Here’s what HR execs need to think about before making tech buys
The latest human resources technologies promise to equip employers with insights that can help them make smarter strategic and tactical workforce decisions. But not every solution is right for every company’s needs. Employee Benefit News recently spoke with Brian Kropp, the HR practice leader within Gartner’s talent management unit, about navigating the HR technology landscape. Edited excerpts follow.
EBN: What’s the state of HR tech?
Brian Kropp: The current state of most HR technology capabilities is really about automating existing HR processes, rather than leveraging technology to re-imagine how you do HR. So, companies are being forced into different process decisions based upon what Oracle, Workday, SAP – whatever vendor it might be – is telling them to do. That in some ways is forcing employers to make specific decisions about the HR processes they have in place because they have to fit those processes to work with the vendor’s technology, rather than adapt it to achieve the talent outcomes they are trying to achieve.
EBN: What about all the startups in the digital HR space? How are they changing the market dynamics?
Kropp: There are a set of up-and-coming vendors doing interesting stuff, but there is risk that’s associated with them. If you’re an HR executive and you decide to go with Oracle, SAP or Workday, you might not be making the best decision, but you’re not going to get in trouble for making what others will perceive as a safe choice. So, sometimes you’ve got to choose between the least risky decision and the best decision.
EBN: How might going with the “safe” decision that isn’t the best decision play out?
Kropp: Think about the process of opening up a requisition to hire someone. If the HR system is built around how finance works, that process is going to be a finance-driven process rather than an HR one. So, it’s going to have things like getting budget approval first, determining comp, the start date, and, if you’re going to hire that person, how the new hire will impact the finances of the organization. Alternatively, if it’s an HR-driven process, you have a system that starts by looking at the skill set needed, where do those skill sets exist, how can you find those skill sets – you have a system that helps you get there. Those are two very different ways to figure out how to solve your staffing problem.
EBN: Can’t a system designed primarily with finance in mind be adapted a little to accommodate HR needs?
Kropp: Sure, there are all sorts of things that can be bolted on. But from a user perspective, if you have to learn multiple systems and how they fit together, that becomes difficult and arguably more expensive.
EBN: What about starting from scratch?
Kropp: Yes, some companies have built their own. The argument there is that you can make it a perfect fit for your needs. But the challenge is that it’s impossible to actually benchmark and compare what you are doing relative to other organizations, which then creates a whole other set of problems. As much as I would love to be able to say there’s a perfect strategy here, there’s not. It’s about what trade-offs you’re willing to make.
EBN: What about the cloud? Is that the inevitable choice?
Kropp: Yes and no. When you have a cloud-based solution, your employee data is housed on that company’s servers, which is great because then you can access it from anywhere, it provides a ton of flexibility, it saves costs from your perspective. However, if you house your data with a cloud vendor, you may no longer own it. Then it creates a huge risk around how do you get data that someone else owns or co-owns?
EBN: And then there’s the question of data security in the cloud.
Kropp: Yes, there’s another set of risks that some people haven’t thought enough about when it comes to cloud-based providers: What happens if that data is breached? What is your responsibility to your employees?
EBN: When it comes to HR technology, what’s the next big thing?
Kropp: I think the most interesting thing in this space is companies trying to get a better understanding and sentiment about their employees that doesn’t come from a survey. There are all sorts of capabilities now to scrape across Twitter, LinkedIn, emails, all of that, to gauge employee sentiment – what they’re thinking and feeling. And it will be cheaper, faster, and much more real time than any of the tools that we use right now to understand employee sentiment.
Companies right now are thinking about how to develop a talent analytics strategy and how to use all the data they’ve collected to figure out, for example, whether they’re paying people too much or not enough, whether workers will quit if they pay them less, and so on.
But the belief that a lot of people have is that as soon as you buy these newer technologies, all of a sudden you’re going to be able to answer those really interesting questions. The problem is that a lot of organizations don’t have the underlying data the systems need to provide reliable answers.
EBN: Do you think it will ever become targeted to the point where you get an alert saying, “It looks like these 25 employees are on the brink of quitting, here’s what can you do to preempt that”?
Kropp: There are companies out there now that, based on LinkedIn behavior, can predict with pretty good accuracy whether or not you’re about to quit. Right now they provide companies a list that might say “20 percent of your employees are at high risk of turnover, 10 percent are at medium risk of turnover,” whatever it might be. Then it identifies them person by person. The problem is we, as a society and as employers, don’t know how to then have that conversation with our employees, or even whether we want to, or should.