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TCO: The Hidden Costs of HR Technology

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Over the past year, the pandemic forced most organizations to re-evaluate their HR technology to better support their workforce in a new work environment. It’s easy to see how these solutions impact expenses, regardless of whether your organization has grown or downsized and whether you’ve implemented one, two, or more new technologies. But upon further examination, you may find additional costs that you don’t see on a balance sheet. These downstream costs come in the form of voluntary turnover, disengaged employees, and a poor employee experience caused by disjointed systems. All of these add to the Total Cost of Ownership (TCO) of your HR technology stack.

Don’t get me wrong, these shiny new systems have the best intentions and also hold the potential to streamline processes and improve efficiency. However, they can cause confusion, digital fatigue, and an overall negative employee experience when brought together. This article will examine the cascading costs caused by competing HR technologies and shine some light on the TCO of those platforms, tools, and programs.

Multiple Buyers, Multiple Priorities

HR technologies span a broad spectrum of applications. PwC’s Human Resources Technology Survey estimates the total value of the HR cloud solutions space at a whopping $148 billion. You have solutions for time and labor management, talent development, benefits administration, payroll, HR administration, and the multiple use cases that fall underneath each of these. Filling the needs presented by your organization can result in a slew of point solutions patched together, ostensibly to support the employee experience. But are they actually improving the employee experience?

The problems often start with having multiple buyers working to get these solutions in place. Too often, organizations arm each buyer with a different agenda and different initiatives. Each has a keen eye on their own goals and what technology they are bringing in-house. But with multiple buyers in the mix, the bigger picture is often overlooked. And the bigger picture can be what makes or breaks the employee experience.

What is the bigger picture? It’s the TCO of the whole HR technology stack and how these solutions work together.

Too Many Channels, Not Enough Bandwidth

Throughout the workday, employees change directions more than a weathervane in a tornado. They constantly switch between systems to communicate, track time, view benefits, take a survey, complete a learning module, and—yes—even get some work done. It’s simply exhausting. Also, that only covers a few of the functions within the sprawling HR tech stack. Thinking about it gives you a headache, doesn’t it? Or perhaps, that’s digital fatigue you’re experiencing.

Moreover, we’ve seen (and continue to see) a race to upskill and re-skill, a trend that has created the need for even more learning and development, coaching and mentoring, surveys, and other tools meant to support employees. The increase in the number of people working remotely and forcing interaction with these disjointed technologies from home has exacerbated the situation. Also, while pushing forward with upskilling and re-skilling, only 12 percent of employers plan to reward employees’ skill acquisition. The current rise in voluntary turnover is kind of a no-brainer. People work harder and longer at home. They stretch themselves to learn new skills and take on new roles–for no reward.

The Effects: By the Numbers

We know the competing HR systems and the subsequent chaos they cause result in a poor employee experience. But what exactly does that mean for your organization? And what does that cost? Now we’re getting to the TCO of HR technologies.

Burnout

Experts estimate that the healthcare costs of job-related burnout are between $125 billion and $190 billion. Once employees reach burnout, it’s often difficult to hit the reset button and get them back to their optimal performance engagement. Thus, voluntary turnover is often what lies next.

Voluntary turnover

With the average cost of hiring a new employee at $4,129, and onboarding averaging roughly $986 per new hire, organizations lose $5,000 each time an employee leaves. That doesn’t even account for the costs of the skill sets you’re losing, and the loss of the intrinsic value an individual brings to your organization. You can’t afford to lose your employees to something so preventable as integrating HR solutions.

Disengagement

Disengagement costs companies between $450 billion and $550 billion each year. Yikes! And considering one-third of most employees consider themselves disengaged, organizations must work to boost engagement. Among the several levers you can pull to boost engagement, streamlining your technology is a relatively easy move.

Management tax: Add it to the tab

The struggle of dealing with too many solutions is not one-sided. While employees grapple with multiple systems each day, managers work to pull data from each of those systems, manage vendor relationships, and learn each solution from top to bottom. Managing a sprawling tech stack is a huge distraction and can easily be minimized by combining point solutions to a larger platform.

Streamlining HR technology will make life simpler—and more productive—for managers and employees. Of course, bringing these solutions together can also be more cost-effective for an organization. Which means you don’t need to eliminate existing systems altogether. Just simplify your systems. How? By integrating and combining forces. A lot is riding on this—more than you see when usually assessing TCO.

With this in mind, adopt an integrated approach that combines talent functions to create a more fluid experience for your people. Do it for the employee experience, higher productivity, and a better bottom line. When evaluating the number of technologies in your organization, less is more.

Image by Shao-chun Wang

Digital Fatigue: How to Make Technology Work for You, Not Against You

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What is digital fatigue? And how does it impact your business and the people who work there?

Think of how many times you interact with technology each day, whether that interaction was intentional or not. Technology is ingrained in our lives, both personally and professionally. But you don’t need me to tell you that. You also don’t need me to point out that despite the simplicity and positivity it brings to our lives, it also brings stressors and pain.

One of those stressors and pains is digital fatigue.

Just as many of us are experiencing pandemic fatigue, digital fatigue is very real. For many, the multiple systems we all interact with during a day’s work only exacerbate the situation.

Surrounded by Screens

In the past decade, technology has transformed our personal and professional lives in many dramatic ways. The apps and technologies we have access to have generally made our lives much more comfortable and productive. This includes but is not limited to how we communicate, and consume and process information, and how we innovate. Technology has also transformed how to learn new skills, buy and sell, work — and stay healthy.

But not all that glitters is gold. Or, in this case, not all that pings is good.

In our work environments alone, we have surrounded ourselves with screens that continuously push a stream of messages that demand our focus and attention. Emails, social networking, communication apps, kanban boards, video conferencing tools — the list goes on and on. Just thinking of one workday and the multiple mediums you interact with is enough to make your head spin. Not to mention what you use across the entire employee life cycle from pre-hire to retirement.

Even when we step away from the large screens, we carry one or more small screens with us in our pockets or purses. When not at work, we are already conditioned to constantly interact digitally. This proclivity for accessing our new technology sidekicks has resulted in many of us suffering from a malady called digital fatigue syndrome.

Digital Fatigue

So what is digital fatigue?

If you are like me, you are already checking WebMD to see if your symptoms line up with this condition. While a fairly new term, the label gives us a very clear indication of what digital fatigue is.

Vogue recently quoted a holistic wellness practitioner as saying: “If you find yourself with sore, strained eyes, more headaches than usual, and you’re suffering from poor posture or increased neck and shoulder pain, chances are you might be suffering from digital fatigue.”

Let’s face it, we don’t need this list of symptoms to tell us when too much time spent in front of a screen is making us tired. That’s it, folks; we are just tired of spending so much time in front of our screens. Beyond making us physically tired, it’s taking a toll on our well-being.

Thankfully, Vogue also added a little more science to the definition when it said, “Sleep deprivation is a key factor in digital fatigue, since an excess of screen time (and a lack of much else) can suppress the ‘sleep’ hormone melatonin, disrupting our circadian rhythms (or sleep patterns), and reducing REM sleep. All of this adds up to make us much less alert come morning. Much of it is to do with the blue (or high energy visible) light that is emitted by screens — from phone to laptop to television — which affects how our cells react, inhibiting how much melatonin they produce.”

The Pandemic’s Impact on Digital Fatigue

The pandemic has not helped. In the past year, we have all spent more time than we are used to on our technology devices and digitally communicating with the world. According to a Salesforce article, 42% of the U.S. labor force continues to work from home full time, we have heavily increased our reliance on our devices to keep us working, connected, and entertained. In fact, the average time spent with digital media is moving toward 7.5 hours per day.

Believe it or not, even millennials — the digital-natives and technology-trailblazing multi-taskers that they are — are burned out! In a recent HBR article, one of these self-identified millennials says, “My generation — the millennial generation — have proven to be great candidates for this terrible phenomenon (burnout). The pandemic isn’t helping. Without clear boundaries between the office and our homes, more work is always available, and only a hand’s reach away.”

Tidying Up Your Tech Stack

So you might be asking, what is the solution? We cannot simply eliminate screens or technology from our lives, so are we all doomed?

While we cannot remove this “necessary evil” from our lives, we can streamline it.

Combining technology into fewer platforms and channels for your employees will make their lives much easier. It will also make technology less of a disruption and focus blocker — and more of an aid (as it is intended to be).

Take inventory of the different platforms you are using. Is there any overlap? Any ability to combine forces or bring things under “one roof,” so to speak? Chances are, there are some areas where you can consolidate. For example, perhaps you can provide your employees:

  • A one-stop shop where they can take surveys to provide their managers with feedback
  • Recognize their peers (or get a much-deserved shoutout themselves)
  • Access learning tools along with values and culture reminders

This consolidation would boost engagement and minimize confusion, and you guessed it — digital fatigue.

The good news is, many HR technology solutions can help you with this consolidation effort. The bad news is, many HR technology solutions can help you with this consolidation effort. In other words, you may need to spend some time comparing and contrasting options to find the best fit, but at least you don’t have to reinvent the wheel.

Keep It Simple

Ironically, this brings us back to where we started — technology. Too much of it can lead to burnout, but just the right amount can make our lives a lot easier.

The bottom line is that HR leaders must minimize the distraction of too many technologies. It is costing your organization and is increasing the rate of burnout. As we are all well aware, screens are here to stay, so let’s streamline and simplify.

Consider these wise words from the German-British statistician Ernst F. Schumacher:

“Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.”