking about how to stay ahead by expanding, upgrading, focusing, and enhancing the value proposition. Ideas for improving the value proposition fall into four basic categories: • Improvements to the current elements of the EVP: Much as auto companies have continuously improved their products over time, HR should look for ways to make incremental improvements to existing elements of the value proposition. Adding additional health care providers to the current program would be an

example, much like adding wireless capability to an existing minivan model. •

•

Additions or extensions to the current value proposition: Consumer products companies frequently build on the success of existing products by extending product lines – mini Reese’s Peanut Butter cups, for instance. A value proposition analogy might be the addition of new forms of equity (restricted stock, for example) to an existing stock option offering. Repositioning of specific value proposition components: Procter & Gamble repositioned Febreze from an occasional-use odor remover to a fabric freshener with everyday application. A company could do the same by repositioning its subsidized gym membership not just as a nice perk, but also as a way for employees to improve their health and wellness and reduce their (and the organization’s) health care expenses. New value proposition elements: Some products are revolutionary enough that they create whole new markets. Disposable diapers did that, as did smartphones. Who knows what value proposition analogs your organization might come up with – perhaps providing every employee with a puppy or a new Lamborghini…or more realistically, child care, elder care, pet care or financial wellness counseling. Some companies (especially those that serve consumers directly) have unique opportunities to provide discounts or different levels of access to the company’s own products.

ample, is an attractive concept. Many organizations have found, however, that it has high value to some employee segments (those with young children) but limited appeal across the breadth of the employee population. •

Where will the idea place the EVP and rewards array competitively? Will it move the company from a lagging position to parity or provide an opportunity for differentiation? If the latter, is it an advantage the organization can sustain (because, for instance, the company has more available cash than the competition, a stock with a higher beta or the ability to give employees bigger discounts on a product)?

•

How administratively feasible is the idea? As every consumer products company knows, the total cost of actually taking an offering to market includes distribution. In reward terms, this includes the cost of systems, people and external service providers to deliver the reward to employees. Are those costs and administrative burdens manageable or prohibitive?

•

How well does the idea align with the organization’s reward philosophy? If your culture is inherently intolerant of flexibility, is it realistic to try to introduce flexible hours or work-athome arrangements? If pay-for-performance is part of your stated reward strategy, would it be inconsistent to shift funds away from bonuses or stock options and into base pay or other forms of rewards?

The goal of the idea generation phase is to develop a roster of new or modified EVP elements. Where does the list come from? Brainstorming among HR experts; focus groups with employees; interviews with new hires from competitor organizations; discussions with the external recruiters; competitor information from Websites and other public sources; presentations competitors make in public forums (such as meetings for HR professionals).

If questions such as the ones above make your leaders uncomfortable, should you consider revising your reward philosophy? If many of HR’s ideas appear to have merit, given business strategy and competitive position, but seem at odds with the principles that guide reward design, it may be time to change the core principles. Perhaps they were established by a different leadership team or under a set of no-longer-relevant business and workforce assumptions.

Step 2 – Screening

Step 3 – Concept Development and Testing

In this second step, test the feasibility of the EVP concepts generated in Step 1. The goal is to weed out ideas with limited appeal or large practical barriers to implementation. Here are some questions to use: • How will this idea benefit employees? Which segment of the internal market will care the most? How important to competitive success are those employee segments? How large is the internal demand likely to be? You’ll answer these questions more rigorously later; for now, just estimate. On-site daycare, for ex-

Having narrowed the list of ideas to those most likely to be both important to employees and feasible to support, HR’s next step is to involve internal consumers in the testing process. The goal is to understand better which specific groups in the organization find offerings appealing, and to evaluate the best way to help employees understand the benefits of those offerings. Start by defining the most critical segments within the employee population. Pinpoint segment definitions you can consistently identify and reach. Tap www.ihrim.org • Workforce Solutions Review • January 2016

into meaningful behavioral differences within the target population — differences that provide guidance on real actions you can take. For inEndnotes stance, a segmentation approach based 1 H. Blodgett, “Google Gives All Employees on levels of risk-seeking behavior might Surprise $1,000 Cash Bonus And 10% be useful. Financial risk-seekers would Raise,” http://www.businessinsider.com/ google-bonus-and-raise-2010-11, Nov. 9, likely value incentive opportunities, and 2010. would probably respond well to a leveraged annual bonus plan. Conversely, risk-avoiders typically want stable base pay but generous health and retirement benefits. Segmentation criteria should leave room for creativity in exploring the values and attitudes of the employee population. HR can begin with such standard demographics as generational categories. However, more inventive (and perhaps meaningful) segmentation variables could include strategically critical jobs, performance levels, or attitudes toward particular rewards (career advancement, for instance). Once HR has segmented the employee population, the next step is to test reward ideas to determine which have the highest perceived value across the employee segments. The key is to involve employees as partners in defining the value proposition that carries the greatest appeal to them. Consumer product companies do this when they conduct market research to understand how their target segments will respond to features and pricing of proposed offerings. Such research can take a number of forms: focus groups; data mining; employee surveys; or tradeoff analysis (a market research approach that calls for people to indicate which rewards they would willing exchange for others). At one fast-growing social-media company, HR used a tradeoff survey to better understand reward preferences. The survey revealed that employees placed high value on adding a matching provision to the retirement savings plan. This finding surprised management: Why would a population of millennials value something as chronologically far off (and, frankly, old-school) as a boost to their retirement savings? To test the result, management conducted a series of focus groups. What they found surprised them at first but then made sense. As one employee said, “Saving for retirement is the one thing my parents tell me that I actually listen to.” Further, employees said they believe they will ultimately need to take full responsibility for funding their own retirement. Armed with this information, the organization was able to add a simple but powerful reward.

Step 4 – Product Development and Financial Analysis With the knowledge gained from screening and testing a set of value proposition components, HR is now ready to “spec” the design of elements to be

January 2016 • Workforce Solutions Review • www.ihrim.org

preserved, modified or eliminated. Knowing what employees value most and least, HR must translate value information (market researchers would call these utility scores) into rewards the organization can actually afford and deliver. To complete the design process, HR and Finance should conduct an optimization analysis. The analysis must take into account the cost to upgrade certain reward elements, balanced by opportunities to reduce investment in lower-value elements. The objective is to achieve the best possible net effect on employee perceptions of the resulting reward portfolios. In the financial analysis, HR should consider the year-one costs and savings of reward changes, downstream investments in subsequent years and the administrative costs associated with supporting new and possibly innovative reward elements. In a well-known example, Google has taken this kind of reward research and analysis to heights reached by few, if any, other organizations. A few years ago, Google surveyed its employees to learn about the rewards they valued most. Using the findings, the company famously decided in 2010 to raise all employee salaries by 10 percent, funding the increase in part with money moved from the annual bonus plan. As Google CEO Eric Schmidt said at the time, “We’ve heard from your feedback on Googlegeist and other surveys that salary is more important to you than any other component of pay (i.e., bonus and equity). To address that, we’re moving a portion of your bonus into your base salary, so now it’s income you can count on every time you get your paycheck.”1 Google also ran the numbers on the billions the company would spend on increased pay, plus the US$1,000 end-of-year bonus provided to all employees in 2010, offset against potential savings in bonuses and stock. Company analysis no doubt indicated that the net investment would yield a positive return in terms of reduced turnover cost and higher productivity from employee engagement and motivation.

Step 5 – Product Delivery and Promotion Products are not real until they reach the hands of the target consumer. This means deciding how employees will learn about and gain access to components of the reward portfolio. How will you inform them about the innovative elements of your employment deal? How do they sign up for the new alternatives? Who will explain how new compensation, retirement or equity plans work? How will they access their accounts, find out how well plans are performing and make changes? Once HR has ensured that delivery and administration processes are in place and functioning, it’s time to communicate the value proposition and give it a brand identity. In the consumer products world,

a brand is the cluster of beliefs, experiences and impressions that consumers attach to a product or service. In essence, a brand is a condensed packet of information that helps people make purchase decisions with minimal repeated analysis. Having a wellknown brand with rich positive associations means people know immediately what a product represents and how it will perform. Buy an iPad and you know you will get innovative technology and a cool user experience. Buy a Mercedes Benz and you will feel confident you own a fine a luxury car with plenty of caché. In each case, buyers can make their choices without going through a lengthy purchase assessment – consumers already know what to expect from these well-known brands. The same factors apply to the brand that companies attach to their employee value propositions. An internal brand tells employees and candidates what the organization stands for and how they can expect to be rewarded for contributing to their jobs and to the enterprise. As with a consumer product, organizations build their internal brands by making and keeping performance promises. The company started the process of building a brand by setting out to understand employee needs and preferences. Leadership had in mind the positive associations the company wanted to incorporate into the value proposition. HR designed a portfolio of rewards to meet employee needs through prudent organizational investment (Steps 1 through 4). Those offering elements were made accessible in Step 5. Reinforcing the value provided and embedding the notion of that value is now the goal of the branding and communication process. Fulfilling and communicating an EVP’s promises requires more than just internal public relations. Many organizations will have work ahead of them to convince skeptical employees that reward communication is anything more than just hype or superficial banter. As Exhibit 2 shows, employees often perceive that the value propositions of their organizations are no different from what they could get at any other company.

Moreover, employees experience much of the EVP communication they receive as basic explaining and

convincing. Often, they observe much less effort focused on connecting reward program elements with actual employee needs. A consumer products company whose messages were believed to be this tilted toward selling rather than linking offering features with needs would find itself out of business quickly. The strongest internal brands reflect values that are consistent with the organization’s external market position. Few things frustrate employees more than having to project a positive image to the market through their innovative ideas and strong customer service, only to have a vastly different experience inside the organization. Conversely, companies that ensure consistency between their internal and external brands receive the boost of extra leverage as satisfied employees reflect their positive attitudes through their interactions with the external market.

Step 6 – Measurement and Possible Modification

About the Authors Thomas O. Davenport is a senior consultant with Willis Towers Watson, a global human resources consulting firm. He provides consulting services on manager effectiveness, employee and organization research, and reward strategy to clients across a broad range of industries. He is the author of two books: Manager Redefined: The Competitive Advantage in the Middle of Your Organization and Human Capital: What It Is and Why People Invest It. He can be reached at tom.davenport@ towerswatson.com.

John M. Bremen leads Willis Towers Watson’s Human Capital and Benefits business in North America. He also actively consults with senior executives and boards around the world in a number of practice areas related to talent and rewards,and leads the firm’s global total rewards team. He is based in Chicago. He can be reached at john. bremen@towerswatson.com.

Successful consumer products companies know that their product designs will rarely remain static, and that their brands will need periodic (or even frequent) refreshing. Successful companies take the same perspective with their reward portfolios. They continue to survey, conduct focus groups and monitor employee engagement, and turnover. As their business strategy and human capital needs evolve and the competitive environment changes, they go back through all six steps of the product development process, in varying levels of depth, and ask themselves a few critical questions: • Are we getting the hiring, performance, and retention results we expect from our value proposition? •

Are there new ideas we should consider, perhaps because the competition is innovating or our employee needs and preferences are evolving?

•

Are we still investing our reward dollars in the optimal way? Does our return on that investment remain at the level we need?

HR may choose to repeat a few or even all of the steps, some in abbreviated form and others in more depth. Only by constantly re-evaluating and possibly reconfiguring reward offerings can an organization expect to preserve and improve its competitive position. A human resource department that sees itself as the organization’s internal marketing function must take the lead in advocating, defining, and executing those changes. www.ihrim.org • Workforce Solutions Review • January 2016

feature The Future of Recruiting: The Art of Matchmaking in a World of Applicant Tracking Systems By Hila Halutzy, RedMatch

It is the year 2020 – recruiters around the globe are gathered at a conference dedicated to the discussion of contemporary challenges in the recruiting profession. What does the agenda look like? Over the past 10 years, changes in recruiting practices have transported recruiters into a new age. As the marketplace has moved toward online and social tools as its main resources, recruiters have found themselves in a big-data frenzy. Identification of passive candidates and candidate pooling are easier than ever. Add-on tools are available to support recruiters’ efforts to compete over already happily employed talent, to get there first and make the biggest impression. To keep up, applicant tracking systems have evolved to the point of complete automation of the recruiting process, affording recruiters new abilities to expand their offerings, as well as attract, find,

Can applicant tracking help recruiters be relational experts? In order to succeed, recruiters must remember the past and anticipate the future. But first, we must cover the basics. According to the latest data, the top concerns of recruiters today when choosing their applicant tracking system include: •

Simplicity: Recruiters are seeking solutions that require little to no IT support, cloud-based services, easy activation with affordable subscriptions, as well as smooth navigation, user-friendliness, and accessibility.

•

Data Analysis and Reporting: Sorting through large batches of online profiles on social networks, résumés, and interviews can be an impossible task. Recruiters are seeking solutions that shortlist the best matches from the talent pool, allow them to keep track of multiple recruiting lines, calculate their sources’ ROI, and improve their time-to-hire.

•

Getting Social: Many recruiters are pitching to a dynamic audience of millennials (also referred to as Generation Y) and prefer to hire passive candidates. They are seeking applicant tracking solutions that help them stand out in front of their talent pool.

•

Safety: Recruiters require EEO and OFCCP compliance and data storage.

•

Integration: Recruiters need solutions that seamlessly integrate with HRIS, ERP, CRM, payroll, and business intelligence systems.

organize, and hire prime talent.

What have we lost in gaining these new tools? In the beginning of the new millennium, my first mentor in recruiting was a relational wiz. She was a very successful recruiter because she saw recruiting as a form of matchmaking. She was trusted to bring value by making phenomenal matches between her clients, hiring managers and candidates alike. In order to do that, she made sure she knew everyone very well. She adjusted herself to their varied communication styles and always kept in touch. She understood that recruiters don’t create revenue directly; they are instead measured by the value they bring through forming meaningful relationships between the organization and the people they recruit.

January 2016 • Workforce Solutions Review • www.ihrim.org

What makes the difference between an old-school recruiter and a future-minded matchmaker?

“With the cost of replacing the wrong hire being up to 5 times greater than the salary of the original employee, recruiters are expected to not only be up-to-date with the latest technological advances in their trade but to also be experts in relationships, both personal and public.”

By combining the best that technology has to offer with the interpersonal skills recruiters are known for, recruiters will continue to thrive in the big data world. •

•

Proactivity: Competition is a constant challenge for many recruiters. Being proactive increases a recruiter’s chance of getting to the right candidate for the job in the shortest time possible. Among other things, an applicant tracking system with sizable database searching abilities, and a built-in event and activity planner supports this. Flexibility and Adaptive Communication: Relationship experts know that flexibility is key to establishing meaningful communication. Excellent matchmakers seek an applicant tracking system that supports multilingual applications, a variety of application formats to suit their target audiences, as well as customizable settings for hiring managers, user-types, permissions, and interview formats to support a wide variety of needs and communication styles. Staying in Touch: Matchmakers know that staying in touch builds trust. They seek an applicant tracking system that keeps them in front of their talent pool, by sending out customized email campaigns to select candidate demographics, keeping candidates informed of new career opportunities and reminding them to keep their profile up-to-date with their skills and certifications. Good Public Relations: Among other things, matchmakers must let their talent audience know they care about offering them positions that are a great fit. They need an applicant tracking system that works beyond a preset selection of job boards so they can automatically be wherever their candidates are interacting. In addition, they need a customizable interface that represents the identity of their organization well in front of their candidates.

•

Addressing Preferences: Creating a valuable and lasting match depends on considering the unique employment preferences of both sides of the relationship. Matchmakers seek a solution that enables them to easily recognize and respond to changing patterns in their talent audience.

•

Attention to Detail: Matchmakers need an applicant tracking system with refined matching abilities, robust search engine and filters, and a general attention to detail that protects their discretion throughout the recruiting process.

•

Resource Utilization and Collaboration: Excellent matchmakers don’t work alone. They are adept at sharing and know that an online presence is often not enough to attract the best talent. They seek an all-in-one solution that enables them to utilize and easily communicate with third party recruiters, as well as employees and colleagues. They seek to effectively run internal mobility and referral programs easily and whenever necessary.

•

Successful Onboarding: Successful onboarding is an important step in building valuable relationships with new hires. Good matchmakers are not satisfied with out-of-the-box onboarding technology and seek customizable solutions.

In summary, choosing the right applicant tracking system enables future recruiters to intertwine cutting edge technology with relational sensitivity, flexibility, attention to detail and expertise. Solid, flexible technology enables these recruiters to create maximum value by personalizing the experience for the candidates, while providing robust reporting and big data analytics to their organizations.

About the Author Hila Halutzy is a veteran Human Resources and Organizational Development executive. She has served international organizations as a manager of recruiting and global HR initiatives. She is a proud member of the RedMatch team as the director of Customer Relations in North America. Please visit www. redmatch.com to learn more about the RedMatch Applicant Tracking technology. She can be reached at hila@redmatch.com.

www.ihrim.org • Workforce Solutions Review • January 2016

2016 Annual Buyers Guide The 2016 Annual Buyers Guide will serve as a valuable reference tool. For your convenience, the guide has two sections: a Categorical Listing and an Alphabetical listing. In the Categorical Listing, companies are listed under the product and service categories of their choice. For information on a specific company and its products and/or service, please refer to the Alphabetical Company Listing. While a listing in this guide does not constitute an endorsement by IHRIM, it does indicate that these companies are interested in serving the needs of HRIS professionals. We hope this Buyer’s Guide will assist you in your 2016 purchasing decisions.

Product Categories

Core HRMS

Ceridian Kronos Incorporated Optimum Solutions, Inc. StarGarden Corporation

Business Intelligence

Analytics Ceridian Kronos Incorporated Dashboards Ceridian

Compensation Management

Deferred Compensation DECUSOFT Executive Compensation DECUSOFT Incentive Compensation DECUSOFT Enterprise Information Resources Inc.

Paid Advertising

Cloud Computing Ceridian Enterprise Information Resources Inc. On-Premise Optimum Solutions, Inc. SaaS Ceridian Optimum Solutions, Inc. Self Service Ceridian Telliris

Employment Systems & Services

e-Recruiting/Application Tracking Ceridian First Advantage

Onboarding

Ceridian

Payroll Software

Ceridian Kronos Incorporated Optimum Solutions, Inc.

HR Service Delivery

Performance Management

Ceridian CRG emPerform Enterprise Information Resources Inc.

Rewards/Recognition

Crystal Plus HRsoft

Self Service

Employee Self-Service (ESS)/Manager SelfService (MSS) Ceridian Kronos Incorporated Telliris

Time & Attendance Systems

Ceridian Kronos Incorporated Optimum Solutions, Inc. Telliris

Payroll Services

Payroll Outsourcing Ceridian Tax Ceridian

January 2016 • Workforce Solutions Review • www.ihrim.org

Workforce Management

Contingent Workforce Management Ceridian Forecasting & Scheduling Ceridian Kronos Incorporated

2016 Annual Buyers Guide

Alphabetical Company Listing* *Systems and applications referred to in this section are trademarked, registered, or in progress. These names should not be used generically.

Ceridian

3311 E. Old Shakopee Rd Minneapolis, MN 55425 Resource Center 800-729-7655 onesource@ceridian.com www.ceridian.com/IHRIM Ceridian is a global leader in human capital management technology serving over 25 million users in more than 50 countries. We deliver trusted results and transformative technology with a wide range of solutions including human resources, payroll, workforce management, talent management, tax compliance, benefits, employee assistance and wellness programs.

CRG emPerform

6 Antares Dr. Phase 1 Suite 200 Ottawa, ON, K2E 8A9 877-711-0367 613-232-4295 info@employee-performance.com www.employee-performance.com Eliminate the hassle of manual appraisals and get easy-to-use, affordable, and effective ongoing performance management with emPerform. emPerform delivers a full suite of employee performance management functionality to align, develop, reward, and retail a world-class workforce. Online appraisals & self-assessments, ongoing feedback, 360° reviews, compensation management, reporting, surveys, and talent identification. Get started with a free trial.

Enterprise Information Resources Inc.

Crystal Plus.com

18475 E. Valley Blvd. City of Industry, CA 91744 Michelle Smith 888-779-8803 888-669-0838 service@crystalplus.com www.crystalplus.com CrystalPlus.com is a leading supplier / manufacturer of crystal awards and corporate gifts. We offer free engraving and no setup charges on all of our crystal awards and gift products. We have in house professional graphic designers, engravers and customer service specialists to serve our customers making ordering crystal awards and gifts easier than ever. At Factory direct prices and with huge inventory selection at our California warehouse, you can’t find any better prices and faster turnaround for the same premium quality of custom engraved corporate awards, sports trophy and personalized gifts. See our ad on page 43.

271 Waverley Oaks Rd. Suite 207 Waltham, MA 02452 Gin O’Leary 855-589-9451 617-924-4802 info@erpinforesources.com www.erpinforesources.com

Enterprise Information Resources Inc. (EIR) Get the most from your talent management strategy with EIR expertise, proven technology and service offerings. EIR’s advanced automation tools turn your system into a major company asset providing the accurate, actionable data necessary for reaching a true competitive advantage. EIR is a member of the SAP PartnerEdge program. We are authorized to resell and are a certified implementation partner for SAP SuccessFactors solutions. See our ad on page 45.

First Advantage Decusoft 70 Hilltop Rd. Suite 1003 Ramsey, NJ 07446 Karie Johnson 201-258-1414 201-785-0774 karie.johnson@decusoft.com www.decusoft.com You have an HCM software suite but are managing compensation outside the system? Now what? You need COMPOSE, a specialized compensation management software solution that handles any level of variable compensation complexity, reduces your total cost of compensation administration and integrates with existing HR solutions. Not so suite but oh so right. See our ad on the Inside Front Cover.

1 Concourse Parkway NE, Suite 200 Atlanta, GA 30328 Shari Hubbert 844-317-5232 solutions@fadv.com www.fadv.com As the trusted partner of 45,000 organizations worldwide, we at First Advantage provide easyto-understand background checks so you can confidently make decisions about prospective employees and contractors. Now in 27 locations worldwide, First Advantage conducts over 54 million international background screens on 16.8 million applicants annually. Trusted Knowledge. Exceptional People.

www.ihrim.org • Workforce Solutions Review • January 2016

2016 Annual Buyers Guide

2015 Compensation/Benefits Buyer’s Guide

HRsoft

2200 Lucien Way, Suite 201 Maitland, FL 32751 Brian Sharp 866-953-8800 ext. 771 Brian.Sharp@hrsoft.com https://hrsoft.com/ Automate, Align & Simplify Complex Compensation Planning! COMPview is a bestof-breed compensation planning software system that automates, streamlines and simplifies complex compensation planning by giving managers an intuitive, decision support tool to help optimize budget allocations, increase accuracy and align compensation decisions with organizational guidelines.

Kronos Incorporated 297 Billerica Road Chelmsford, MA 01824 Sales 800-225-1561 info@kronos.com www.kronos.com With tens of thousands of customers around the globe, Kronos is the leader in workforce management solutions. We deliver industryfocused time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics solutions and services – in our cloud and on the go. Kronos: Workforce Innovation That Works.

Optimum Solutions

210 25th Avenue North, Suite 700 Nashville, TN 37205 Scott Henderson 615-329-2313 615-329-4448 sales@optimum-solutions.com http://www.optimumhris.com Optimum Solutions provides Payroll, HR, and Time & Attendance software delivered onpremise or in the cloud. All applications are developed and supported internally, giving your company the individual attention it deserves while providing you with a complete, one database HRIS solution. Optimum Payroll clients currently process over 12 million paychecks annually.

StarGarden Corporation

300-3665 Kingsway Vancouver, BC V5R5W2 Marnie Larson 800-809-2880 info@stargarden.com www.stargarden.com Let StarGarden’s 30 years of experience help manage your most important resource. Get the right resource on task at the right time with StarGarden’s advanced HCM, Payroll, and Workflow functionality.

January 2016 • Workforce Solutions Review • www.ihrim.org

Telliris

4 Armstrong Rd. Shelton, CT 06484 Sales Department 203-924-7000 sales@telliris.com www.telliris.com Mobile Enable your Time & Attendance with Telliris. It’s integrated and ready to use with many packages (Ceridian, Focus, HBS, Identatronics, Infinisource, InfoTronics, Insperityy, Kaba Workforce Solutions, Kronos, Renova, ScheduleSoft, Sense Software, SumTotal Systems, Time Link, UniFocus, and Workforce Software). Apps include Absence, Accruals, Crew Clock, Employee Messaging, ESS, Scheduling, Time Clock, Time Sheet, and Time-off Request. It’s ideal for organizations with dispersed, remote or mobile employees. Please contact Telliris or your Time & Attendance vendor for details.

Executive Interview

Amplify, Don’t Assess Performance! Goals, priorities, real-time collaboration, and continuous feedback are all essential to creating a high performance culture. HR can galvanize achievement of strategic and operating plans by creating greater goal visibility, enabling execution, and supporting performance coaching…so long as it is not stuck in the assessment spin cycle. Q: What is the role of HR in performance management today? Diedre Paknad: The traditional role has been to define and administer a performance assessment process and compensation, so the focus has been on compliance and control. Numerous studies by Towers Watson, Deloitte and others have made it clear that these traditional efforts aren’t highly valued by the business, and have little impact on business performance. There is a great opportunity for HR to help the business amplify rather than just assess performance, and to be strategic partners in achieving business results. Q: How successful has HR been in making this shift? Paknad: We are at the beginning of a transformation, and there is still a long way to go. It requires a shift in mindset from tactician to advisor, strategist and partner to the business; not partner in administration, but partner in achievement. While a number of great HR leaders and executives have this mindset, for others it may mean changing the culture and practices in HR. The first shift is to mirror the innovation and iteration speed of business itself! Q: There is an emergence of apps and dashboards being used by businesses to help manage individual and organizational performance. Can these apps help HR to speak the language of business and get a seat at the table? Paknad: That’s a great question. Performance apps have great promise for helping HR better understand real business goals, quarterly promises to shareholders and stakeholders, and their operating constraints. For HR organizations concerned about employee engagement, they’re a gold mine because they provide people with purpose, focus, and clarity on the impact of their work. By providing transparency to HR, as well as line of business teams, goal apps help HR become true partners in strategy and growth — as long as the apps are not co-opted, and the purpose shifted from driving achievement toward assessment and administration. Q: What do you see as the long-term role of technology for HR and performance management? Paknad: There is a generational shift right now in how technology is used by HR —both for traditional

people applications and for the business. Instantly useful and mobile real-time analytics have enabled a consumer-like experience for managers and staff, and this trend will only continue. Q: With real-time analytics and reporting on how teams are actually performing, does the responsibility for performance get focused more on the manager, where many would argue it belongs? Paknad: Absolutely! And it’s not just that it shifts there, but the manager actually gets the time and capacity to own the performance of his team and his own performance — gets to really take control and lead as opposed to being in a continuously reactive mode. When you think that managers can get 20 hours per month back from not preparing reports and recapping progress in drawn-out monthly ops meetings, cadence calls, and quarterly business reviews, that’s a huge upshift in capacity. Instead of using PowerPoint to communicate progress and Excel to manage that progress, managers and team members can visualize and communicate progress in real-time. Everyone can look on the phone and see status or give feedback anytime anywhere. Those 20 hours can be used to coach, to lead, to guide, to triage priorities and to actually perform. Q: What inspired you to create Workboard? Paknad: Quite literally, when I ran a global team at IBM, I wanted more capacity to communicate goals to my team. I wanted it to take less effort to understand what our progress was against those goals and to get more transparency on our execution. And I needed — and didn’t have — time to do the coaching and give the feedback to members of my team. I needed that capacity because the tools I had were the same tools we have had for 25 years: Power Point, Excel, Email and Word documents that are glued together with time and labor from managers and leaders everywhere. I looked for an app and did not see a good choice out there. So I went to investors and got the green light to build it.

Deidre Paknad, Workboard CEO

This interview was conducted by Michael Scott Manzagol, Managing Partner of Global Reach Leadership — a consulting firm specializing in leadership and organizational transformation. He can be reached at michael@ globalreachleadership. com.

Q: Central to your value proposition is the concept of “velocity.” What does this mean in the context of organizational performance? Paknad: It really comes down to the pace of performance. By velocity we mean the pace of learning, iteration, innovation, and achievement. This is crucial in legacy and competitive markets because faster, www.ihrim.org • Workforce Solutions Review • January 2016

more agile competitors are a very genuine threat. CEOs worry about organization velocity. When organizations identify and share short-range ambitious goals, people can understand those goals and concentrate their time and energy toward them. What that means from a performance perspective is that you can change the performance curve — not the performance ratings curve, but what actually is accomplished in a 12- or 24-month period. Q: How does a tool like Workboard enable greater collaboration between individuals and across teams? Paknad: Because it provides transparency on what goals and metrics people are working towards, and the actions and workload they have to achieve those, the first thing it does is it breeds trust. I understand what you are working on. I understand what you are trying to achieve. I can see it so right away I have a different appreciation for what your contribution is to the organization and the complexity of that contribution. And, likewise, you can see mine. Transparency and trust are not only helpful within organizations, but also across ecosystems. Teams come together cross-functionally in pursuit of shared goals. We create the ability to stand up teams in less than 30 seconds…form a set of goals, allocate the work…share data and enable continuous feedback. Q: How can an app like Workboard have a transformative impact on a company’s culture? Paknad: Great question. I think there are a couple dimensions to it. For one, I would reiterate trust. People don’t often talk about trust as a part of great cultures but they should. The second is clarity. What we find over and over again is that when people don’t understand the company goals or how those actually relate to About Deidre Paknad them and their work — today, this week, As CEO of Workboard, Paknad has and next month — there is a continuous the benefit of experience leading buzz of anxiety. They don’t know what businesses and making markets. Her success looks like, they don’t know whether last company, PSS Systems, invented they are successful, they don’t know how a new category of software when it they are being measured, and they don’t anticipated the challenges companies would face when expanding legal duties know if their boss thinks they are doing the for information collided with extreme right thing, or not. In the absence of real information volumes. In October 2010, clarity — not 12 months out, but the next 8 IBM acquired PSS Systems; at IBM she to 12 to weeks — there is distrust, disjointled a fast growing global business and edness, and an underlying discomfort that the acquisition of another company. make it hard to have a fantastic culture. She has 16 patents issued or pendWhere Workboard excels is in driving, contributed significantly to the creation of industry reference models ing what I call “radical clarity” so that and standards (IGRM, CGOC maturity everyone has real understanding of what model), has authored numerous papers, success looks like and how they connect founded the CGOC (Compliance, to it. Seeing what success is for others Governance and Oversight Council) with (and what they are doing to move toward over 2500 members, and is recognized that success) provides the basis for shared by the Smithsonian for innovation purpose, gives us the opportunity to cheer twice. She can be reached at deidre@ workboard.com.

January 2016 • Workforce Solutions Review • www.ihrim.org

each other on. It helps us hold ourselves accountable, and it allows others to hold us accountable in ways we can live with. Q: Could you describe an example of a successful adoption of Workboard in terms of ROI by a client? Paknad: In aggregate, our customers for Q3 of 2015 had: • a 140% increase in day-to-day goal awareness; • 125 execution hours saved per team; and, • Team members receive feedback an average of 3.5 times a week. The metric that is even more compelling to senior executives is what I call the magic number of 45 minutes a week of goal focus. Spending at minimum this amount of time consistently produces goal achievement. And spending less than that per week consistently produces low goal achievement. There is a simple relationship between the two. The dynamic is exactly like FitBit and Strava — the more steps or miles you log, the more you move because it’s self boosting and, of course, if you never even log in, you don’t reach your goals. We see a very direct relationship between people looking at their goals and people achieving those goals. Q: Five years from now, what impact do you hope Workboard will have on the HR function and how we work? Paknad: I believe that five years from now companies will measure their “velocity quotient.” They’ll use it as an indicator of their competitiveness, culture, climate, and employee engagement. And HR organizations will care about elevating their organization’s “VQ.” It will be a metric that indicates the degree and level of bureaucracy, of quicksand involved in getting things done, of the pace of learning and innovation. And if you are an employee evaluating where you want to work, you will not pick a company with low VQ — which means high bureaucracy, low learning, and low innovation. You will not go to work there. In five years, we think the VQ metric will be something Glassdoor will have on your company and HR will care deeply about. Business leaders will care about it because shareholders will see it as a reflection of long-term competitiveness and return on “intellect.” High VQ companies’ dollars, capital, people, and brain trust are focused on great achievement, not on the burdens of process and bureaucracy. Great achievement is a series of sprints, but so many companies have heavy processes wrapped around innovation, learning, and iteration — often taking longer than 12 weeks. The processes themselves make a sprint impossible. This fundamentally slows down business and those companies are at real risk of being knocked off, cut off, undercut, and bypassed by their customers and competitors.

The Technology Haves and Have-Nots By Karen Beaman, Teilasa Global Plus ça change, plus c’est la même chose. The more things change, the more they stay the same… While a lot has changed in the 20+ years that I’ve been working on the IHRIM Editorial Committee, for the vast majority of users, a lot remains the same. We have new vendors, new technology models, new functionality, and yet most organizations are still wrestling with the same old problems. Many of the most promising changes in technology over the last 20 years simply have not been widely adopted by the vast majority of users and thus have not resulted in improvements that bring greater strategic value to the HR/Payroll function. This is creating a growing chasm between the ‘Technology Haves’ – the top 25% of high-technology adopting organizations – and the ‘Technology Have-Nots’ – the rest of the population. The reasons for this lack adoption are many and varied. Some claim lack of budget or are unable to justify the business case. Others take a short-term view, opting to offshore the problem to low-cost workers rather than automate the function and eliminate the work. Still others see new technologies as something out of Star Wars – exciting to watch but far away from their own reality. However, the major reason for the low technology uptake in HR/Payroll is the lack of a strategic mindset among the HR/Payroll staff – that is, an inability to understand and evaluate the strategic value that new technology can bring, thereby creating greater business value for the organization. Three areas demonstrate this growing chasm between technology availability and user adoption quite unmistakably: systems integration, advanced metrics, and mobile/social access. With data drawn from surveys carried out by Jeitosa and Mercer over the last four years, these three areas critical to the HR/Payroll function demonstrate the growing divide between the Technology Haves and the Have-Nots.

Systems Integration Looking at the results of the Jeitosa and Mercer Payroll Benchmarking Surveys with a total of 166 global organizations over the last four years, we can see a strong decline in the level of HR/Payroll systems integration year-over-year (see Figure 1). We consider a high level of integraFigure 1. Systems Integration Adoption over Four Years. tion to be three or more country payroll systems integrated with the core HRMS. Even though many software vendors are now providing “connectors” and “packaged integrations” to facilitate the implementation effort, the level of system integration has been declining from a high of 61% in 2013 to less than half of responding organizations (45%) in the most recent survey. And what is the main reason that organizations give for this low level of integration? It’s their inability to establish the business case. And what is the impact of this situation? Poor data quality and an inability to provide critical enterprise-level metrics and analytics on the total cost of the workforce and the overall effectiveness of the global HR/Payroll function. The benchmarking surveys categorize organizations into four models according to their financial performance (size and growth of both revenue and margin) over five years. The ‘Darlings’ are the top 25% of organizations that are growing both revenue and margin faster than their peers. The ‘Hunters’ are those that grow revenue faster, and the ‘Gardeners’ are those that grow margin faster. The ‘Hopefuls’ are those growing both revenue and margin significantly less than their peers.

Figure 2. Systems Integration by Performance Model. www.ihrim.org • Workforce Solutions Review • January 2016

Looking at HR/Payroll system integration by financial performance model over the last four years, we see that the Darlings are achieving greater integration, increasing from 26% in 2012 to 39% in 2015 (see Figure 2). The other three performance models show a significant decline in the level of integration between their HR and Payroll systems. This growing divide between the the Technology Haves (‘Darlings’) and the Have-Nots (all others) is creating a chasm between those organizations that have integrated systems with high quality data and those that do not. Organizations with money and data are in a better position to elevate HR/ Payroll to a more strategic business function, thereby acquiring better talent and offering a higher level of services to their employees.

Advanced Metrics

business decisions. This lack of strategic, analytical thinking is clearly holding the HR/Payroll function back. Looking at advanced metrics adoption by financial performance model, we see one group making progress. The Hunters have grown advanced metrics adoption from 6% in 2012 to 40% in 2014 and back to 30% in 2015 (see Figure 4). Hunters are highly focused on growth and increasing their market share in very competitive business environments. Advanced metrics, such as leading and predictive analytics, give Hunters just the data they need to assess their progress vis-à-vis their peers and drive greater business results. So the Hunters are the Technology Haves when it comes to advanced metrics, while the other models show little to no uptake.

Over the last four years, the benchmarking surveys have looked at the type of metrics frameworks that organizations have in place for global payroll, from basic, vendor-supplied metrics to a compliance and control-oriented framework to a root cause and predictive analytics framework – the latter being the most advanced framework. Figure 4. Metrics Adoption by Performance Model.

Figure 3. Advance Metrics Adoption over Four Years.

Yet in spite of all the hype over metrics in the industry and even with a plethora of new technologies and metrics-focused vendors on the market, we have seen little change in advanced metrics adoption over the last four years. In 2015 as in 2012, only 20% of organizations report to have an advanced metrics framework in place (see Figure 3). The most common reason for the lack of advanced metrics adoption is competence: HR/ Payroll people don’t generally come into the function with an analytical background or the necessary skills to work with metrics. In addition, HR/Payroll people are not as business-focused as they need to be and they don’t typically understand how to use metrics to drive better

January 2016 • Workforce Solutions Review • www.ihrim.org

Figure 5. Mobile/Social Adoption over Four Years.

Figure 6. Mobile/Social Adoption by Performance Model.

Mobile/Social Access Another new technology that is on the way to becoming ubiquitous for all consumer-based applications is mobile and social access. Yet despite this ubiquity for consumers, adoption for HR and Payroll applications is severely lagging. The level of mobile/social adoption over the last four years is fairly stagnant between 10% and 12% (see Figure 5). The main reasons that users give for this low level of mobile adoption is the lack of adequate security and concerns about protecting personal data outside of the organization’s firewall. While this is clearly an issue with personal and payroll related data, many organizations have conquered this issue – just think of mobile banking and the success of applications like PayPal and Square. Looking at mobile/social adoption rates by financial performance model, the Darlings and Hunters have made some limited progress in providing greater mobile/social access (between 10% and 20%), while the others have made little to no progress (see Figure 6). The divide between the Technology Haves and Have-Nots demonstrates that innovative technology strategies are much more likely to be implemented by financially successful organizations – those that have the money and the resources to do it.

Change and Adoption One approach to addressing these low technology adoption rates is to implement a comprehensive change management program. The first step is to change the mindset of the HR/Payroll staff to become more strategic and business-oriented. Individuals with a global, strategic, and business-focused mindset can develop the business case to demonstrate the value that greater adoption of these new technologies can bring to the HR/Payroll function. Certainly some people can be retrained through education programs and cross-functional, cross-geograph-

ic assignments, but many will need to be hired new into the function bringing these skills as core competencies. The second step is to change the practices of the end users to embrace greater technology automation. There are two basic approaches: gradual and cold-turkey. In either case, a formal change management program with training, communications, support, and effective change strategies and plans is critical. Change management increases the likelihood of success of any initiative. The findings from the 2015-2016 SierraCedar HR Technology Survey demonstrate very clearly the value in having a formal change management program in place. According to the survey, “Organizations with a culture of change management are twice as likely to be viewed by all levels of management as contributing strategic value, versus organizations that never use change management.” So how do we close the gap between the Technology Have and the Have-Nots? A number of suggestions come to mind. First, we need to rein in those organizations that move their profits offshore, avoiding taxes to increase their profits. Simultaneously, we should provide tax breaks for those organizations that are growing their businesses responsibly. Second, we can make new About the Author technology easier to impleKaren V. Beaman, HRIP, is the managing director for Teilasa Global and the founder ment and lower the total cost and lead researcher for Mercer’s Payroll of ownership, making it more Benchmarking Survey (MPBS), a unique accessible to a wider majority ground-breaking research effort focused on of the population. And finally, uncovering leading practices in payroll. She we need to change the mindhas 30 years of diversified human capital management (HCM) experience, covering global strategic planning, application set of the HR/Payroll team to development, data modeling, business process optimization, become more strategic and shared services delivery strategies, business case developbusiness-focused, underment, and global systems deployment. Beaman was previstanding how to build the ously the founder and chief executive of Jeitosa Group Interbusiness case that effectively national, a worldwide strategic business consultancy providbalances both investment and ing solutions for global effectiveness, which was acquired by Mercer in 2014. She led the team that developed the global innovation for the organizastrategy and built the requirements for the foundational core tion.

of Workday’s new HCM system. Previously, she was responsible for ADP’s global professional services across the Americas, Europe, and Asia Pacific. Beaman was the co-founder and editor-in-chief of the IHRIM Journal, is past managing editor of Workforce Solutions Review, and is the editor of four IHRIM Press books. She is a certified Human Resource Information Professional (HRIP) and, in 2002, she received the Summit Award, IHRIM’s highest award honoring her lifetime achievements in the field of HR. She is fluent in English, German, and French and conversational in Spanish and Portuguese. She can be reached at karen.beaman@teilasa.com.

www.ihrim.org • Workforce Solutions Review • January 2016

The HR Leadership Imperative – Survive or Die!

Building a Case for HR’s Lead Role in Workforce Effectiveness and Innovation By Ed Colby, InnovationOne.US I hope my title got your attention! Not because you might think I’m suggesting that the HR function is in the ER on its deathbed. Quite the contrary! I wanted to get your attention because I believe that never before has the organizational need been more critical than now for HR Leaders to rise up, and take a much stronger, more direct role in the oversight and ownership of what we (HCM Industry) have been referring to for more than a decade as “Human Capital.” I’ve seen the past 15 years of hype regarding “The War for Talent,” and “Talent Management,” only to recognize that in most organizations the war for talent is still being waged, and is likely to continue perpetually due to age group demographic population trends and the intense competition for a shrinking available labor force. From my 20 years of experience in practitioner leadership roles, followed by almost 20 years as a systems and operations management consulting leader, I believe many organizations “leave money on the table” when it comes to the return-on-theirinvestment in people. And it’s going to get more difficult as available numbers of “talent” (candidates) with specialized skills become scarcer. Increasingly, the world is becoming “flatter” resulting in candidates having real-time visibility to global employer opportunities, and vice versa, which leads to intense competition. The traditional employee/employer/ leadership relationship, and the “9 to 5” workday are becoming history, and the workforce is becoming increasingly contingent, mobile, and remote, often having only temporary, project ties to an organization. It is critical that an organization get the most value out of the talent it has! However, I’ve observed that in many organizations, and for many different reasons, talent hasn’t been utilized effectively; hasn’t been developed effectively; hasn’t been managed and led effectively; hasn’t been retained, and; hasn’t produced or performed at its highest potential level. In short, many organizations don’t receive the highest potential ROI on their investment in their “most important asset – their people,” aka workforce, aka human capital. For most organizations, their costly expenditures on talent management programs and systems, and expenditures on workforce management programs and systems just haven’t led to the promised land of a highly-engaged, optimized, high-performing, highlyretained workforce. And why not? Well, one primary reason which many of you have heard ad nauseum is that – “it’s not about technology.” Technology is

January 2016 • Workforce Solutions Review • www.ihrim.org

simply an enabler. It doesn’t cure all of the “sins” of an organization. The main reason why most organizations fail to realize the highest return on their people is that talent as acquired only represents talent potential, and must become fully actualized to apply its specific set of capabilities and skills to realize maximum productive result. “Talent” (employees) must be oriented to the organization and understand its true role and role expectations. Employees must know in what direction the organization is going and understand how its role and work-unit support that direction. They must have access to the proper training and organizational knowledge resources, tools, and systems to support the company’s specific role. They must be given quantifiable goals and objectives that align with and contribute to the organizational mission. They must be provided an environment that recognizes, supports, and facilitates its unique ability to contribute to its full capability, and; must be measured on an ongoing basis to ensure their productivity and performance is in line with expectations. In short . . . talent potential must be Led, Nurtured, and Managed to become fully actualized and contribute maximum expected value. We’ve witnessed many studies that cite low engagement levels, and the fact that good talent quickly leaves for greener pastures when this isn’t happening in their organization. We’ve all heard the adage that “employees join an organization, but leave their manager.” With all of the various demands placed on operational leaders at all levels just to be able to manage their functional/operational accountabilities, proper management of the people asset often gets the short shrift. And it’s no wonder why. And please, I do realize there are many wonderful exceptions regarding organizations where this isn’t the case, and the opposite is true. And this is where the critical need arises for HR to rise up and grasp their greatest opportunity to help their organization. Thus, it is more critical than ever before for HR to take the lead in what I believe to be two critical areas of organizational need; two areas where only the HR function can truly and effectively have holistic, enterprise accountability to help build a higher-performing organization. These two areas are: 1) Workforce Effectiveness, and; 2) Innovation.

Workforce Effectiveness It’s almost impossible for even great leaders to keep an eye on the operational “ball” while simultaneously giving sufficient time to each of their team

members to properly develop them and manage their productivity, performance, and growth. Often, the people management role responsibility becomes the proverbial once-per-year performance review, done in a perfunctory manner to keep HR off his/her back. This is insufficient to get the most return from the people asset. But how do we help managers even determine why, where, or with whom they are losing talent productivity, performance, and capacity? This is where HR can come to the rescue. There is a critical need for somebody to focus at all levels on “team” leadership and team performance. By “team,” I mean every discrete organizational unit with a leader who has responsibility for a specific unit’s performance. I’ve been preaching over the past 10-plus years my belief that American businesses in general lose easily up to 20 percent of their productive capacity through a variety of leakage points, some of the most glaring being: • • •

•

The right person in the wrong role; Not challenging or allowing workers to practice to their full capabilities and potential; Lack of full utilization of productive talent capacity due to improper or unplanned scheduling of talent to projects and tasks; Not measuring team and individual performance and productivity on a very frequent, regular basis to ensure that attainment of weekly if not daily objectives and expectations are being met; Not identifying gaps in talent and productivity due to lack of available resources, downtime; or, Ineffective scheduling to be able to ensure maximum work unit productive output ... etc.

In my mind, middle management is often the weakest, and in some cases, the missing link in the leadership continuum from the C-suite to the line worker. And in many cases it’s no wonder why. HR leaders, if they choose to grab this opportunity, are the appropriate functional group to focus on measuring, monitoring, and generally overseeing the total output of an organization’s talent pool – its workforce. Many might disagree, but unless some central resource with visibility to all aspects of the human asset takes accountability for ensuring that that asset is being managed properly, fully utilized and developed for further growth, then it just won’t get done consistently across the organization. One might call this group the “Workforce Effectiveness” group. I’d bet most organizations would take significant steps toward sustainable profitability and competitiveness. This becomes a “net de facto increase in head count, staffing, and capacity” if leaders and managers were more fully and effectively able to manage the talent already on board. I’ll bet you agree. This is where HR comes in. HR and Operations’ leadership must combine

forces to monitor more closely the impact of the workforce, as well as line management, on operational productivity and performance. That means that instead of “simply” providing performance management tools to managers for individual workers, HR and Operations leaders combine operational productivity and cost data, with workforce proReferences ductivity and cost data, at all organizational Learn more at http://innovationone.us/ unit levels, to be analyzed and correlated with each operational leader and employee. Related Publication: Innovation Nation? Innovation Health Inside the Fortune 1000 Workforce data and analytics, correlated with Operational data and analytics, is capable of providing a full and accurate picture of how effectively and fully an organization is managing its workforce. It is capable of managing actual productivity results and costs to expected results, and cost across any organizational dimension. It isn’t sufficient for HR to just be measured on number of hires, time-to-hire, cost-of-hire, etc. The true measure of HR’s effectiveness has to be the quality-of-hire, the retention of hires, and the return-on- investment in the workforce it has helped procure and develop. The ability to monitor and manage people and operations from the individual, to the work unit or project team, to the department, to the group, to the divisional level is quite direct and simple once in place. This must be done to be able to identify where there are relative imbalances in productivity and performance with both individual employees, and within and across supervisors, managers, all leaders, and all organizational work units. This is the only way to get a full picture and correlation of the relative effectiveness of management in managing their people asset, and the return on same. I believe that HR should take the lead on this initiative.

Culture of Innovation The second major area of opportunity for HR to grasp is that of Innovation, more specifically, creating and maintaining a Culture of Innovation. You might be asking “What does HR have to do with innovation?” Well, simply – Everything! When thinking about the word Innovation and organizations perceived to be truly innovative, most people only see and focus on the end result – the bringing to market of a revolutionary or uniquely new product or service. But that’s only the “tip of the iceberg.” Being innovative doesn’t happen by chance in a vacuum. And it isn’t coincidence that companies, organizations, and “Yes!” even individuals that appear to produce a steady stream of new and leading products, services, ideas, thoughts, performance results, etc., are able to do so. Much of innovation is about people, and getting the most out of the people asset! Although many employees and organization members are creative, their great ideas, enthusiasm, and passion often don’t see the light of day due to internal organizational or personal barriers. The challenge is how to capture and apply these traits and transition from occasional, random, short-term gains www.ihrim.org • Workforce Solutions Review • January 2016

to a long-term environment, which continuously and systematically unleashes the full potential of all employees, and drives employee engagement, purpose, and ongoing business value. We’ve all witnessed the unrealized promises for many organizations of all the hype surrounding the talent management craze over the past 10 years. We’ve all read about, and likely inherently believed that highly-engaged employees are more motivated and productive than those not as engaged. But engagement in itself is too narrow a focus. This is where HR comes in. Innovation is all about creating new value – both internal and external to the organization, value which is recognized by the marketplace or helps the organization to be more effective and efficient. Innovation is considered to be an enterprise-level initiative – that is to say – from including the development of new products and services, to awareness of the competiAbout the Author tive environment and customer/stakeholder Ed Colby is a partner in interactions, to structure and processes in InnovationOne.US. He is an organization. So, from an organizational a Human Capital perspective, it’s a culture… the way employees Management (HCM) and think and act about innovation and do things Workforce Management differently. Culture is measurable – there’s (WFM) strategic consultant and technology evangelist, having been both been much work done in terms of metrics to measure general culture in organizations. an educator and student of management, technology, and leading Innovation is much more than measuring and organizational practices for over 35 cultivating employee engagement. years. His professional passion is A Culture of Innovation is a holistic manhelping build higher-performing agement approach that measures, creates, organizations by optimizing the and manages internal and external value for: effectiveness of people, process, individuals; work units; product and project information, and technology. He has teams; organizational units; and organizaheld senior leadership roles in management and solutions consulting, tions. It involves creating an internal organiprofessional services, value analysis, zational environment and planned, systemic and marketing for several leading-edge approach to generating new ideas regarding: HCM and WFM technology providers. As products; projects; systems, services and a practitioner, he has led large processes; communication; and organizational operational consulting and systems development groups across a variety of design and leadership. In short, it’s a new way of doing busiindustries. Colby has been an active member of IHRIM for nearly 20 years, ness. Innovation involves a focus on the serving on the editorial boards of both creation and management of an environment IHRIM.link and Workforce Solutions that aligns vision to purpose, and facilitates Review (WSR) journals, and was knowledge-sharing and organizational learnmanaging editor of WSR. He has also ing. It unleashes creative potential, aligns served on IHRIM’s Professional resources, and facilitates full utilization and Development Committee; board of actualization of all assets to maximum value, directors, IHRIM New England Chapter, and Content Committee Chair, Annual in particular an organization’s most imporInternational Conference. He is a tant asset – its people! Innovation requires a Charter Advisory Board Member of The planned, systemic philosophy, organization Institute for Human Resources WFM environment, and governance system that Certification Program and past member nurtures and manages new ideas from concepof the Advisory Board for the WFM tion, to fruition and use on a consistent and Learning Community of The Human reliable basis. It is an intangible philosophical Capital Institute (HCI). He is a frequent presenter at industry events, and holds management approach, with tangible chara MBA in Marketing and Computer acteristics and financial results. Innovation Sciences from Northeastern University unleashes individual, project team, work unit, and a B.S. degree from Tufts University. and organizational resources to their fullest He can be reached at potential and effectiveness. edcolby@innovationone.us. Innovation and creation of a Culture of

January 2016 • Workforce Solutions Review • www.ihrim.org

Innovation have four key components, as shown in the InnonvationOne Cultural Health Index graphical model below: Leadership, Resources, Knowledge Management, and Process Execution.

InnovationOne Innovation Cultural Health Index Model

Every One of These Components is all about creating a work environment that unleashes and empowers the skills, talents, and creativity of the people asset! It’s all about the culture – and culture is established and reinforced by the leadership – through what they say, how they act, and how they support it – through management control and performance management systems – through knowledge management and cross-organizational sharing of knowledge and information.

Organizations become innovative through their employees! The key to innovation resides in leadership’s ability to define, instill and reinforce a culture of innovation and ideation in their organization. A culture of innovation flourishes under the right circumstances, when leaders: • Inspire purpose, vision and strategic focus; •

Broadly disseminate intimate knowledge of customer wants and needs;

•

Facilitate free exchange of ideas among employees;

•

Create planned surfacing of innovative solutions and quickly decide among alternatives; and, Align the organization to deliver solutions to customers

•

The end result is a sustainable, higher-performing individual, group, and organization. Now doesn’t this sound like something for which HR should be the enterprise owner and champion? Human Resources taking a lead role in creating a Culture of Innovation is a critical organizational need. It’s a new management discipline that along with their lead in overseeing Workforce Effectiveness will help facilitate a higher-performing workforce and organization, and lead to a higher return-on-the-investment in the people asset, taking it to the next level of sustainable competitiveness. It will also help HR cement their true value-add to an organization.

People, Process, and Technology By Freddye Silverman, Silver Bullet Solutions For the last several years, I’ve been a member of the Workforce Solutions Review Editorial Committee. As my term ends, I’ve been asked to reflect on the changes I’ve seen in the “Business of HR” during my time as an editor. After a few decades in this field, I’d approach that topic in the same terms as we all do in our work – the three-legged stool of people, process, and technology. So, let’s look at the most obvious of the three, first in terms of change. The pace and impact of technology has been increasing geometrically every year and we have to look well beyond the systems that are geared toward HR to fully measure that evolution. Internet platform collaboration tools, the world of social networks, the ubiquitous smartphone – none of these were developed with the HR market in mind, yet all of them have drastically changed how we work in more ways than actual HR-focused systems ever have. We could always collaborate with co-workers but not without working through some rather forbidding logistics. The issues of time, distance, and access have virtually disappeared, for good or ill. Many employees are now “on or available” 24/7 or something close to that and the expectation of an immediate response to any type of communication is part of the deal. The vast majority of us have become instant gratification junkies. The technology market is truly fascinating because it now includes not just those providers who are geared to the HR market but many “incidental” providers as well. LinkedIn, known to some as “the HR vendor who never intended to be one,” is now the number one candidate source for many recruiters. eHarmony is also getting into the game – if they can match up potential spouses behaviorally, odds are they can be equally successful matching up managers with potential employees. Wearable technology, originally

geared to the individual consumer, is now squarely in the business-to-business (B2B) arena – FitBit is now an integral part of many corporate wellness programs and expects that segment to be a major revenue producer in a very short time. Human Resources departments have learned to use technology to their advantage to improve the business of HR, especially in the area of recruiting. A major financial services firm, to appeal to millennials, has released a series of 10-second Snapchat advertisements targeted at college students. A large manufacturer is using Oculus Rift, a virtual reality headset, at college campuses to allow students to take a virtual tour of the company in order to entice them to apply for employment. Human Resources Additionally, the technology market has become more active than departments have learned it has ever been. Market entry for a to use technology to their product is easier and cheaper on the advantage to improve the Internet platform from a development perspective, as well as marketbusiness of HR, especially ing and distribution. Not surprisin the area of recruiting. ingly, there has been a continuous flood of new entries, both core and point systems, over the last decade. Market observers have been waiting for a shakeout, especially in the recruiting area, expecting a few companies to start buying all the pieces of the software puzzle and forming recruiting management suites, similar to what occurred in the talent management arena in the past. So far, we’re still waiting…but stay tuned. The other major shift in the market has been away from the large/jumbo market and towards the small/mid-size business (SMB). Thanks to the Internet platform, the SMB base has been enjoying a full selection of providers with great functionality at very palatable cost points, something that was sorely lacking in the past. Too much of a good thing can also be a challenge though. In some areas, the market is so glutted that it’s very difficult www.ihrim.org • Workforce Solutions Review • January 2016

to figure out the differentiators and make a solid selection decision. The most surprising thing to me in technology is not the amount of change, but rather the lack of it in the large core market. Workday has had an unprecedented run as the market leader in the large market, practically unchallenged for many years due to Oracle and SAP ignoring the potential of Software-as-a-Service (SaaS) for far too long and still struggling to navigate through the wake of Workday’s success. While the SMB marketplace is overflowing with new entries every year, the large core market seems frozen by comparison, not in functionality development, but rather in terms of viable new competitors. The good news is that technology in HR is now everyone’s business, not just the responsibility of a human resources information system (HRIS) department or the Excel guru who’s been doing compensation spreadsheets for umpteen years. The consumerization of technology has made our clients – those hundreds of millions of employees who keep the wheels turning – very savvy and, consequently, very demanding. That will About the Author continue to spur technological Freddye L. Silverman is an independent advancement, particularly in consultant and principal of Silver Bullet HR where any given process Solutions who has been in the HRIS field can impact every employee. since 1986. Prior to this she was the vice president, Eastern Region of Jeitosa So much for the first leg of Group, a global HR technology consulting the stool – what about people firm and provided client services, including Workday and process? In these two project management and change management. As a cases, the more things change, practitioner with several international corporations, she was responsible for strategic planning and oversight of the more they stay the same. all global HR systems and the U.S. payroll system. She Processes can be far less laboralso had oversight of the design and development of HR and paper-intensive, thanks Service Centers and managed HRIS outsourcing to configurable systems and relationships. Ms. Silverman has been actively involved digital storage, but they still in the International Association for Human Resource Information Management (IHRIM) since 1986, serving as have to be designed optimally chapter president, Association board member and for a company’s business president of the International Association. She is a and should be continuously frequent presenter at industry events and since 2008 monitored for improvement. has been the executive director of the HR Technology Solutions Network for Executive Networks. Silverman Process designs should take has a B.A. in Spanish from Adelphi University, a Master’s advantage of the available degree in Education from Towson University and taught technology features and satisfy Spanish at the secondary and university level before internal business requiremaking a career change into I.T. She can be reached at freddye.silverman@mysilverbulletsolutions.com. ments in order to be considered a success. That shouldn’t be news to anyone. What

January 2016 • Workforce Solutions Review • www.ihrim.org

has changed is the tool kit we now have that enables speedy and effective process design – which leads us right back to the connection to technology. And what about the people factor? To my mind, probably the least has changed here. Let’s start with the basics: Human Resources systems typically drive pay, benefits, and everything else that touches human capital. Regardless of technological advances or platforms, we still need smart, detail-oriented problem solvers as owners/ guardians of those systems. Moving up the value chain, we’re still struggling with analytics. The mechanical tools to slice and dice the data are out there, but the true value-add of any reporting, from the simplest list to the most complex predictive analytics output, is that indispensable human who can connect the business dots and interpret the story the data tells. Whether we were busily downloading from a mainframe and massaging Excel data up the wazoo, or are now simply pushing a button and producing a beautiful red/yellow/green trend analysis, we still need those people who can convert data into meaningful and actionable information. One other people-related issue that hasn’t changed, despite the claims of SaaS evangelists and salespeople, is the decreased need for internal IT support with SaaS systems. What they’re selling is a half-truth – while a company will have less need for internal IT support, they will still need that IT support, but will be paying their vendor or a vendor partner for it. Newer technologies are complex and require intensive and ongoing training and exposure. Integration specialists come at a premium, especially those with Web services experience. So much for a cost-savings high-five – instead, it’s just a budget shift to pay an outside provider for ongoing support. Regardless of whether there is has been great change in some areas of the people/ process/technology link and not so much in others, the dynamic nature of the Business of HR makes it interesting and constantly challenging. One can only imagine what a similar five-year lookback will contain in 2020, when the year itself implies that it will be done with perfect vision!

The Rise of the Purpose-Oriented Workforce By Aaron Hurst, Imperative

Executive Summary Two years ago, I co-founded Imperative as a platform for individuals to manage a career rich in purpose and a resource for employers to attract and retain Purpose-Oriented workers. Across all sectors—from enterprise clients to startups and non-profits—we began to see trends pointing towards certain traits and attitudes held by individuals high in purpose. We also observed that these qualities were linked to overall wellbeing and performance. We wanted to quantify the trends we were observing through our work with individual employers. With over two decades of workplace psychology research to guide us, Imperative partnered with New York University to develop and implement the first ever national survey on the state of purpose at work: The Workforce Purpose Index (WPI). In fall of 2015 we published a report on the findings of the WPI. The following is a summary of the most striking results and subsequent conclusions drawn from the report, along with recommendations for HR leaders across the country and globe.

Profile of a Purpose-Oriented Worker Some might suggest that in order to have “purpose” in your work, you need to have a vocation—to be, for instance, a teacher or an artist. This is perhaps the biggest myth about purpose at work. Purpose does not come from a job title or field. Being Purpose-Oriented means that you view work as inherently about making an impact—whether you’re serving coffee or serving patients. According to the results of the Workplace Purpose Index, 28% of the U.S. workforce is PurposeOriented. While Purpose-Oriented workers are more highly represented in education and nonprofits, they are present across all industries including biotech, retail and manufacturing. Just as purpose is not limited by job title, it is also not exclusive or for the privileged few. Income has no bearing on whether someone is PurposeOriented. In fact we found through the WPI that “measuring Purpose-Oriented Work orientation provides a measure of the workforce that is not biased against traditionally marginalized members of the workforce. Women and individuals over 55

are more likely to be Purpose-Oriented worker,” (WPI, p.10).

Purpose Is Not Generational One of the most surprising facts the Index unearthed is that workers over 55 are the most likely to be Purpose-Oriented. This proves that while millennials might be the focus of discussions around purpose at work, anyone can be PurposeOriented. Trends related to the rising Purpose Economy— non-traditional work weeks, rise in freelancing, peer-to-peer marketplaces—are often associated with millennials as these trends emerged in parallel with this generation’s coming of age in the workforce. While millennials might get the credit (or blame) for disrupting traditional work, the demand for purpose at work is driven by the needs of every age group.

State vs. Stage Work-orientation is an invaluable metric as it is based on the inherent disposition of your employees. It is not dependent on external factors such as company perks or overall culture. Our orientation towards work has been proven to hold steady throughout our career, meaning that a Purpose-Oriented recruit today will continue to be a Purpose-Oriented employee in the future. Work-orientation is a trait based on psychological factors, not a state based on one’s mood or current job. Though our self-awareness and work goals evolve throughout our career, studies show that our underlying orientation towards work is

www.ihrim.org • Workforce Solutions Review • January 2016

developed during adolescence—well before many people have even joined the workforce. A Purpose-Oriented worker might be unhappy in their current role, but they are more likely to take steps to tailor their job to fit their purpose needs. Someone who views his or her job as a stepping stone or merely a paycheck is less likely to be proactive in this way. At the end of the day, who do you want setting the tone of your company culture?

Why Should HR Care about Purpose-Oriented Workers? In our work with organizations, we’ve seen that Purpose-Oriented workers are higher performers, more loyal to their companies, and have longer tenure than their peers. These correlations are consistent across the U.S. workforce. When compared with their peers, Purpose-Oriented workers outperform on every measure: “20% longer expected tenure, 50% more likely to be in leadership positions, 47% more likely to be promoters of their employers, 64% higher levels of fulfillment in their work” (WPI). These numbers lead us to a critical conclusion: purpose and employee well-being are not just about a warm, fuzzy feeling—they affect the bottom line. Higher tenure means lower costs About the Author associated with turnover. Higher level of Aaron Hurst is the CEO fulfillment means more motivated, enof Imperative, a B Corp gaged employees. Purpose-Oriented people advocating for want their work to be meaningful, rather Purpose-Oriented Workers and than a necessary evil. For HR, this means supporting the organizations that investing more time helping people build a embrace them. He is the author of The fulfilling career and less time serving as a Purpose Economy (2014) and a regular complaints desk. advisor and thought partner for many HR and management presently spend global brands. He is also the founder disproportionate amounts of time a) supand an active advisor to the Taproot Foundation where he was the catalyst porting ladder climbers who see work as a and lead architect of the $15 billion pro means of prestige, and b) problem-solving bono service market. He can be reached at aaron@imperative.com.

January 2016 • Workforce Solutions Review • www.ihrim.org

issues created by those who see work as a necessary evil. “Status-oriented” and “money-oriented” workers make up 72% of the workforce and too often eclipse their Purpose-Oriented peers. However, the tides are turning. The percentage of Purpose-Oriented workers is growing and they are seeking more out of their careers. More and more companies are beginning to sit up and take notice. As outlined in The Purpose Economy (2014), purpose is the next big driver of the economy. It’s what people want in their careers. The companies that recognize this need and deliver on it will hold the competitive edge. As more companies see the high returns of their Purpose-Oriented workers, we foresee the new talent war based on targeting this group. Now is the time to redirect recruiting and management towards attracting and empowering your PurposeOriented employees.

Where Do We Go From Here? Our Recommendations: Building a work-orientation screener into your hiring process can help you quickly identify your highest potential Purpose-Oriented hires. Another recruitment strategy borrowed from Google’s playbook is to lean on Purpose-Oriented people already in your organization and ask them for referrals. After all, Purpose-Oriented workers are already your company’s biggest champions, and they want to work with supportive, similarly oriented people. Along with refocusing recruitment on attracting this talent, employers and managers can empower current employees by tailoring their work to build strong relationships, make a meaningful impact, and grow personally and professionally. Once your company builds a reputation for empowering and promoting Purpose-Oriented individuals, they’ll flock to you like bees to honey, raising the caliber of your applicant pool. For a full list of our recommendations on fostering and empowering Purpose-Oriented employees, see the Workforce Purpose Index. For our part, Imperative is committed to sponsor the Workforce Purpose Index and present the results as an annual measurement and profile of purpose in the workforce. We will continue to help organizations transform into PurposeOriented employers. We are also partnering with universities to explore ways to increase the overall percentage of Purpose-Oriented workers in the workforce.

The Strategic Advantage of HCM Technology –

The Ability to take Business-Relevant Action with Human Capital information By Jacqueline Kuhn, HRchitect

Today, technology is available to just about anyone, anywhere, and at any time. Many people get up in the morning, check their smartphone to get the day’s weather, or Facebook updates before they even get out of bed. However, many companies today state: “We value innovation,” or “Our culture is engaging,” or even “Our products leverage the best technology in the industry” – but when it comes to human capital processes, employees have better technology in their pockets and at home than they are using at work. As human resources professionals, we are constantly hearing that HR needs to be a strategic business partner. However, today, while many chief human resource officers (CHRO) have a seat at the CEO’s table, they are not the first person the CEO will turn to when looking to make business decisions. In fact, many chief financial officers (CFO) and chief information officers (CIO) are consulted before the CHRO. Why is this? It’s because they provided information that can be used to take “businessrelevant action” and provide solutions that drive the business. Why then is the CHRO not able to provide this same information? It’s because the systems in use are not capable of producing this type of information.

The Technology of the 20th Century The arrival of the first HR software in the 1970s and 1980s were designed with compliance in mind for use by “personnel administrators.” In the U.S. particularly, labor regulations drove much of the need for these systems. Some examples of systems of this era are Management Science America (MSA), McCormick & Dodge, Infinium, Tesseract, Integral, and Spectrum HR (now Epicor). These early era HR systems were not designed to generate business-relevant information, other

than to support transactional actions to capture information about employees. Organizations today that are still using these applications (and yes, they are still in use) cannot be strategic in their use of information, as these systems just cannot support them. The next generation of systems in the 1990s were created when technology advancements made it possible for client’s personal computers to provide better presentation of information, and distributed processing capabilities gave rise to the “client-server” technology stack. These systems were designed with “ease-of-use” and the promise of “self-service” for managers and employees. Additionally, with the year 2000 (Y2K) approaching, the older systems needed significant upgrading to be able to accommodate a year beginning with 2000, thus many investments in these newer technologies were due to the Y2K crisis. Examples of systems of this era, all of which are in use today, are PeopleSoft, Oracle EBS, SAP ERP, Cyborg, Ascentis, and PDS. These systems were not designed to generate business-relevant information. Although reporting capabilities, compared to predecessors, were vastly improved, organizations still using these applications currently cannot be strategic in their use of information without other supporting technologies, such as a data warehouse or additional analytic tools.

The Technology of the 21st century In the early 2000s, the Web became the preferred method of user interface. The existing human capital management (HCM) systems leveraged the Web as part of their client server architecture, but aside from point solutions, there was very little true new cloud technology for HCM. New cloud technology was primarily focused in what we now call talent management, with recruiting systems (Taleo, iCIMS) and performance www.ihrim.org • Workforce Solutions Review • January 2016

management (SuccessFactors, Softscape) leading the way. The first cloud payroll system became available in 2003 when Ultimate Software moved their Ultipro payroll to the cloud. In 2007, Workday marketing put cloud computing for HR on the map. The ability to access information anywhere and from any device required the 21st-century HCM application to be built with the consumer in mind, and the newer systems were being built as business systems. Today, the cloud is the preferred method of delivery of technology, with mobile capabilities a standard requirement not a luxury item. Additionally, with the advent of “Big Data” and “Predictive Analytics,” these 21st-century systems are built to provide information for taking businessrelevant action.

Strategic Value Progression In order to take advantage of the 21st-century capabilities of the HCM application, the HR function must progress through a series of steps that will enable it to use the information to take business-relevant action. It starts with process automation, then front line efficiency, engagement, and finally the ability to take businessrelevant action.

Process Automation This is defined as automating within the HCM application all human resources processes. It must be understood that this is a necessary foundational component to becoming strategic in the use of data. Any process that relies on spreadsheets and word documents external from the core HCM systems cannot be used for strategic decision-making. While foundational, the automation of processes only benefits the human resources function, as it is essentially taking what HR is doing manually and using an HCM system instead.

Front-Line Efficiency This is described as providing direct access to managers and employees to obtain the information they need in a more efficient manner. It has long been understood that information captured

January 2016 • Workforce Solutions Review • www.ihrim.org

at the source is the most reliable. This is the value of direct access for managers and employees. However, in order for this to work, it requires the HCM processes to truly be “end-to-end” from within the tools being used. As a rung on the ladder building up to being strategic, this step moves the organization to a place where the system and processes are now benefitting managers and employees, as well as HR.

Engagement Engagement is defined as creating a workplace where employees are committed to the organization’s goals and values, and are motivated to contribute to organizational success while enhancing their own sense of well-being. Many studies have shown how employee engagement is tied to company performance. This requires tools that allow for direct access to communication, collaboration, and development opportunities. Mobile technology is a key driver for engagement. When engagement is fostered through HCM tools, the benefits are to the company overall, in addition to managers, employees, and HR.

Business-Relevant Action Business-relevant action is defined as using information to take action that has a bearing on, or connection with, business drivers. This is characterized by providing insight for decision-making based on previous history and/or predictive outcomes. This strategic level of use of information is only achievable with the 21st-century technologies, which are capable of merging people data, financial data, and operational data and displaying it in easy-to-consume ways. What is really meant by taking business-relevant action? Let’s examine a few case studies: The first is Sample Company, a manufacturing firm whose greatest people-related business issue is the high cost of overtime. Sample Company’s HR department spent time analyzing who is receiving overtime, where it is occurring, and why it is occurring. They discovered the highest overtime is among technicians certified in using a specialty piece of equipment. Looking further, it was found the scheduling is done by job position, not the person. Employees can perform more than one job on a schedule. Some certified technicians are not fully scheduled and supervisors do not know who is certified. Additionally, the existing system only allowed the

schedules to be created by job and, thus, there was no visibility to what an employee was scheduled for overall until all jobs were scheduled. With a new system that allows for end-to-end processes that provide information on employee certification, scheduling on all equipment, overtime alerts, and proactive suggestions to reduce overtime, supervisors are able to create work schedules that optimize employee capabilities. In doing so, Sample Company was able to reduce overtime by about 65 percent. The second is Sample Company 2, a 70-yearold global consumer goods organization owned by a holding company that wanted to spin it off. However, with lagging sales and low employee engagement, this was not achievable in its current state. A new CHRO was brought in to transform the company. In the first year, the organization achieved process automation by eliminating manual processes and putting in place a global HCM. Not only could they obtain a global head count in days instead of weeks, it also provided the foundation needed for global talent management. In year two, front-line efficiency was achieved by implementing direct access and removing layers of approval required to complete people processes. Also in year two, increased engagement was achieved by adding communication tools, collaboration tools, as well as a manager engagement tool kit. At the end of the year, employee engagement increased by over 30 percent and, more importantly, disengagement decreased by over 70 percent. In year three, the company successfully completed an IPO and became independent of the holding company. In year four, business-relevant actions were

taken using global information. It was discovered that the best talent was concentrated in a few locations and not leveraged properly across the organization. Locations that were not highperforming were lacking key individuals. Through a mix of employee transfers and external hires, the underperforming locations increased their performance. Another key business action took place as a result of having access to information. Each operating unit had an HR team dedicated to that unit. The cost was incurred by the operating unit, not headquarters HR. The operating unit leaders realized that with the direct access to information, new communication and collaboration tools, they could consolidate their HR teams into a centralized support center without losing any service levels. This consolidation saved millions in operating costs, making each unit more profitable. By year five, this companyâ&#x20AC;&#x2122;s success at generating top-line growth and profit margins led to the sale of the company at double the IPO price. While one cannot claim that this success was entirely due to the strategic use of HCM information, it could not have happened without it. Being strategic as a CHRO or About the Author HR business partner depends on Jacqueline Kuhn is EVP of HCM having access to information that Consulting Services at assists business leaders with makHRchitect. She is an HR ing decisions. The extent to which professional with over 25 years of experience in strategic HCM systems can provide inforplanning, systems management, project mation will directly impact the management, change management, services ability of HR to truly be strategic delivery, and general human resources. She is partners. Companies that are using also a Certified Professional of Human Resource 20th-century HCM applications will Information (HRIP). She is a past chair of the continue to struggle in taking that IHRIM board, founder of the HRIM Foundation, and currently serving as vice president of the next leap to being strategic. HRIM Foundation. She can be reached at jkuhn@hrchitect.com.

www.ihrim.org â&#x20AC;˘ Workforce Solutions Review â&#x20AC;˘ January 2016

Making Health Benefits Smarter:

How Personalized Health Benefits Bring Cost-Savings By Johnathan Hodge, Jiff The job of a company’s health benefits manager used to be straightforward: provide the most comprehensive employee benefits for the least amount of money. Today, administrators face the same basic problem, but it’s become far more complicated. As costs continue to rise, benefits managers have come to realize that they are paying too much for employee health care — north of $620 billion a year — and getting too little for it. But unlike their counterparts of just a decade ago, benefits managers today have many opportunities to provide new benefits that reduce costs. The challenge now is how to effectively manage all of these options individually and collectively. The solution? Make health benefits smarter. Today, technology is changing the way doctors, patients, insurers, and plan sponsors connect like never before. The number of available digital health care apps has exploded, reaching 165,000 this year. Wearable devices are also growing in popularity. New services make it possible for patients to find the right doctor at the right time to address their health needs virtually, without ever setting foot in a medical office. For employers, this means an entirely new set of tools they can use to take aim at health care cost drivers. But it also means a new set of challenges. While the value and number of health benefits being offered has increased, employees aren’t using them. Most large companies offer dozens of benefits to employees, but that also means dozens of logins and passwords, incentives they have to keep track of, and goals to work toward. For your everyday employee, it’s all noise and no signal; it’s a lot of work to even figure out what benefits or incentives will actually help them meet their health goals. The result: inaction, which leaves most of the value for the employer on the table. The solution is to make benefits smarter. There are several ways to do this — including seamlessly integrating benefits, providing real-time data on what’s working, and using design to inspire action — but the way to connect employees with the benefits that work for them is to personalize them. Although the technology to make highly personal-

January 2016 • Workforce Solutions Review • www.ihrim.org

ized experiences is relatively new, the reasoning is not; marketers have long understood the power of personalization. People respond better to messages and messengers that speak to their unique situation. We can apply this principle to employee health benefits. To do so effectively, there are two key steps. First, the right employees should be connected with the right benefits at the right time. Second, employees should receive targeted information that helps them become active participants in their benefits programs. By seizing both of these opportunities, employers can get the most out of their health benefits investment.

A Data Foundation How does Netflix know to recommend to us the next TV show we want to binge-watch? The answer begins with data. When we interact with any digital service, we create a trail of data, or “digital exhaust,” that reveals our behaviors, motivations, and preferences. That data builds the critical foundation for personalized services. An employer already has some of the data that could be used to create personalized health benefits recommendations, such as benefits eligibility information, plan choice, coverage tier, and family composition. If an employer integrates a health app or wearable, that information can be combined with the digital exhaust created by use of the app to provide a highly customized experience to the employee. The employer also benefits by receiving anonymized information about which digital services are helping the overall employee population reach their health goals. Add to that population health data on attitudes, goals, and demographics, and the data begins to paint a clearer picture of what health benefits will help them save money.

Recommendation Engine With that picture established, employers can then deliver the right solution to the right employee at the right time. For example, a 35-yearold athletic mother-to-be has much different needs than a 55-year-old smoker at risk for heart

disease. And accordingly, they should participate in different types of employee health programs. Benefits that make sense for each of those employees today might not make sense at another time; the “right benefit” depends on the situation. For example, in three years that same mother-tobe is 38 and a mother of two. The “right” programs for her have changed, as have the actions she should take to stay healthy.

based on their actions; and it learns About the Author from the rest of the world. Billions, As EVP of Product, Johnathan if not trillions, of A/B tests go into Hodge heads up the Product organization at Jiff. He has optimizing your newsfeed to make it been in analytics-related fun and addictive. product management for over What if health benefits could 10 years — at large enterprises, such as IBM, work like Facebook’s newsfeed? The and at a number of startups, such as Adaytum updates, alerts, events, and new (acquired by Cognos) and Merced Systems (acquired by NICE systems). He can be recommendations employees see reached at jh@jiff.com. are specifically designed for them, and they can share or compare their Engagement Optimization progress with colleagues or those with similar Even the most accurate data or the most pregoals. Taking personalization a step further, cise recommendations will not lead to reduced incentives can be tailored to individuals’ needs health care costs if employees do not use their and motivations, providing the incentive type benefits. While the Affordable Care Act enables and amount to each individual based on dataemployers to offer monetary rewards to employdriven predictions of what it would take to reach a ees for participating in health programs, finandesired outcome. For example, based on the data cial incentives alone do not foster motivation. foundation for “Mark” (and people like him), you To make employees active participants in their can predict that he will try out telemedicine for a health care, another layer of personalization is $5.00 reward. In contrast, we know that “Sally” required. (and people like her), will need $7.00 to try out Think about Facebook’s newsfeed. It is telemedicine services. customized to you based on your friends, your The days of an employee having a one-sizegroups, and your interests. Your newsfeed is fits-all health benefits plan are over. Just as always learning. It learns about you by tracking personalization is reshaping nearly every sector what you click on; it learns from your friends of the economy, it is doing so in health care too. Every employee has individual health 䘀爀攀攀倀攀爀猀漀渀愀氀椀稀愀琀椀漀渀 ∠ 䘀爀攀攀䔀渀最爀愀瘀椀渀最 ∠ ㄀ ⬀ 倀爀漀搀甀挀琀匀琀礀氀攀猀 needs, habits, and goals. As the digital health revolution takes hold, there are hundreds of options available to employers to improve employee health— from apps and wearables, to telemedicine and digital health coaches. Using personalization, employers can effectively manage these options as individualized solutions drive employee engagement. Just as data-driven personalization has been proven to work to change consumer and public behavior; it can change your ∠ ∠ benefits program for 㠀㠀㠀ⴀ㜀㜀㤀ⴀ㠀㠀㌀ ∠ 猀攀爀瘀椀挀攀䀀挀爀礀猀琀愀氀瀀氀甀猀⸀挀漀洀 the better.

䄀眀愀爀搀猀吀爀漀瀀栀椀攀猀䜀椀昀琀猀

www.ihrim.org • Workforce Solutions Review • January 2016

Fostering an Analytic Culture from the Top By Jeff Mills, Tableau

Companies across industries are making more day-to-day decisions and unlocking value with the help of data. From sensor data to website data to sales data, more and more aspects of business are being quantified and analyzed. One side effect has been an increased focus on data scientists, their skills and their roles within companies. But in most organizations, data scientists are but a small subset. Truly fostering a data-driven, analytic culture must go beyond that piece of the puzzle and consider the management of data scientists and beyond— plus training, tools, hiring processes and more across departments. These are all crucial aspects of transitioning to a true analytic culture. And, in most cases, the kind of change that needs to take place must start at the top. Fostering an analytic culture from the top begins with empowerment. A successful analytic culture must be top-down in a very free-flowing and democratic way. ‘Fostering’ as opposed to implementing or forcing is key and means empowering and trusting the workforce to explore and answer their own questions with data. Old school analytics were managed by a centralized team. But it’s up to top leadership to make sure that all members of the organization can now ask their own questions by offering accessible tools, the right training and giving data access (except for the most sensitive information) to the entire company. Self-service analytics is the cornerstone of the self-reliance that underpins a successful analytic culture. The key to successful technology supporting self-service analytics is hiding the underlying complexity of the data. Keep in mind that tools aren’t truly enterprise-ready if all members of the enterprise can’t use them. Having a tool with a subset of people who can use it, use it well and build great things isn’t enough. Similarly, getting all users to be data-driven will more often than not require additional training. Some of this can take place through the actual tools, which tend to offer use cases, online videos and more. Such training tends to

January 2016 • Workforce Solutions Review • www.ihrim.org

focus on features and functionality. But it’s also important to take a wider lens with regards to training. Be sure to build up critical thinking, analytical curiosity and a foundation in relevant fields like data visualization. Bringing in outside experts can help to this end and keep things exciting. With this academic background and general foundation, specific tool training begins to make far more sense. One thing that’s important to note is that, for a lot of organizations (especially ones with very sensitive data), this level of empowerment can feel extremely uncomfortable at first—which brings us back to top leadership. Top leadership must play a key role in moving the company beyond a need-to-know mentality and truly practicing what is being preached, or else it will undermine the entire transition. Acknowledge that empowerment can feel uncomfortable, and then take steps to make it begin to the feel like the norm. To that end, leadership must begin demanding data-driven answers. Instead of asking the opinions of middle management, require data in their answers—and require they ask the same of their respective teams. Answers shouldn’t begin with the words “I think.” Instead, data literacy should be a part of all conversations. Of course, this will only stick if top leadership sets a visible example. All executives should use data every day and must model the analytic process and culture they want. One small but important step to this end is to actually make data a part of all job descriptions so employees across the organization are measured on it. This will make it easier to reward data-driven behavior on a personal level. Another tangible step is to hold a companywide competition with data. These are a great supplement, as they allow for leadership to reward data-driven behavior more globally. Run an internal competition where folks can show off their skills, and make it executive-sponsored and judged. This gets a lot of people involved, puts the tools and training into action and really

puts data at the forefront of the company. While all these initiatives are taking place, leadership must also communicate a focus on the hiring process. Building an analytic culture with existing employees should be supplemented by an ongoing attempt to bring in the culture your organization wants. Data should of course play a role in this process…but keep in mind the ideal candidates are not usually those with the most knowledge of the latest technology. Technical skills are important for some roles, but there is one non-negotiable trait that every team member must have: critical thinking. To look for critical thinking, give all candidates—not just data scientist or data analysts—a data-driven test. The results are almost always quite revealing. The answers show whether the candidate can form questions to ask of their data, whether they have proficiency in answering them, and whether candidates asked followup questions of the data. Curiosity is another intangible that really underscores self-reliance and an analytic culture. One great shortcut to measure a candidate’s curiosity is to ask them how a toilet works. While this may seem like it’s out of left field, it’s

a very telling question! People spend lots of time on toilets. How many people have actually taken the time to wonder and figure out how it works, though? This is also a great question because it’s fair and level for all candidates and can often get them to come out of their shell. Most job seekers come with plenty of canned answers…but few have a canned answer about toilets. This will allow interviewers to get a sense of curiosity and personality – two important facets of any hire and company culture. All in all, implementing an analytic culture is a long-term process — not something that will happen overnight. But trust me when I say that a year from now, your company will have wished that top leadership got started today. Implementing the right technology, teaching everyone in the company how to About the Author use it, and making data a baseline Jeff Mills is Tableau’s director of Analytics. of all conversations are just a few He is tasked with leading a team to build a ways your organization can begin world-class deployment of Tableau inside its walls. He joined Tableau in 2008 as a pushing the ball forward with reproduct consultant helping customers use gards to an analytic culture — and Tableau for the first time. He still gets great satisfaction it all begins at the top.

out of watching someone use Tableau for the first time. He can be found at https://www.linkedin.com/in/vizmills.

Get the most from your talent management strategy with EIR expertise, proven technology and service offerings. EIR is a member of the SAP PartnerEdge program. We are authorized to resell and are a certified implementation partner for SAP SuccessFactors solutions. Learn More Call: 855-589-9451

www.ihrim.org • Workforce Solutions Review • January 2016

Accountability in the Business of HR: “Just What if…” By Dr. Katherine Jones, Mercer

Remember Sarbanes-Oxley? Of course you do. We all remember the debacle caused by fraud in firms such as Enron that led to the passage of the Sarbanes-Oxley Act (fondly known as SOX) in 2002. In part, this action was taken in order to protect investors and to oversee corporate accounting practices. One result was that CEOs and CFOs had to proclaim, via their signatures, that the financial reports were accurate, and they were individually responsible for such attestments. What if — just what if — HR leaders had to sign off on the accomplishment of their divisions for the corporate good? What if accountability for the success of the organization as far as acquiring and maintaining a suitable workforce, ensuring regulatory compliance, and provisioning employees for success via compensation, benefits, and learning opportunities were measured and the HR team held responsible? Now I am not even beginning to suggest that external oversight boards might be created to micromanage HR activity in a company — but just what if the same level of “skin in the game” were required of HR as is today required of the CEO and CFO? With apologies to both Mr. Sarbanes and Mr. Oxley for what is no doubt a superficial spin on the complex 2002 act, let’s look at what a “SOXism” of HR might look like for many HR departments today, given the broad range of responsibilities they hold.

Efficiency If you, as an HR professional, had to grade your department on efficiency today — what would you say? Attesting that the HR systems and procedures in place are creating the value they are intended to might cause some CHROs to shudder. If there are multiple HRIS programs across the globe, or diverse systems and procedures stemming from acquisitions left untouched, or, further, if divisions across the company are allowed to “go rogue” and purchase HR-related software, HR leaders likely cannot operate efficiently. In addition, a raft of disparate software systems very likely means your department cannot glean

January 2016 • Workforce Solutions Review • www.ihrim.org

the value of analytics for business decisions — because the varied data models across multiple programs do not allow for consistent aggregation of data. And, of course, it is not only software that may cause HR to fail to meet its efficiency goals: the procedures and policies in practice may indeed hinder efficiency. Over time, processes that once may have had a purpose become routinized and “set in stone,” even though their original purpose may no longer be required. Redundancy across groups within HR, especially on a worldwide basis, often creates unnecessary duplication of effort, and in some cases, even creates teams working at cross purposes. Recognizing the inefficiency of many layers of management, for example, many companies are flattening the organizational structure, thereby often eliminating layered approval levels, and better empowering employees to make dayto-day decisions. As paperwork moved to computerized “screen-work,” procedures sometimes were accomplished faster, but often the process — whether digital or not — really was inefficient, curtailed productivity, and perhaps didn’t need to be done at all.

Effectiveness You may have given yourself an A+ on efficiency, taking comfort that your global HR runs like the proverbial well-oiled machine — but is it effective? Could you attest that the sum of the policies and procedures in place produce the desired result? Measuring the effectiveness of HR includes a critical look at how the function is organized within the company as a whole. If it is organized into centers (referred to as Centers of Excellence or Centers of Expertise, i.e., “COEs”), consolidating experts with like talent into groups, it is time to measure the effectiveness of those groups regarding their total corporate mission: are they delivering the results intended? However your HR function is organized, it is time to measure its ability to effectively deliver on the results the company requires. If HR is a globally decentralized function, as another example, it is more

likely to be tactical, demonstrating redundant processes, and also unlikely to be perceived as strategic by corporate headquarters. 2015 saw the eruption of one such case in point: the management of performance. Companies reported millions (yes, millions) of hours spent in performance reviews, ratings, and discussions, only to find from research that the effort failed to improve employee performance. In fact, managers reported that the effort often had a negative effect: it caused fear and turmoil in the employee base; it adversely affected engagement, created short-term loss of productivity during the review period, and often led to levels of estrangement such that valuable employees left the company. The conclusion has been that change is needed — and leading companies are often abolishing scores, rankings and ratings, and implementing coaching-based support for the actual improvement of employee performance. In all this, a new measure of what constitutes success may need to be developed. For example, take the learning function — an area that has received more attention in the last two years as the skill gap between retiring professionals and newly hired employees became apparent. Training’s responsibility was to close that gap: develop, usually digitally, methods of upskilling on the job, a radical departure from the traditional – and often ineffective — reliance on formal courses. Studies show that many employees take advantage of only a small percent of coursework available, and those courses are those required for compliance or orientation. The answer in the past was the creation of more courses — that is what trainers know how to do best — rather than rethinking how learning can be integrated more readily and accessibly in the work of the employee.

Economy Recent research showed us how few HR organizations could accurately report what their global workforce actually costs them. While software applications may be better than previously at conveying the costs of filling a job, or recruiting’s spend on a job board, aggregated workforce costs remain elusive. Again, evaluating economical choices and ascertaining the cost of the workforce against corporate peers of like size requires accurate data for analysis. It is critical that HR leadership step up to the task of total workforce cost now, because the nature of that workforce is in flux. Rather than considering the industry cost for a top recruiter or a star cybersecurity manager, today’s leadership has to be able to consider the comparative costs of the increasingly growing

contingent workforce of skilled independents. Staffing projects or departments now require the ability to consider not just outsourcing versus hiring, but also hiring from the pool of free agents. While we will likely revise the traditional definition of “employee” to accommodate this growing trend in employment, HR leadership will have to be able to understand and rationalize the varying costs structures that make up “workforce cost” today. Add to this the need to understand the cost of the infrastructure to manage HR. The rapid rise of cloud solutions changed the cost model from the monolithic on-premise systems, and HR and HRIS professionals, while generally cognizant of the cost-benefit of the model, may increasingly face higher levels of accountability for ensuring the value of infrastructure decisions.

Simplification Let’s make the simplification of work our HR mandate for 2016. Today’s jobs are often complex — really complex — with a plethora of demands (sometimes conflicting) made on the employee. Here is an area with higher level of management can impact most expeditiously. “Plan ahead, senior leadership!” (I know, it sounds simple), but the continual off-core requests that run down the management chain to the underlying team can be very disruptive. While we know there is no “one and done” in business, and executive requests always seem to come out of the blue, we also know that individual contributors will drop everything to meet the request. The result is the conflict of the day job and the request du jour, often leading to increased employee stress, and deadlines unmet. In addition, our always-on work style, touted as easing decision-making through rapid response times, is also a contributor to employee stress as texts, emails, and phone calls are around the clock; employees now have to attempt balance, not between work and life, but between work and work-at-off-hours. Recognizing this, many companies are encouraging employees to go off-grid on holidays and weekends, and to use their vacation time to refresh and re-energize. Think about it: have we created the equivalent of the Dickensian sweatshops with a digitally controlled, 24/7 work model? Furthermore, if an outside analyst (like those independent auditors in the SOX world) looked into your company’s overall practices, would he or she see complexity from redundancy, micromanaging, archaic processes, and burdensome procedures? Take the time in the year ahead to re-aswww.ihrim.org • Workforce Solutions Review • January 2016

sess the degree of complexity that may very likely be affecting corporate productivity and ultimately, shareholder value. Here, the application of design thinking to business processes — looking at the process or task from the employee’s point of view, ideating and trying new solutions fairly quickly to assess viability, fix any issues, and deploy — can facilitate the often-difficult process of developing and introducing changes.

Conclusion In this season of new year’s resolutions, let’s consider the SOX-ism of HR, such that each member of the HR team would agree to sign his or her name to a document attesting to the shareholder value created by team practices. Here is a summary list with which to begin:

The CHRO To-Do List 1. Evaluate the efficacy of your HR software: what can be centralized that is not today? Measure the degrees of redundancy in the HR system, some of which may have stemmed from archaic software, or too many similar applications. As part of that evaluation, assess your readiness to electronically supply the analytics that your executives require. 2. Step back and evaluate your division’s business processes. You may well have totally unnecessary procedures that add unnecessary complexity to the work of HR, to managerial oversight, or to employees themselves. Look also at processes to determine if they can be streamlined for efficiency by eliminating excessive steps or sign-off requirements. Finally, analyze the efficacy of embedded procedures (such as performance management): are the corporate goals being met through the processes followed today? 3.

Analyze your learning library: generally courses are added, rarely deleted. Look at what courses employees take voluntarily, when in their careers they take them, and why. Assess if employees perceive training as a way to improve performance on the

current job or as a step to another position within the organization. And cluttering up the library with duplicate or out-of-date courses makes no sense. Also, while you are at it, consider the fact that a common complaint from employees is their inability to easily locate the courses they actually want to take. Next, develop a plan to deliver training to employees within their actual work environment as opposed to pulling them out of that environment for training. Think “just-in-time, on-the-job” for employee learning – and think mobile. 4. Consider benchmarking the cost of various HR functions against industry; one place to start is with payroll — not just the simple cost of total payroll compared to like companies, but the comparative costs of payroll by function within the organization. Is your R&D payroll cost, for example, higher than the norm? Are you top-heavy with experienced managerial salaries? These kinds of insights are key for fiscal planning for the future. 5. Given the concern with higher turnover rates in today’s economy, consider avoiding employee burnout. Reducing the barrage of electronic communication is one step; encouraging managers to keep communication within the work week is another. Unless we pay employees for a 24/7 work week, we really can’t expect them to work it — and likely we all think our employees should get some sleep. Encourage “offthe-grid” vacations, and urge managers to save communications until the employee’s return. My hypothetical view of accountability with the Sarbanes-Oxley analogy really is not hypothetical at all. These are the issues that HR leadership is and has been responsible for, even if we don’t need to put our signatures on anything. Many more issues face HR leadership; while this is just a start, this to-do list may prove a good beginning for HR in 2016. Happy New Year!

About the Author Dr. Katherine Jones is a partner and director of Research at Mercer in Talent Information Solutions. With both academic and technology industry experience, she has been a high-tech market analyst for 18 years. Her doctoral degree is from Cornell University. She can be reached at Katherine.Jones@mercer.com or @katherine_jones.

January 2016 • Workforce Solutions Review • www.ihrim.org

There are many challenges of implementing analytics in organizations. We know because we work with those very same challenges. But we also know there is great value in learning from people in the field that are actually creating value from their workforce analytics efforts. Join IHRIM and HR tech industry leaders March 1-3, 2016, to explore real-world case studies in workforce analytics. You will have lots of opportunities for networking with your peers to learn from their challenges and successes to see where innovation is happening. In addition, you will learn from practitioners in the field at the educational sessions as opposed to hearing sales pitches from vendor-driven presentations.

TOPICS

WHAT TO BRING

• Building & Leading an Analytics Team

• Your business cards Make important connections at our networking receptions, conversation breaks and interactive sessions.

• Preparing your HR Business Partners for Analytics • Business Cases Solved: Four Industry Cases • Data Visualization Workshop • Solving Data Challenges

WHO SHOULD ATTEND? • CHRO’s & their HR teams • HR analysts • HR systems & analytic students

• Your questions Tackle your real-world problems with peers and our experts. • Your devices Expect experiential learning and extended chat online. • Your team Make the Forum your team retreat to build skill and design your analytics strategy.

SPONSORSHIP OPPORTUNITIES

LOCATION

Every year IHRIM implements ideas suggested by our sponsors. As the industry changes from year to year, the IHRIM Workforce Analytics Forum will help you get ahead of your competitors. See our sponsorship opportunities that are available – we have a price point that meets your needs!

Doubletree by Hilton – Chicago Magnificent Mile 300 E. Ohio Street Chicago, IL 60611 Phone: 312-787-6100 Reservations: 800-222-8733 From the warm and delicious DoubleTree cookie upon arrival, to the authentic Chicago hospitality and contemporary design, this downtown Chicago hotel will leave you with an unforgettable experience.

Join us in the Windy City with your HR teams to understand the types of business problems analytics could help you solve at your organization.

IHRIM’s Human Resource Information Professional (HRIP) Certification Program will help you define, establish and distinguish yourself professionally.

APPROVED

Passing the exam indicates a demonstrated comprehensive understanding and proficiency of the defined body of knowledge in HR information management.

EDUCATION PROVIDER

Intended to recognize individuals who have comprehensive HR technology knowledge, the HRIP credential is an excellent tool to assist in your career progression by:

• Demonstrating your expertise. • Building your credibility. • Distinguishing you as an industry leader. • Expanding your knowledge through recertification.

IHRIM offers a variety of products to help you prepare for the examination. Please visit www.ihrim.org and click on the Certification menu for more information about IHRIM’s HRIP Certification Program or contact us ihrimhrip@ihrim.org.

International Association for Human Resource Information Management