The technology revolution has swept away most vestiges of the old ways of business. But not all. Now the HR department is about to be disrupted, writes ARTHUR GOLDSTUCK.
There is hardly a mainstream business that has not been transformed by technology, yet the management of human resources (HR) remains stuck in early 20th century mode.
This is ironic, considering the massive emphasis placed on young workers and the new generation of job-entrant. The problem is that buzzword are being used to paper over the cracks in the system. The term “millennial” has become a convenient byword for describing this new kind of employee, despite the fact that the 17-to-37-year-old age group it defines is utterly meaningless.
The result is that, while tremendous effort is made to attract young talent, little is done – outside youth-oriented brands like Google and Facebook – to retain them. Performance measures and reward systems may well be in place, but little is done with the huge amount of data collected in the process, and little effort goes into understanding what makes employees tick, and what contribution HR can make to the business.
Yet, in the age of big data and artificial intelligence, human resources should be given as much emphasis as sales, marketing and the customer experience – currently the obsession of most big businesses.
This gap explains the massive growth of a business like SuccessFactors, which provides human capital management software solutions via the cloud. Listed on the NASDAQ exchange in 2007, it was acquired by SAP in 2011 and now serves more than 6 000 companies and 45-million subscribers across more than 60 industries.
“A lot of people believe on-boarding ends when someone is sitting in their office,” said Stefan Ries, chief human resources officer of SAP, opening last week’s SuccessFactors SuccessConnect 2017 conference in London. “It doesn’t stop there. You need to check it after 30 days, after 60 days, after 90 days.”
Ries was brutal in his assessment of the failings of HR. But he was equally frank in what needed to be done, providing a roadmap for businesses that are ready to evolve in the way they manage employees. Even those who have moved from thinking of staff as customers had not caught up to the way other areas of their business were being disrupted.
He outlined the five key elements that matter most in the new HR roadmap:
“HR needs to deliver much more experience. Stop calling employers and managers customers; they are consumers. It’s not only about employees, but also managers, contingent labour, the retired workforce, as well as new candidates. They all want to have a consumer experience. It’s all about usability, simplification and performance. We need to think and act as if we’re in a consumer business, and we must be ready for the next big thing: mobile and conversational HR.
“We in HR need to measure much more strongly our impact versus the activities we are performing. Within the cloud environment, you need to deliver HR services anytime, anywhere, on any device. If you can’t do that, you won’t attract talent from the younger generations. We have to understand how cloud services can help us to have high employee engagement and to be a more attractive employer of choice.
“We need to continue to get much more fluent in data analytics. We have the tools available. We are hiring data analysts in HR, and that job description didn’t exist four or five years ago. Integration of machine learning is very important, but it’s not in isolation or separate; it must be fully embedded.
“How jealous are we of the finance department? Business loves them because they have the numbers that define the business. We need to work hand in hand with them, and our numbers must be seen as an important business metric. Sales, marketing, finance and HR must all come together to enable us to make the right business decisions.
“Social media and social commitment really matters. In the solutions we offer, we must capture the needs of the younger generation. They are much more embedded in the social media environment. These generations have a clear determination in their minds that they need purpose in their jobs. What can they do to help the company make an impact and improve the way we live on this earth? We must continue to invest in corporate social responsibility.”
Later, at a media briefing, Ries offered the flip side of the coin: how to look after the older generation that may feel left behind by digital transformation.
“On the one side you’ve got to listen to the younger generation, but on the other side have to pay attention to other generations. You have customers out there with managers and leaders in their 50s or 60s who may say, ‘Why bother?’
“They will bother if they see the benefits, that they have to work for another 10 to 15 years and can experience the advantages of the new approach. And at home they are confronted with the same challenges with kids or in the broader family. The magic word is integration.”
A company that seems to have got it right is the venerable automotive brand, Jaguar Land Rover.
“We thought we would have a lot of rejection of the whole concept, so we geared up for putting out fires, and over-supported people through the change,” said Jon West, the company’s director of manufacturing HR and employee relations.
“Actually, we found that there was a high level of acceptance,” he told media at the SuccessConnect conference. “A significant amount of people in the organisation – forty per cent of employees – are older people who’ve been with us for a long time. But over time we brought in a lot of new people, and they were expecting this new approach. We’re lucky we have such well-established, premium brands, and we have to make sure our HR practices do the brands justice.”
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