Chapter 7
How We Handled HR Technology and Processes
If the goal of the HR function is to create a strategic advantage, then it can’t let itself get bogged down in transactions; technology is the answer.
Why HR Technology Is a High Priority
Think through when and how much to invest in HR technology.
Historically, HR has done a lot on administrative paperwork. If you are building a new company, then it’s typical to follow that same trajectory, starting with loose manual processes and then gradually formalizing and automating them. From the viewpoint of a CMO of People, whose mission is to drive business impact, the notion of HR doing manual processes is distasteful. We just don’t want to be a department staffed with people who push paper.
In Section 5.1, we argued that you should hire an analytics team before some traditional HR roles. You’ll see much the same thinking when it comes to technology. The CMO of People model leans toward an early investment in technology as part of a sustainable foundation because it’s easy to get trapped in manual work and processes that don’t scale. This trap of manual work will seriously handcuff attempts to have an impact on the business.
Leaning toward early investments in technology shouldn’t be confused with wanting to have all the latest gizmos. I never sought technology that people felt was really cool; I just wanted the basics that would free up my team to do their real work. I had a clear vision of what I wanted the HR organization to be, and then pushed back against tendencies that would take us in the wrong direction—tendencies like putting up with a lot of manual administrative work.
As always, it’s a question of whether a piece of technology is a good investment. However, our executive team didn’t look at return on investment in narrow terms, such as how much headcount some HR technology might save. We looked at how HR technology, or the lack of HR technology, would affect the overall growth trajectory of the business. If recruitment or onboarding technology would help us grow an effective sales force faster, that is where the strategic payoff would be found. If you are a rapidly growing company, you’ll want to lean toward early investment in technology because it will get you where you need to be faster.
What Happens When Technology Is Prioritized
Properly done, technology implementation creates a simple, efficient process. Improperly used, it acts as a constraint that prevents HR from straying into ad hoc, customized, or inefficient solutions. If HR people start doing administrative work, then that’s what they are likely to continue doing. If they start with a clear, straightforward system such that administration is minimized, then they’ll focus on other things.
It’s also true that if you create a process and then try to automate it, chances are that you’ll find your process doesn’t fit very well with how the vendor’s software works. This creates a whole load of extra work as you decide where you can redesign the process and where you need to pay for expensive software customization. That’s another reason to lean toward an early investment in technology.
Implications for Choosing Technology
If one of the purposes of technology is to avoid the trap of manual processes, then the main things you want out of a technology, beyond the basic fit with your requirements, are ease of use and integration.
Ease of use for the customer is part of the design and adoption consideration. It is a priority because people don’t have time to master complex HR software; you should be willing to sacrifice features for ease of use. Again, it comes down to having a clear vision of how the HR function is driving value via an experience that improves productivity and performance. We don’t get overly enamored with HR software because our focus is on the business, not on HR.
Integration is a priority because lack of integration can be a huge time-waster for HR—in fact, it can obliterate any time-savings that the technology would otherwise deliver. You should be willing to pay more if that’s what it takes to get integrated software, or else invest the time to ensure that the points of integration are easily handled. Integration is more complicated than you might imagine because there are many different levels. You can’t simply rely on a vendor’s claim that their software will easily integrate with your other systems. You need to work with an internal or external expert who can advise you just what is involved in integrating two particular systems, what the limitations of the integration are, and how easy it will be to maintain that integration as the different systems are upgraded.
Yet in the End It’s Not About Technology, It’s About Outcomes
Important as it is, HR technology on its own won’t achieve much—you need effective program management and a clear view of the outcomes. In fact, in one case, the performance management software we had was undeniably lousy. We got around this by getting everyone focused on the end results we needed to achieve. The focus was on the outcome, not the tool, and we could admit the tool was poor and then figure out how to best work around it to get the outcomes we all agreed mattered to the business.
To get the benefits of technology, people need how to use it, why to use it, and most of all the business outcomes HR is aiming to achieve. This is easy to say but hard to do because we get sucked so deeply into the details of the technology that it’s hard to look up at the bigger purpose.
Design Perspective
The normal perspective on HR tech focuses on the importance of efficiency, having a single source of truth, and compliance. Those all are important, and to go deeper, a design perspective urges us to lean back and determine the purpose of the technology.
So a design perspective would lead us to ask, “What is the problem the tech is meant to solve?” and “Is it actually solving it?” This perspective would lead to prioritizing measures on how often it is being used (i.e., adoption rate). If it’s online training, then we’d not just want to know that it is available, but also whether it is being used and making employees more productive. Even though you can’t get precise answers to those questions, any indicators are helpful.
Technology, like analytics, tends to draw us into the weeds; we need to make an effort to keep perspective and stay focused on the basic processes that will have an impact on the business. Let’s consider a technology I know well: Docu-Sign. It is a nice technology for cutting back on admin work, but the bigger perspective is that it helps people to sign up faster and hence gets them off the job market and into your firm.
What Can You Do Today?
Consider shifting investment out of some existing HR projects and into technology. Consider what would happen if you accelerated your HR technology roadmap. Could you start eliminating large swaths of low-value transactional work?
How Technology Fits with HR Analytics
We used technology to support HR analytics.
In Chapter 5, I stressed the primacy of HR analytics. In Section 7.1, I argued that HR technology should also be a priority, superseding investment in more traditional HR work. You might expect that this mindset would lead to a highly sophisticated HR analytics technology infrastructure. That isn’t necessarily the case.
The Link Between Technology and Analytics
Core HR technology does two separate things: it enables efficient transactions and it captures data to enable analytics. In implementing technology, one has to ensure that the right data is being captured (and captured accurately).
The right data points toward answers about:
–What is happening?
–Is it important enough to worry about?
–Why is it happening?
–What can I do about it?
For example, it’s typical for a modern applicant tracking system to provide some data on the candidate funnel so that you can see when candidates are dropping out. However, knowing what has happened isn’t enough—you need to know why, and for that you’d need to collect feedback on the candidate experience. Once you know why candidates are dropping out, you are in a position to consider what to do about it.
I had this experience in one organization where we were getting too many candidates dropping out. Each member of the recruiting team had different opinions for the cause of the dropouts. I couldn’t prioritize which opinion to act on in the absence of data. The systems were just managing workflow, not gathering the data I needed for decision-making. Until we fixed the systems to gather candidate experience data, we were just guessing about what changes would help.
In addition to core HR technology that provides data, there are now many tools aimed specifically to help with HR analytics. We didn’t lean heavily on technology to provide advanced analytics. The main point of analytics is to go from a world of no numbers to one with some numbers. We needed to answer questions like, “How long does it take a new sales rep to develop to the point they can hit their quota?” and “How many software engineers will we have by the end of the quarter given our talent pipeline?” Actually, we could be more accurate in framing those questions. We needed to know, “Roughly how long…” and “Approximately how many…” and we would get answers that were close enough for managers to make decisions, not highly precise predictive models. To get rough but adequate answers to these questions, we needed to get basic data from our systems, and then analyze it in Excel—that was about it.
The simple display of the candidate funnel in Figure 7.1 shows how useful technology can be in moving to a world where data is our friend. The image simply lists each of the steps of the hiring process, starting with Applied, then Screened, then Qualified, right through to Hire Yet to Start. The horizontal bars show the number of candidates at each step. If there is a problem in the process, such as too few of those passing the Screening stage and making it through the Qualifying stage, or (toward the end of the process) too few Offers Accepted, then it shows up clearly on the screen.
The great thing about having this kind of technology is that the data doesn’t stop with what you see on the screen—you can dig deeper to investigate any problems or anomalies.
Powerful Questions, Before Powerful Tools
The way to get good analytics, without a significant investment in analytics technology, is to be very clear about the questions the business needs answered. We wanted to know what social causes mattered most to employees because that was important to the employment brand. Given that kind of clear question, our analytics team could dig into the data on what matching donations had been requested by employees and pull together an answer on what social issues mattered most. We relied on good questions and a creative analytics team to give us the answers we needed.
Similarly, we did not create a lot of standard HR reports. The focus was always on being able to tell a story grounded in data. The starting point was the business issue we were grappling with and a solution that made sense given the data we had. We didn’t feel a need to create reports just because that’s what everyone else did.
Most of the mathematics needed for our analyses was pretty basic. In fact, at that point we did most of the analysis in Excel. When you want to do advanced analytics, then you’ll need an advanced tool like Visier; if you just want to make a business decision, then running the numbers through a spreadsheet is often enough.
Low Tech, Big Impact
As we discussed in Chapter 2, a useful analytics project that is particularly relevant to the CMO of People mindset involves developing a “persona” of a successful employee. The concept comes from Marketing, where you develop an idealized portrait of one or more typical customers. We created employee personas that illustrated what makes them successful: how they behaved, what made them stay, and what enabled them to move up in the organization.
What technology did we need to support this important piece of analysis? Nothing much. We gathered basic data on successful employees and used it to inform a discussion of the persona. Even though it was low tech, it had a big impact.
The takeaway is that you want technology to capture data that will be helpful in analytics, but you don’t necessarily need a big investment in data warehouses or machine learning.
What Can You Do Today?
Shift away from the thinking that technology will be the answer to your analytics woes. Consider the capability that exists in HR to ask the right questions, and the capability of the analytics team to provide creative answers in a world where data might be limited or scattered.
Examples of How We Built an HR Technology Infrastructure
Here are two examples of an HR technology infrastructure.
Technology changes so quickly that any detailed description can quickly seem dated. Nonetheless, we think that it can be helpful to move from general principles to specifics.
At Shutterfly, the flow of talent acquisition data started with an employer page on LinkedIn, which fed candidates to our applicant tracking system (Jobvite), which, after someone was hired, fed the data into our core HRIS (Workday). From there, the data went into our compensation analysis software (CompExcel) and the results of the analysis were sent back to Workday.
The takeaway is that, in practice, there were quite a few pieces—more than we’d ideally like—but the system worked well since the pieces were integrated to the point that we could easily share data between them.
From a pragmatic point of view, the system allowed us to do our work quickly with minimal administrative burden. From an employment brand perspective, we communicated that we were a technology-friendly organization. We also emphasized mobile access, which seems self-evident now but was less obvious then; that decision flowed from a focus on how the employee experienced the software, not what was convenient for HR.
What we didn’t do was just as relevant as what we did. There was no “joke of the day” on the Jive site because that had no relevance to the brand. Similarly, even though Jive recommended that we gamify the communication site, we didn’t go that route. We avoided those distractions by being clear about the business purpose of the communication hub: productivity. We wanted employees to get into the software, get what they needed to get done, and then get out. We didn’t want people hanging around earning badges. This sounds obvious when I say it this way—however, it should also be easy to see the appeal of a “joke of the day.” As CMO of People you need to spend far more time than you’d imagine communicating your vision and jumping on examples like this one to drive home the difference between how you conceptualize HR and how it may be practiced elsewhere.
But It’s Not Always That Clean
The Shutterfly example is a nice, clean case of what a mid-sized company can do. At DocuSign, the HR technology grew up focused on point solutions (applications supplying one data point) and we ended up with an enormous set of applications sitting on a single sign-on page. The long-term plan was to consolidate the applications, which isn’t that easy to do. It was a lesson on why you need an HR technology roadmap to guide the implementation of HR—without that roadmap, it’s natural to end up with an awkward system that is difficult to correct.
The lack of user friendliness in our HR technology showed up in the engagement survey. One question asked, “How easy is it to work here?” and the score was relatively low in part because of the difficulty of using the HR systems.
While the HR systems were not integrated as cleanly as we would have liked, we were successful in integrating data between HR and non-HR systems. This integration allowed our analytics team to do business-focused people analytics. For example, to better understand how salespeople were performing, our analysts needed access to the sales territory system. To understand costs related to the employee experience, such as food and leasing costs, we needed access to the general ledger.
Getting access to non-HR systems can be a political and technical challenge. Sales is usually open to sharing access to its data with anyone who wants to help. Finance, which plays more of a “guardian” role in the organization, can be protective of access to the general ledger. They want to know exactly how the information will be used, but in the end, as we built trust it became easier to get the data we needed.
What Can You Do Today?
It’s likely that you’ll end up with multiple HR systems. Ensure that there’s adequate integration at each handoff so that your HR team isn’t wasting time on unnecessary administrative work.
Takeaways
–Investing in technology early prevents HR from falling into the trap of building manual administrative processes that eat up all of HR’s time.
–One of the biggest time-wasters is the lack of integration between different pieces of HR software.
–The secret ingredients of successful analytics are good questions and a creative analytics team, not expensive technology.
–If you are growing rapidly, then you need to bite the bullet and make a hefty investment in HR technology that will scale with your organization.