hr’s strategic shift: how to leverage hr technology › wp-content › uploads › 2017 › 06 ›...

HR’S STRATEGIC SHIFT:HOW TO LEVERAGE HR TECHNOLOGY TO DRIVE BUSINESS RESULTS

Copyright © 2017 HRsoft

HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results

Introduction

The many functions of HR have shifted and evolved over time. Today HR’s sphere of influence on overall

corporate performance is significantly more powerful, both administratively and strategically.

The utilization of HR technology affords HR professionals the ability to shift their historic focus from administrative

and data management to one of a value added strategic partner. This shift is called (by HRSoft and M. Miller) as

moving from “data management to information craftsmanship”.

By utilizing the features and functions within many of the marketplace provided HR sytems ranging from large

scale, fully integrated comprehensive HR/Payroll/Benefits to best of breed solutions focusing on only a few

specific HR functions such as performance management, time and attendance or recruiting, the HR function can

evolve to delivering more strategic information to C-level executives (including of course the CHRO), because

many of the heretofore HR administrative tasks are now in the hands of managers and employees themselves.

A more effective and strategic HR function will be enabled to do more workforce planning, interact with other

functional departments within the company and focus on implementing programs that will prove to add value

to the organizations bottom line. HR will be empowered to use the comprehensive software applications, and

its underlying data, to generate forecasts, metrics and predictive analytics that will have an enormous impact on

the operations and foresight to activities that will be embraced by senior management. It will lead to powerful

insights which, if presented effectively, will be valued by C-level executives and which should have a significant

impact on any organizations initiatives, goals, missions and performance.

This white paper discussion will review the following:

� How the Role of HR Is evolving

� How to leverage HR Technology to reduce HR’s administrative burden

� What a strategic HR function looks like

� What information is wanted by C-level and other senior management

� Which Metrics should HR strive to provide

� Why Metrics are valuable for improving an organization’s performance



Basic Personnel Services

Control and Compliance

Strategic Expertise

A very long time ago

A while ago Recently – last 5-10 years

Bureaucratic and administrative aspects of dealing with employees -PERSONNEL

Aspects of dealing with unions (1930s and 1940s in U.S.)

Dealing with discrimination and other US Federal Legislations - (1960s till present day)

Take a business perspective in compensation, benefits, recruiting and staffing, succession planning

Organizational effectiveness, business planning, workflow, best practices

Apply behavioral science knowledge for recruiting, evaluating, compensation, Training, change management and DO workforce modeling and forecasts

Administrator

Enforcer

EXPERT

Onboarding, Engagement,WorkforceAnalytics / Metrics /predictive analytics

Strategic Workforce / Talent Management

IMP

OR

TA

NC

E T

O T

HE

OR

G

HR’s Evolving Role

HR TECH

HR’s Evolving Role

Recognizing the Value of HR Today

Within the past 5-10 years alone, HR has undergone some significant shifts. Few things illustrate the way HR

has been viewed better than a comparison of two compelling articles, written 10 years apart. In 2005, Fast

Company published a cover article titled “Why We Hate HR.” It outlined all of the ways in which HR could be

improved, thereby prompting HR teams to take action and address the key components that needing fixing. Just

one decade later, Harvard Business Review published an article citing all of the ways in which HR was making a

strategic shift, thus providing more value than ever before.

While the attitude towards HR has improved markedly, there’s still a lot of pressure on HR professionals to add

value by their own initiatives and to help the organization build best practices that must inherently support

company goals and missions. This to be done while HR still maintains responsibility for many administrative and

governmental dictated filings and practices.

The chart below captures the evolution of HR’s role over the last half century.



Evolving Challenges & Expectations

In 2016, the Society for Human Resource Management polled more than 3,000 HR executives to identify their top

ten challenges. Here are the results shown in order of stated priorities.

Among these, were “transforming HR into a strategic partner”, “managing globalization”, “managing talent”, and

“managing demographics” (in particular, Millennials). These findings align with the ways in which HR’s role has

evolved.

Originally, HR representatives acted as administrators. They provided “personnel” services, including overseeing

the bureaucratic handling of employee relations. By the 1930s and 40s, the role had shifted to that of an

“Enforcer”: they were expected to maintain control and compliance, especially in terms of dealing with unions. In

the 60s, they become responsible for handling discrimination and other U.S. federal guidelines arising from EEO

and Affirmative Action laws.

Top 10 HR Challenges Through 20171. Managing talent2. Improving leadership development3. Managing demographics (MILLENIALS)4. Delivering on employee ENGAGEMENT5. Managing change and cultural

transformation6. Enhancing THE USER EXPERIENCE7. Transforming HR into a strategic partner8. Improving performance

management/rewards9. Managing globalization10.Managing work/life balance



With the proliferation of effective software in support of a majority of the functional responsibilities under

the overall umbrella of an HR function or department, HR’s role has altered and expanded, along with the

expectations of senior management.

HR executives are expected to act as “experts”. They are responsible for onboarding, engagement monitoring,

and providing forecasts to help management make decisions and implement the many programs that address

the SHRM top ten issues and more. In many cases they are expected to apply behavioral science knowledge

for recruiting, evaluation, compensation, training, and so forth. They must also oversee talent management and

apply business perspectives to benefits, compensation, and succession staffing, and other functions.

The effective use of HR technology must be oriented to add “value”. The “value” proposition must be effectively

communicated, (if not sold) by HR executives.

The chart below shows the relationship of how HR Technology features themselves can contribute to the value

proposition.

Employee & Manager Self-Service (ESS/MSS)

Forecasts & Trends via Dashboards

Web-Delivered: Time Capture & Reporting Performance & Career Development Job Posting, Recruiting, Hiring & On-

boarding

Web-based:

Work Group Collaboration

Workflow and best practices

Remote Location 24/7 Access via Mobile

Some interaction with Social Media sites

“Value” is Achieved with HR Technology…

Cost Reduction

Cycle Time Reduction –Processing Efficiencies

Improved Information

Full Compliance at all levels

Increased Capabilities & Functionality

Enhanced Employee Engagement

Data Quality Near 100%

“Big Picture” – Business Metrics Easily Available



HR must seek significant strategic influence. The technology at hand will enable them to move from a tactical

– administratively driven function to one of “Game Changing “ strategic involvement at the highest level of any

organization.

If the 5 components of any organization are taken into consideration, that of – People, Process, Technology,

Structure and Culture – as shown below in the second of the 4 dominos, and the appropriate capabilities and

talent exist, and metrics for measurement are in place, an organization will be positioned for financial success by

any measure.

HR’s Hierarchy of INFLUENCE/value

AnalyticsEvaluation

Engagement

IT & Telecom / Facilities & Security /

Workforce Mgmt & Planning / Labor Allocation / Procurement

Government Compliance:Environmental Mgmt & OSHA /

Social Media Policy and Procedures

Recruitment / Employment / Compensation / Benefits / Learning Mgmt/ Performance / Workforce Development /

Time & Attendance / Payroll / Regulatory Requirements

TACTICAL

ENTERPRISE SUPPORT

“GAME CHANGING”STRATEGIC INFLUENCE

Getting to “Policy andPlanning”



The needed transformation of service delivery: Leveraging Technology to Reduce the Administrative Burden

In order to achieve the overall corporate success, HR must be perceived as the strategic partner it needs to be.

This can only happen by implementing appropriate technology that, by definition, will reduce the degree of

administrative service delivery and allow an increase in strategic support.

IMPACT OF BUSINESS ALIGNMENT

Aligning HRto impact . . .

. . . Key organization success drivers to build . . .

. . . Organization capabilities that address business challenges to create . . .

. . . Improved business performanceand increased value

The 5 “success drivers”must be aligned from topto bottom: PEOPLE, PROCESSTECHNOLOGY, STRUCTURE andCULTURE



In the above figure, the classical view of HR’s role in service delivery is shown as the left side triangle (or pyramid).

Without today’s available technology, for decades, HR responsibilities have fit into this traditional pyramid shape,

with administrative work taking up roughly 60% of HR’s responsibilities/service delivery, with interdepartmental

“business partnering” falling in the middle at 30% or so. At the very top and thus receiving the least amount of

attention from HR, are policy and planning initiatives.

Now, most organizations must seek to shift the role of the HR function into the right side shape. The goal in

implementing HR technology is to achieve a “diamond” shape, in which the administrative activities can be

significantly reduced in two major ways as a result of an effective implementation of supportive HR software and

functionality features.

As shown there are two major ways in which technology can reduce the administrative workload. The

implementation of web delivered software applications via a Software-as-a- service approach (SaaS) will

automate and instill best practice workflow for benefits administration, payroll, and recruitment and dozens of

Admin

Policy/Planning

20%

50%

30%

Outsourced activities to third party

Outsourced activities to employees

Business Partnering

HRT

SaaS

HR Admin, Payroll, Benefits Admin,

Recruitment

60%

30%

10%

Administration

Business Partnering

Policy/Planning

ESS/MSS

WorkflowBest Practices

Email Alerts

Transforming HR:Classical View to “Diamond” view



more HR areas of oversight. The always needed and important features of those delivered software applications,

the employee self-service (ESS) or manager self-service (MSS) tools will allow significant workforce activities to

be done by employees and managers throughout the organization, directly and without any intervention by HR

staff. The combination of workflows, ESS and MSS and the ability for software to enable access to the system

of record via desktop, tablet or smartphone will reduce administrative tasks as much as 40%. This will allow HR

staff to focus significantly more time and effort on strategic value added initiatives including the planning for new

programs and deeper analysis of the workforce skills and capabilities.

HR technology provides value enriching features and they are incorporated into most of the key solution

providers who offer software related to HR Management.

A comprehensive HRMS with one master file will provide the features shown here and allow a single sign on to

access all functional components.

THE VISION – AVAILABLE TODAY from any numberof effective and proven HRMS VENDORS!

ONE “SYSTEM OF RECORD” SINGLE SIGNON IMMEDIATE ACCESS BASED ON

ROLES AND RULES IMMEDIATE REPORTING HISTORY VIEWED WORKFLOW EMBEDDED “BEST PRACTICES” ESS AND MSS INTUITIVE NAVIGATION INTERGRATED FUNCTIONALITY DASHBOARDS AND METRICS



Portal Integration

Most vendor offerings must be integrated within a company’s existing “portal” as the entry point via the internet

– with which anyone (depending on role) will be able to interact with the System (s) of record. The figures

below shows the intended vision of the outcomes and benefits to the workforce that are achievable with HR

technology solutions which include ESS and MSS.

“The Portal”A Personalized

“My WORK/LIFE”

Gateway

Work/Life Web Site

An employee or enterprise “portal” will improve the quality of HR service delivery by providing: Single point of access intuitive user experience Consistency of information, procedures,

and transactions Faster transactions via built in workflow Increased employee productivity and morale A channel to facilitate change management and culture

alignment

Resulting in: Reduced costs Re-enforcing a “high tech” culture, appealing to new

generation workers – Gen X, Y and Millennial “The Sticky Workplace,” which retains quality people

An effective EMPLOYEE SELF SERVICE STRATEGY (ESS) as well as MANAGER SELF SERVICE (MSS) results in lower costs, increased value to the business, and improved work/life balance for employees.

THE VISION

THE VISION

Internal / External Users

Business partners

Applicants Employees Managers Retirees

Knowledge Based

Systems

Core HRMS Systems

Foreign Local

Payroll Systems

HR

ADMINISTRATION

AND

POLICIES

Access Technologies

Desktop

Web

Social media

“The Portal”A Personalized “My

WORK/LIFE” Gateway

Laptop TabletSmartphone



When you opt to implement an ESS and/or MSS portal through which individuals can retrieve critical data, you

can expect to experience a number of benefits across your organization. In addition to lessening administrative

support, an organization can directly impact the work/life balance for individual employees.

The immediate access to employee information, by the employee and his or her manager is a needed capability.

A manager must readily have all pertinent data on an employee’s skills, competencies, training needs, goals,

specific objectives, performance, salary and any other points of data that will enable the manager to be effective.

Additionally, employees expect that they will have direct access to and interact with their own data, to the point

of direct queries and immediate feedback.

Without such direct and easy to use tools, today’s workforce who are used to smartphone apps and related

behaviors, can easily opt out of an organization. They become dis-engaged and seek other employment

alternatives – just based on the perceived value of what they interact with on a daily basis.



The More Strategic HR: A Vision

In becoming a strategic partner providing value added actionable information that supports the overall

organization, offering insightful support to the strategies and vision of the company, HR ’s role becomes more

critical than ever before.

Aided by technology, today’s HR has a positive impact on business alignment. It can assist in getting all five

of your key success drivers – people, processes, technology, structure, and culture – in allignment which

enhances organizational capabilities and drives performance. This alignment has a “domino effect” as each

program builds on the success of others, and the reputation of HR increasingly becomes that of a value added

strategic partner.

However, for all this to be effective, HR must also understand the organization in which it is a part.

No longer should HR executives think only of HR initiatives.

The need exists for HR executives and staff – at every level – to understand the mission and vision of the

organization and its looming strategies and organizational direction.

HR must know the industry in which they are working, be it Manufacturing, Healthcare, Finance etc. And

importantly, HR must anticipate the information needs of the Executive level if not the Board of Directors.

The figure below shows some of the concerns of the C-level executives as they strive to steer any organization.

Their concerns are certainly not solely focused on the workforce itself, although it is an important component.

Additionally, the Board and any Executive Team expect to achieve “Value” from the function of Human Resources

or Human Capital and its senior leadership.

That value is attributed to control of the factors shown here:

Administrative efficiencies resulting in cost reduction Leadership developmentOverall alignment with the organizations’ strategies, mission,

goal and vision.High service quality to all customers (stakeholders)ResponsivenessRisk Management Talent management, identification and acquisition, and a

pipeline Effective leveraging of technology to all appropriate functions

within the realm of HR, Payroll and Benefits

“VALUE CREATION”!

CEO, Board & Stakeholders expect…



How to present “value added information”… not Data

Today, simple spreadsheets and most “Ad hoc” reports are too limiting to present “information…not data” that your

key stakeholders, Boards of Directors, and CEOs are looking for.

As stated in Fig NN… Executives and Boards would welcome “information” that enables actionable programs

in support of a company’s strategies. Only pieces of what they seek are directly related to the workforce. Key

Performance Indices are an important measurement of the company, and their makeup varies from industry to

industry and company to company.

The more HR executives anticipate and understand what types of information is sought, the better they can

build the outputs to display appropriate information. These will be in the form of various charts and trends – all

classified as metrics. Not all are related to the workforce. However, many do rely on some manner of workforce

statistics, as direct employee staffing information is incorporated into any metrics related to the performance of

HR programs.

Here is a brief list of the types of information Boards, C-Level executives and Senior level Advisory Committees

seek to interpret which will lead to strategic initiatives:

Products and cost of production

Overhead

Economic indicators

Organizational financials

Organizational structure

The workforce and its utilization

The marketplace Competitors Acquisitions and mergers Research and development

Technology development Human resource programs

and measurement

Think this……..

Stakeholders & C-Level Executives want actionable information that assesses…



Clearly, these are just broad categories of strong interest to senior executives. Being more specific, consider the

following as 3 strategic based inquiries by a Board of Directors to an Chief HR Officer (CHRO):

� Who are the key people in the organization, and how do we know that they’re performing so well? What,

specifically, are they doing that stands out? How good are they, and how are we measuring this?

� Compared to our competitors, are we paying them too little or too much? How do we know? Should we

lose one of these key contributors, what is the succession plan?

� How much would it cost to reduce our headcount by 10% while also retaining our top performers? What

type of impact might that reduction have on our ability to stay competitive in our industry?

Earlier in this paper, we talked about how HR is evolving or moving from “data management to information

craftsmanship”. “Craftsmanship” in this sense, refers to the manipulation of underlying data to “craft” a point of

information that proves to be a prediction of a future state.

That “future state” can typically be derived from the appropriate historical data which would then be treated to

an arithmetic projection model, such as a regression analysis. For example, looking at historical rates of turnover

over the past X years (calculated by “termination date/reason” and grouped by variables such as department

and geography, leads to a specific rate. Then taking current population data and using a regression analysis

calculated against the historical rate an approximation of the future headcount can be arrived at. This look into

the future via a projection, can then lead to any number of initiatives that are put in place to increase or counter a

predicted outcome.

A Few Critical Key Performance Metrics/Indices

In any organization, or any business, large or small

the Owner or Board of Directors seek the answers to

very broad but important questions. Here are a few:

� What is the overall condition of the

company? of a specific Business Unit? of

the Workforce (Human Capital) itself?

� Are we (the Company) meeting strategic

needs?

� Are we (the Company) delivering our

services in alignment with our corporate

strategy and direction?

� Are our customers’ needs being met?

� Are we optimizing our service delivery

process?



The Four Perspectives

An effective strategic plan or road map must consider these questions from 4 points of view.

They are:

� From the Customer’s Perspective: Executives will want to know how the company is being perceived

by its’ customers. A few goals and measures can be used to answer this question, including customer

satisfaction, sales trends, brand strength, market share, and customer loyalty.

� From the Growth & Learning Perspective: Executives will want to know how the organization will

continue to improve and create value. Measurements such as first to market percentage, number of

development activities, and percentage of ready successors may help to ascertain growth and learning

status.

� From the Internal Business Perspective: What is the company doing well? Compiling data presented

as trends related to compliance, workforce productivity, turnover rate, job fill rate, etc. will provide

“actionable information” to justify new programs.

� From the Financial Perspective: The leadership team of large organizations in reality, answer to the

body of shareholders and stakeholders. Financial data and trends such as Earnings per share, growth

revenue, budget accuracy, and profit/employee rates will provide an important picture of the overall

viability of the organization. Some of the metrics, although financial, do involve HR and Workforce

underlying data.



Which Metrics Should HR Measure?

In the previous section, we discussed a number of metrics and the ways in which they play a role in determining

how your company is being perceived from four important perspectives. As we discussed, HR alone may not be

responsible for measuring every one of the discussed Key Performance Indices.

Now, the following metrics can be considered to be developed and provided by the executives within the HR

function working with the owners of the HR technology:

� HR Operations & Performance: These metrics are important for Senior HR executives, as well as directors

and managers responsible for specific program deliveries and functionalities.

� HR Functionality Services & Programs: HR administrative specialists responsible for overseeing how

specific programs are adapted and utilized by the workforce are seeking these metrics.

� HR Technology Service Delivery: The performance and audit of the specific HR technology, including

the ongoing relationship with the providing software application vendor and the overall utilization of

specific features and functions, and the performance of periodic system maintenance and upgrades

is the focus of these metrics and are much sought by any organizations Manager or Director of HR

Technology/systems (HRIS).

The figure below lists specific metrics related to Workforce Management, also known as Human Capital

Management. Each is shown with the underlying data points needed to calculate.

Human Capital Revenue Factor (HCRF) Total Revenue / Full Time Equivalent (FTE)

Human Economic Value Added (HEVA) (Net Operating Margin – Cost of Capital) / Full Time

Equivalent (FTE) Human Capital Cost Factor (HCCF)

W2 Pay + Cost of Contingent Labor + Cost of Absenteeism + Cost of Turnover

Human Capital Value Added (HCVA) Operating Revenue – (Operating Expenses – Pay and

Benefits) / FTEs Human Capital Return on Investment (HCROI)

Operating Revenue – (Operating Expenses – Pay and Benefits) / Pay and Benefits

HR Operations & Performance Metrics



The Logic Chain: Why HR’s Metrics Are Indispensable to Better Performance

In summary, the providers of HR Technology have recognized the importance of providing their customers

standardized report libraries – many of which include graphical depiction of trends and are considered predictive.

The vendors have done the underlying arithmetic and have been able to deliver output beyond providing a

simple, effective user experience within Manager Self Service (MSS) of an ad-hoc report generator.

By using underlying HR Technology the function of HR can position itself as a strategic business partner within

any organization, of any size and complexity.

Assuming all the data is accurate, and there is a good amount of historical date sensitive data for all of the basic

employee and HR lifecycle transactions, HR has to greatly benefit by implementing any number of technology

solutions within the large realm of Human Resources Management.

Making a strong case for the critical nature of HR Management and its needed use of technology is based on

these underlying statements of premise:

� Metrics and analytics emerge from the data maintained by an HR data master file.

� HR can produce a predictive analysis for each of the KPIs that align with corporate goals, presenting

them to leadership.

� Managers can make better decisions based on the trends and predictive analytics provided by HR.

� These better decisions should have a positive impact on the company’s goals and strategy.

� Achievement of goals and strategies, and subsequent creation of more ambitious goals, adds value to

the company.

� Value creation leads to improved efficiencies.

� Greater efficiencies lead to improved company performance in terms of revenues, sales, profit/loss

ratios, and stock price elevation.

Of course, achieving improvement is not an endpoint. Once executives begin to take for granted the power of HR

technology, and HR’s ability to harness or leverage that power within a reasonable cost level, the demand for

more information, metrics, and workforce analytics will only increase. Thus, a productive cycle is created in which

HR’s new, evolved role is both as fundamental to the success of the organization but also that the function of HR

is needed as a strategic business partner in all aspects of the corporation.



Resources

HRsoft is a cloud-based, High Impact Talent Management™ software

company that specializes in improving employee engagement

and retention for mid-large sized employers. Our High Impact

Talent Management System™ includes modules for compensation

management, applicant tracking, management software, total rewards,

stay interviews, and content management.

Phone: 866.953.8800 | Email: [email protected] | Web: http://hrsoft.com

About the Contributor

Marc S. Miller | President & Founder, Marc S. Miller Associates

MARC S. MILLER : is a nationally respected thought leader, consultant,

speaker and author on HR Technology. He has over 35 years experience with

all aspects of technology solutions for Human Resources. His consulting

firm, together with his industry visibility, has made Marc S. Miller one of the

HR Technology industry’s most recognized voices. Marc has been a featured

speaker and presenter at numerous HR and HCM technology meetings both

industry focused and at many HRMS providers User Conferences. His blogs

and webinars are always well viewed and attended. His recently published

book, “HeroicHR”, now in its Second Edition, is in high demand.

mailto:[email protected]

http://hrsoft.com

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