Dan S. Staley, a PricewaterhouseCoopers principal and the firm’s human resource technology leader, has been closely following the digital transformation of HR. PwC recently released its fourth annual HR technology survey, which provides fresh insights into how the cloud, predictive analytics and other new technologies are changing the way employers track and manage employees. Staley recently discussed the survey’s key findings with contributing editor Richard Stolz. An edited version of their discussion follows.
Which of the survey results surprised you the most?
The first was that the satisfaction levels with cloud migration jumped. In last year’s survey a lot of people were experiencing some challenges – there were still some growing pains in moving to the cloud. But this year, those satisfaction levels really shot up, to 83 percent. We asked about ease of release adoption, how well vendors can communicate with clients about what they’re planning to do in the future, the enhancement schedule, how quickly they resolve issues. The increase in satisfaction tells me that organizations are getting more comfortable with the cloud. It also tells me vendor quality is improving. The vendors are testing better, they’re communicating better and they’re resolving issues better.
The cloud is looked at by many organizations as a great platform to introduce digital tools. Are HR executives getting what they need from the cloud?
Even though employers might say they’re satisfied, they might not be changing their business processes to get the full benefit of the cloud. So instead of blowing up old models and adopting the new ones that the cloud offers, they’re resisting and trying to force-fit old clunky processes into the cloud. You can usually find a way to do it, but it really sub-optimizes both the application and the employer’s process. You end up with some strange kind of hybrid process.
Can you illustrate this?
With on-premises-based software, you can do a lot of customization. The vendor provides a tool set and you can build whatever you want – you can change screens, add tables, add fields … you can do whatever your heart desires.
In the cloud, you really can’t do that as much.
The cloud vendors have tried to give customers options to make configuration choices – you can hide fields and you can extend certain things – but it’s pretty limited compared to what they had with on-premises software. So you have to make some compromises. You have to change your processes.
You have written that a migration to the cloud “provides the spark needed to break old ways of working and adopt new ones.” So I guess that doesn’t always happen?
Not always. But it should force you to rethink what you’re doing and look the new things you can do. For example, the cloud gives you the ability to be instantly mobile. In the past you could deploy mobile capability, but it would take extra work to make that happen. With the cloud, you generally get that capability automatically.
Where is the impetus coming from for migration to the cloud?
The HR departments that are the most successful are those that are locking arms with the CIO, and both are very passionate about changing employee experience, taking advantage of innovation.
Your survey found that many HR leaders have overstated the business case for cloud migration. Why is that happening? Are the benefits being oversold?
One reason is that organizations often don’t think enough about themselves and their unique circumstances – and the challenges they’re going to hit. They might have heard that “company X” moved to the cloud in four months, and assumed they could, too, without recognizing that “X” is a much more nimble organization. Another one is they don’t dedicate sufficient internal resources to do the project or lack the necessary level of support from all the stakeholders. So they might assume they’re going to be able to change their processes and it’s going to work more efficiently, but then they hit a lot of resistance.
In addition to the cloud, you see a great future for robotic process automation, or RPA. Why?
RPA has existed for a while; it’s just been rebranded. RPA is just good old-fashioned process automation.
But there’s good usage for RPA. Let’s take an example of when someone applies for a job. You submit your resume; it’s uploaded. Then the system automatically sends you an email that says, “We have your resume; somebody will get back in touch with you,” and then sends updates as your resume progresses through the process.
Another good example of using RPA might be during onboarding. When a new employee is onboarded there are hundreds of different steps – from getting the employee a badge to getting a laptop ordered. And if an employee wants a standup desk, that has to be ordered, too. All these processes are starting to be automated with RPA.
You also see a big future for HR predictive analytics. How can HR predictive analytics project employee attrition, and how do they help companies better manage their workforces?
Predictive analytics will look at a host of things, from hundreds of different data fields. They will look at your compensation relative to your commute, your performance, your attendance. Then we can run all these different variables and predict who is going to leave next. You might find that there are some people who work from a remote city and are paid less than their peers, yet they are higher performers. So you can say, these are the folks who have the biggest flight risk. And then you could do two things: give them extra attention or, knowing that they are more likely to leave, start to look for successors, even if the goal is to keep them.
When you look at predictive analytics, you usually think of them as something for larger organizations. Can smaller organizations take advantage of predictive analytics?
It’s still a big endeavor, but it can be secured on an outsourced basis. You just send the outsourcer your data, and its team will analyze the data and send it back to you. It’s an ongoing service.
In your report on the survey, you stated that “technology deployments that are not tightly linked to a workforce analytics strategy can lead to conflicting priorities that do not support the strategic direction of the enterprise.” Can you explain what you meant?
The point is that before you roll out a new capability, you have to start with the end in mind, particularly people analytics applications: What insights are you trying to gain? What business problems are you trying to solve? You then have to find out what kind of data you need to get these insights. Often we’ll see organizations say, “Well, we need to have predictive analytics,” so they’ll go and get a tool and then implement it without really knowing what they are trying to achieve. That’s where the conflicting priorities come in.
For instance, it might be how much data to convert. Let’s say an organization only has one year of comp information, but it wants to find trends in compensation. If the organization only has a year’s worth of data, then there is a real disconnect there.
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