Saturday, November 10, 2018

Where Configurability Matters Most In The HR Technology Arena

Let’s start with the universally accepted principle that configurability, like the rest of the “abilities” relative to HCM systems — usability, scalability and inter-operability — are the hardest aspects of a product offering to dramatically improve. These platform attributes (vs. features) consequently should be front and center when evaluating prospective HR technology, because if high marks aren’t earned now, that likely won’t be changing anytime soon. Conversely, “features” are basically being added every product release cycle, which are occurring much more frequently in the cloud HCM era.
This post looks at the various strategic components of an HCM platform from the standpoint of where very robust configurability — or the ability to determine how the system behaves based on user defined rules, parameters and other conditions – matters most. And this control over the system, whether related to defining workflows, process or data handling rules for different populations, or other process nuances, should largely be within the purview of the HR or HRIS organization … with the exception of the most complex configurations.
My perspective on where configurability matters most is based on operating for three decades on all sides of the HR and HR Technology domain. Additionally, a key point to highlight up-front is that while HR technology process areas are arranged below according to where a configurability toolset is most critical (listed from least to most), all strategic HCM areas or more transactional / administrative HR areas have configurability-related requirements. This discussion is therefore about relative importance of the configurability toolset, not where it is or is not important.

Configurability Considerations By Strategic HCM Area

Configurability Considerations by Strategic HCM Area
  • Learning Management: Examples of areas often associated with configurability requirements and capabilities include branding, workflows (e.g., requests and approvals), courses offered by learner profile or organizational criteria, curricula or course-chaining rules, eligibility drivers, test results as drivers, e-Commerce rules (to charge-back the learner’s cost center), assessment steps and options, gamification parameters, governance rules around social learning and 3rd party content, etc. Learning management systems absolutely need to be configured, and arguably as much as any other strategic component of an HCM system in order to drive ROI. The reason why I started off mentioning LMS tools is because configurability rules tend to be relatively straightforward and standard from customer to customer; consequently the flexibility and sophistication of these capabilities probably won’t be a major source of product differentiation.
  • Total Compensation Management: Examples include eligibility to participate (i.e., be covered within) a particular compensation process, salary increase rules and guidelines (aka “grids”), total compensation elements and parameters, total rewards statement options, long-term incentive plan and deferred compensation plan parameters, and something we will see more of going forward given the importance of personalization in achieving a superior employee experience: total compensation trade-offs and equivalencies; e.g., ability to “trade” X portion of an annual salary increase for a type of compensation with more upside but also greater risk. This area of HCM is being mentioned second because while configuration needs such as specifying increase guidelines and eligibility rules largely have common structures across companies, long term incentive data handling rules and plan designs can vary significantly.
  • Recruiting: Examples of process aspects that can have very broad and/or complicated configurability requirements — thus making the configurability toolset’s sophistication and flexibility more of a product differentiator — include branding the candidate experience, job posting rules, a myriad of rules for automating candidate relationship management and recruitment marketing activities, interview sequencing parameters, when different screening steps apply, offer letter content scenarios, background checking steps, assessment test applicability and access to results, when search firms and agencies can be used, workflows related to starting salary and what data gets passed to the employee record.

    Given all the different flavors of recruiting-related configurability needs, does another talent management automation area exist where the criticality of configuration capabilities is on-par (or sometimes even more critical) than recruiting? Yes.
  • Performance Management: Recruiting and performance management are fairly close as far as being HCM areas where a flexible and powerful (but also straightforward to use) configurability toolset is a huge difference-maker. The key reason why I’m asserting that performance management is the HCM process or system component where these capabilities matter the most is the following: Organizations often use more than one system for talent acquisition, so all of the impactful configuration capabilities don’t have to be provided in one product. Performance management on the other hand, including in the context of modern day continuous performance management (“CPM”) and real-time coaching, is almost always handled through just one product’s configuration capabilities; therefore, the performance management product used must have a configurability toolset that is frankly off the charts.
    A sampling of such capabilities include aspects related to process design (e.g., 360 degree feedback or something else; as well as whether the process is goal or competency-centric or both), the process per each population segment or business area, weightings for goals and/or competencies, capturing coaching content and actions needed/taken, participation parameters, whether other “employee value indicators” are captured in the process (e.g., employee mentors others even though it’s not part of their job purview), how data is passed to other systems such as learning management, how kudos or other types of recognition are given, etc. And if an end- customer decides they want to capture something a bit more esoteric such as which competencies might become increasingly important or the opposite? Well this is where the PM tool’s flexibility and power are also on display.

Bottom Line

If you’re in the market for enterprise performance management software that excels and differentiates by allowing users, including non-technical users, to shape and mold the system any way they need to, now and in the future, you should focus on configurability capabilities. The more impressive these are, the longer you will use the product when your industry counterparts are in replacing mode, and the shorter your time-to-value will be.

Sunday, October 8, 2017

3 Things that MUST be Emphasized on HR Technology Implementations

1. The “what's in it for me” perspective of each category of user

HR Systems have been getting procured and successfully implemented for decades, but sometimes, neither the organization nor the products being implemented are totally ready. This of course can result in roll-outs needing to be revisited or halted mid-stream, essentially pouring some degree of financial investment down the drain. Organizational readiness can relate to other strategic initiatives that are perceived as more important, causing project resourcing challenges or distractions. It can also relate to new or improved skills or competencies needed in areas such as HR analytics, software release management or HR process optimization. And speaking of process improvements, another aspect of readiness is whether some or all of the HR processes being automated are flawed, and consequently should first be optimized before new systems are deployed.

Organizational readiness is one aspect of a broader and ideally “best fit” change management program that should accompany all strategic initiatives, including HR Technology deployments. The correlations between degree of incorporating effective change management into these projects and their eventual success (measured by user adoption or more direct business benefits like cost savings, efficiency gains and better talent management outcomes) has been well chronicled. And more broadly, HR Technology industry research firms like Sierra Cedar have consistently found that “HR organizations that support a Culture of Change Management are four times more likely to be delivering noticeable strategic value to their organization versus organizations that practice minimal to no Change Management.”

Of equal importance, there is also the fundamental change management principle of emphasizing the “what’s in it for me?” perspective of all those who will use or be impacted by the new system. This is a major part of assessing readiness at individual levels, and more specifically, must be in the forefront when developing and communicating the “case for change” -- a common phrase used within the change management discipline. Additionally, the reality is that new technology of all kinds are frequently over-sold by solution vendors with respect to the end-user experience, key capabilities, how they work with other tools, etc. Unfortunately this can cause these initiatives to then get over-hyped by project sponsors, making the “what’s in it for me?” angle that much more important to stress; i.e., past experiences with other technology roll-outs might have led to some residual cynicism.

Simply put, a compelling communications framework should be developed that enables all stakeholders and impacted parties (employees, applicants, HR specialists and business partners, line managers, executives, relevant external partners, etc.) to readily map the new enterprise technology asset to benefits they will personally experience, some of which are universal benefits like “saving time”, but others are more stakeholder group or even person-specific, such as helping to progress one’s career, or just perform better in their role.

2. The importance of end-users being in control of, and accountable for, data quality

Worldwide spending on HR software and related services will approach $20 billion over the next few years (“20 by 2020” is supported by many analyst firms covering this domain). This has been propelled by a confluence of significant factors including organizations jumping on the SaaS (Software-as-a-Service) bandwagon, likely to avoid costly and disruptive upgrade cycles (associated with on premise-installed enterprise software), have more predictable spends on HR Technology, and benefit from the experiences and learnings of other customers -- since all are using the same version and flavor of the product in the cloud model.

SaaS is clearly not the only driver of market expansion. HR / HCM platforms and tools have evolved dramatically in areas such as analytics (including predictive analytics), offering much more intuitive and engaging (“consumer-like”) user experiences, adopting mobile as the predominant access and usage device, leveraging social capabilities and data in recruiting, development and employee engagement … and more recently, adding early-stage capabilities around AI, chatbots, cognitive computing, etc.   

Notwithstanding these significant advances driving the market, the biggest “Achilles’ heel” that continues to limit the range of business benefits from these investments in many customer organizations is inadequate attention to data quality. Therefore, a data ownership, accountability and integrity assurance plan MUST be a central part of every HR Technology rollout; and ownership should ideally be in the hands of the person who has the biggest vested interest in the data being correct!

Internal service level agreements or “SLA’s” can also help quite a bit in ensuring data quality, and frankly, avoiding a lack of confidence in the system when bad data is really the culprit. As examples, line managers and employees should be formally expected to update certain data elements that they own when particular events occur like a department transfer or address change, respectively; and the SLA metrics should specify a quick window for updating or initiating the transaction.

3. Finally, focusing on business drivers, how they might be changing over time, and how the new HR system will stay aligned

Successful organizations are usually very fluid, or to cite an over-used cliché, the only constant is change. When planning an HR Technology rollout, both planned and potential changes must be considered and factored-into the enterprise solutions being brought in; i.e., how scalable and adaptable is the software to a broad range of events and/or business decisions that might occur. Whether the change driver is a decision to expand into new markets, pursue a growth through M&A strategy, a move to outsource non-core functions, or simply invest more heavily in talent management programs, the software vendor’s current offerings and planned product roadmap must be evaluated against these possible scenarios to ensure on-going “functionality and capability fit.” In the absence of doing this, the shelf life of the new technology will probably be short-changed.  

Core HRMS vs. TMS vs. BoB's -- The Key Trade-Offs

The HR Technology landscape is filled with a lot of jargon, and frankly, most of it benefits marketing executives within HR/HCM solution providers more than those procuring one of these solutions. Some of the jargon is wrapped in acronyms such as SaaS (Software-as-a-Service), ERP (Enterprise Resource Planning) Systems or ATS (Applicant Tracking System). SaaS refers to the hot trend in recent years to “rent” vs. purchase HR software applications, typically through the cloud delivery model where every customer is using the same “instance” or version of the software. ERP platforms (e.g., in HR, Finance, etc.) are the technology platforms for running business processes and managing related transactions.

These systems include a data model, processing and workflow rules and end-user security permissions. ERP’s also interface or talk to other systems inside and external to the organization. Finally, ATS tools came on the scene in the 80’s and more recently offer innovations allowing more proactive and personalized outreach to both active and passive job candidates. ATS’s track candidates through the sourcing, screening and eventually hiring/on-boarding process; and now often include or plug into tools/technologies for video interviewing, social sourcing, behavioral assessments, job simulations and employee referrals.

 HR Technology “Category Jargon”

 Arguably the most important jargon heard in the HR Technology domain refers to the type of solution being discussed. We’re not referring here to functional solution types such as recruiting, performance management or learning solutions. “Type” in this case relates to the category of solution. Why is this so important? Well, it’s a great place to start a conversation with an HR Technology vendor, from which many other key questions should logically follow.

 For example, once you’re told a solution provider operates in the “HR-ERP” market or its alternative label, “Core HRMS “ (Human Resource Management System) space, you immediately know they offer a transactional HR platform and “system of record” for recording relevant data and enabling analyses around all events in the “hire to retire” employee life cycle. You can also associate this category of HR system with passing presumably validated data to systems used by other corporate functions and external service providers. Typical vendors mentioned in this category are Oracle, SAP SuccessFactors, Workday, ADP, Infor, Kronos, Ceridian, Ramco Systems, Zenefits, etc.

If, however, you were getting a presentation from a Talent Management Suite or “TMS” provider (popular vendors include Saba, Cornerstone OnDemand, PeopleFluent, Silkroad Technology, etc.), you won’t hear much talk about a system of record for employee life cycle events and transactions, but will likely learn about their best of breed, functionally deep modules that are tightly integrated. A TMS is essentially the coupling -- through various degrees of “tight integration” and through various degrees of offering a common user experience – of individual modules each designed for automating a specific HR process like recruiting, learning or performance management. The relative extent of tight integration and common user experience (look and feel) across the different modules is typically tied to whether all the modules were organically built by the same vendor, or whether some were acquired and are being brought into a common solution framework over time.

 The main difference between a Core HRMS or HR-ERP platform and a TMS are twofold: The former includes the system of record for employee life cycle transactions and is fairly broad in functionality; and the latter excludes the broad transactional HR recordkeeping but tends to offer deeper functionality for achieving best-in-class HR process design and support. Finally, Best-of-Breeds are simply the category of HR Tech solution where single or “point” solutions are offered for automating and enabling just one HR process area, such as the aforementioned ATS for recruiting automation.  

The Swinging Pendulum

Those operating in the HR Tech domain for some time likely know exactly what this section header is referring to, namely that many customer organizations go through “preference cycles”, which can take a few years or considerably longer before pursuing another HR Tech strategic path. Many customers will seek to consolidate disparate solutions from different vendors, and migrate to a unified solution from one vendor, after complaints from end-users about things like redundant data entry, having to learn multiple user interfaces or “TCO” (total cost of ownership) in general. On the other hand, a subset of HR Tech customers find themselves going in the opposite direction, again, usually after enough complaints from end-users. These organizations then pursue a strategy of deploying specialist or best of breed solutions, or solution suites. This direction is sometimes viewed as essential for handling HR process pain points that are not being adequately addressed by the incumbent, core HRMS platform, or perhaps to align better with HR process nuances needed by their business.

Pendulum swings can also result from factors not very related to the virtues or gaps of particular HR software products. Case in point: a new executive in the mix simply prefers another HR Tech solution or strategic approach based on their previous experiences.

Modern ATS’s (Applicant Tracking Systems) … What’s Changed?

Technology that automates and optimizes the recruiting process can certainly be confusing with respect to solution labels and categories. Applicant Tracking Systems or ATS’s can now find, source, proactively engage and evaluate the suitability of prospective talent, including those not “on the market” or passive candidates. The subset of ATS’s that include “Recruitment Marketing” capabilities can then be leveraged to stay connected to targeted talent, create communities of value to keep them engaged, communicate personalized messages that market an organization’s brand and culture, and track what types of communications and outreach efforts work best with different types of candidates and roles.

Really? Yes, really!
This is one of the main ways ATS’s (aka Talent Acquisition Technology) evolved in recent years. While a traditional ATS automates the application process for candidates, recruiters and hiring managers, and provides a repository to search for relevant applicants, it doesn’t allow you to market to your candidates. A CRM capability -- within or outside an ATS -- allows you to create a private talent pool and automate the nurturing of job candidates. The two tools serve different, but interconnected purposes and they complement each other. Today’s active candidate is tomorrow’s passive candidate and CRM functionality helps you easily deliver the right message, to the right people, at the right time.

Recruiters now utilize technology (sometimes included within an ATS platform) to go where potentially relevant talent is, and not just prominent social media sites like LinkedIn, Facebook, Twitter, Google+, Pinterest, Instagram and YouTube, but also discussion boards, on-line forums and blogging sites where comments can be as useful as the posts themselves for identifying exceptional talent. Of course social media and mobile computing go hand-in-hand with almost all early-career job seekers and passive candidates, and with arguably the majority of mid and later-career talent as well. These are the vehicles for starting the engagement process with relevant candidates, but inherent system intelligence is often what closes the deal in terms of getting the best talent to consider a certain organization and/or role. It’s the system intelligence, a vital component missing from the first wave of ATS’s on the market, which guides the employer / recruiter on the best ways to engage with each person on their radar … what message will resonate and entice the most, across content, style, medium and frequency.

Additionally, the screening and interview process can now readily be technology-enabled with video interviews, sometimes built around validated predictive communication patterns; and these systems don’t stop delivering value when a hire is made, as analytics can now link job performance and retention back to sourcing channels and screening methods to highlight those that are most effective for different roles.
Navigating a Complicated Vendor Landscape

There are likely at least 15 Applicant Tracking System (“ATS”) purveyors with a 1% market share or greater, led by such established players as Taleo/Oracle with perhaps over a 30% market share, Brassring (Kenexa, IBM), iCims, Jobvite, ADP, SAP/SuccessFactors, PeopleFluent and Silkroad. Additionally, the landscape includes other relatively mature ATS offerings from PeopleSoft, Ultimate Software, Lumesse and Kronos … plus more recently launched recruiting solutions from HCM  powerhouses Cornerstone OnDemand and Workday. Additionally, several smaller operators are gaining serious traction such as Greenhouse, Lever, SmartRecruiters, HireBridge, ATS OnDemand, PCRecruiter and ApplicantPro.
And  rounding-out the broader solution category are the well-known brands with a heritage in job boards -- Monster, CareerBuilder and Dice … and the emerging recruitment marketing sub-category players Avature, Jibe, Broadbean, Findly, Smashfly, Talemetry, etc.

Obviously it’s a fairly cluttered and complex recruiting technology market; which is why it’s recommended that prospective customers go through the typically laborious due diligence process of mapping their most acute talent acquisition pain points and challenges to solution vendors with relevant capabilities – as tangibly demonstrated in product demo’s. Narrowing the field to a short list for detailed evaluation should then involve examining factors such as product investment patterns, efficacy of the vendor’s customer success model, pricing, proposed SLA frameworks, findings from customer reference calls -- and the sometimes (perilously) overlooked -- alignment of company cultures.

12 HR Tech Capabilities That are Changing the HR Domain

Talent management processes are about effectively recruiting, developing, evaluating, rewarding, retaining and otherwise maximizing the engagement and contribution of all employees. The role HR technology plays in achieving this has never been more prominent than it is today.
Eight to ten years ago, HR tech processes were automated but disconnected, analytics were available only to expert users through separate tools, different talent strategies per workforce segments were just a vision, and user experiences were anything but engaging.

Things changed roughly six years ago, when the two largest talent management software players, SuccessFactors and Taleo, got acquired by the two biggest HR-ERP or HRMS vendors, SAP and Oracle. This certainly opened up HR tech vendor R&D budgets to continue innovating outside of employee life cycle transactions.

Another innovation catalyst was capital infusions (via IPO, private equity, etc.) at leading talent management suite providers, like Cornerstone OnDemand, PeopleFluent, SumTotal Systems (now part of SkillSoft), Saba, Halogen Software, Silkroad, etc.

These factors, plus newer HR tech market entrants and continued momentum at mid-market players or payroll/workforce management-focused companies like Ultimate Software, ADP, Ceridian, Kronos and Ramco, lifted the market in terms of many higher-impact "TM" capabilities.

Yes, it can finally be said that talent management technology has reached maturity! So what are some of the newer talent management technology capabilities that have impressed us?

12 CAPABILITIES MAKING A DIFFERENCE

1. Year-round coaching can now be part of the performance management and improvement model.
2. Personalized rewards and retention schemes allow investments in employees to have maximum impact.
3. Culture fit and team fit can be added to the assessment of candidate and employee suitability.
4. Gamification is among the newer "hooks" that don’t just find but actually engage candidates. Engaging candidates, particularly passive candidates, is a winning recruiting strategy.
5. Job simulations have also been added to the recruiting toolkit, which not only helps with assessing candidates but allows candidates to realistically decide if they want to pursue a job with specific challenges. These can now be experienced, not just discussed.
6. Video interviewing, which may include embedded predictive capabilities, is now dominating the talent recruitment space.
7. The video medium is also getting widely adopted in learning, including video on-demand learning and social learning.
8. Social network analysis is the ability to identify who influences whom within the organization. This capability helps with change management, as knowing the "influencer nodes" is key.
9. Sentiment analysis/climate measurement – using algorithms against unstructured data in emails, for example (in the aggregate, not at the individual level, as that would breach privacy regulations) – is quite valuable in keeping a finger on the pulse of employee engagement.
10. Gig economy management empowers employers to manage non-employees and contractors – who often serve as an extension of the workforce – just like traditional employees, when appropriate.
11. Career pathing, a capability offered mostly by niche HR tech vendors, enables employees to work with their manager in progressing their careers. The system analyzes which job roles lead to other roles, how long the process might take, what skills might be leveraged, etc.
12. Prescriptive analytics can now guide managers about what actions to take to dissuade key employees from leaving, among other things.

The 12 trends above are parts of the bigger theme emerging in talent management technology: integrated talent management. Analyst firms like Bersin & Associates (now owned by Deloitte) have published research showing that when talent management processes, technology components and – less we forget – teams or departments within HR functions are meaningfully and integrally linked, the business impact is often dramatic. Focus areas such as employee retention and employee productivity (e.g., revenue per employee) are noticeably higher in organizations that achieve a high degree of talent management integration.

When the same core and leadership competencies are used to hire, evaluate and develop employees, a foundational level of integrated talent management has been established. Then, when the outputs of one process, such as performance management, automatically become inputs to other processes, like learning & development and succession planning, a greater level of talent management integration can drive major efficiency gains.