Top 5 Reasons HR Is On The Move

Once upon a time, most HR departments provided one-stop shopping for employees with questions or concerns about benefits, hiring, training, complaints, colleagues, etc. For leaders, HR was the place to go for recruitment, retention and terminations. HR is a critical function and most companies handled it in-house. That’s all changing very rapidly. Today an estimated 58 percent of large companies outsource all or part of their HR needs.

Is this a good thing or a bad thing? Neither. Like everything else in business and talent management, a one size culture fits no one. The key is to develop a strategy and solution that works for your organization.

Here are the 5 top reasons so many companies are turning HR over to outsourced experts:

1)  It frees them to concentrate on core competencies. HR does not produce a product, yet it can eat up a lot of an organization’s time and energy. A great HR department demands resources and continual oversight and innovation. Many organizations would rather focus on their core strengths and/or moneymakers by outsourcing HR.

2)  It saves money. Running an effective HR department costs bucks, sometimes big bucks. Many organizations do the math and just decide it’s not worth it. It also allows organizations to hire world-class specialists they could never afford to bring on-board permanently. This kind of virtual workforce will continue to find momentum.

3) It improves compliance. There are a whole lot of regulations out there these days. There is the constant threat of lawsuits for sexual harassment, wrongful termination, safety violations, etc. When you hire a compliance specialist, these headaches become theirs.

4) It improves recruitment. Recruiting top talent is an art (and a science) and a lot of HR departments are the equivalent of weekend painters. Many organizations would rather turn this critical function over a company that does nothing but recruit talent.

5)  It provides access to the latest tools and technology. The most innovative HR-services supplier will be up on the very latest technology, including big-data mining, analytics, virtual workforce leadership, cloud technology and social media, and will know how to exploit them to meet an organization’s specific needs.

Those are some of the advantages to outsourcing. But it carries some very real risks. First of all, you’re turning an integral part of your organization’s success over to outsiders. They have a different – and at times even conflicting – agenda than you do. Service providers have their own bottom lines, and sometimes the service they provide can be shoddy. I’ve seen more than one organization get saddled (at least for the length of the contact) with outsourced talent that is a bad fit. Finding the right partners is absolutely critical. Do your due diligence here – and then repeat it! Never be penny-wise and pound-foolish – you get what you pay for. And watch out for too many bells and whistles in any sales presentation. Know what you need and don’t buy anything more. I recommend that every organization retain a healthy HR department, even if it’s small and many of its functions are outsourced. Some consultants will not always care about your people as passionately as you do so it’s important to find talent who cares about your unique culture. In addition, when tough decisions on hiring and firing are being made, you want in-house expertise to help handle things. It’s still often the case that core strategy should be kept in house unless you have the right expertise and best fit.

Outsourcing has the potential to make your organization leaner, more adaptive, smarter and more profitable. However, it must be done with foresight, savvy and a secure understanding of what it will mean. Take your time and really think it through. And only hire the best fit for outsourced talent.

A version of this was first posted on Forbes.

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Don’t Have an HR Technology Strategy? Four Tips for Building One

Michael E. Porter, Harvard Business School professor, author, and expert on competitive strategy defines strategy as “the creation of a unique and valuable position involving a different set of activities” (1996). A 2012 article published in strategy + business explains that strategy is, “the result of choices executives make on where to play and how to win to maximize long-term value.” Both definitions emphasize the importance of making decisions aimed at creating long- term value for an organization.

Strategies exist at all levels of the organization; an HR technology strategy should be born of this and support the overall strategic objectives of HR and the organization. HR must take ownership of their HR technology strategy and ensure that it aligns with the HR strategy (which should be in alignment with the business strategy). Additionally, they should emphasize more than just efficiency and effectiveness as a driver for the adoption of technology and choose solutions with agility in mind to allow for future growth and flexibility while focusing on deploying solutions that meet the current and future needs of the organization is paramount.

  1. Take ownership of your HR technology strategy

Technology has changed the way HR does their job. In David Ulrich’s book, HR Transformation: Building Human Resources From the Outside In, Mr. Ulrich explains that HR needs to become a “technology proponent”. He emphasizes the importance of HR’s role in leveraging technology to improve efficiency, to connect employees, and the need for HR to leverage new communication channels (e.g., social media) to engage with their employees.

HR should be responsible for setting the HR technology strategy in partnership with IT, and both should work together to make sure that HR is approaching business problems with the right solutions. While IT can certainly help inform the selection process and partner with HR during the implementation phase, HR needs to take the lead. HR has the employee perspective and an intimate understanding of the practices that support an effective workforce.

The new wave of HR technology (driven by the growing popularity of cloud-based HR) does not require much heavy lifting, and the space is ripe for a few wide-eyed technically savvy HR employees to help shape the future of their function. Software-as-a-service (SaaS) platforms can be deployed much faster and are highly configurable. With SaaS, HR now has the keys to the technology and no longer needs to call upon IT to make changes to the software; enabling HR to quickly improve the design of HR systems and processes quickly to meet the needs of the business. To effectively own the strategy, HR must:

  • Understand technology and be able to liaise with IT on a regular basis
  • Lead the creation, implementation, and maintenance of the HR technology strategy
  • Understand how your employees interact with their work on a daily basis and how technology can be leveraged to support them
  1. Align your technology strategy with the key HR and Business Goals

Not having alignment to the business strategy is like putting up drywall without first framing the house. Without a shared vision or understanding of how HR technology supports the business, implementations will likely fail, and the full benefits of technology will never be reaped. The lack of alignment may even have negative repercussions for your organization.

To create an HR technology strategy or plan, it is imperative to become intimately familiar with your organization’s short and long-term goals (as well as those of HR), which means more than just reading them off of a PowerPoint slide. To gain a better and more holistic understanding of the importance of these goals HR should conduct interviews with stakeholders in their organizations that includes HR leaders, members of the executive leadership team and business line managers. The information and knowledge that can be gained from these interviews can add color and bring greater awareness of the strategic direction of the organization and the challenges that need to be overcome to be successful.

As is the case with any human capital management technology, no single application will drive effectiveness; rather it is important to align programs and actions that go together. Additionally, creating alignment not only provides a focus for your plan but also a means to assess or measure the success and impact of your strategy.

Aligning your HR Technology strategy should go beyond just aligning to the overall organizational goals but should also include alignment to critical business units. Creating a strategy that is aligned with multiple parts of your organization allows you to adapt to changes in the market better and ensure that you are focusing on the right things. To ensure alignment with the business strategy:

  • Understand the current business environment – internally and externally; know what forces are at play
  • Document the organization’s short and long-term objectives
  • Take stock of the unique needs of each function and critical business areas
  • Clearly understand how technology can/can not facilitate achieving your strategic objectives

However, merely having an HR technology strategy isn’t enough. Neither is having the best technology. What matters more and provides real differentiation is effectively executing that strategy. Effective execution requires having the right resources (software and human), creating a roadmap that is agile and change ready, and one that is focused on both short and long-term strategic goals.

  1. Build agility into your HR technology strategy

“Agility is the new currency of the economy” (Source: The Changing World of HR Technology: 2012 Report Card) and technology plays a crucial role in an organization’s ability to remain competitive and better able to deal with an ever-changing business environment. Technology that supports the management and development of an organization’s human capital needs to be agile enough to respond to both external and internal factors.

The strategy should be multi-year, spanning several years and be frequently revisited to assess progress. Continually monitoring internal and external business conditions and linking those back to the strategy is vital to remaining agile and ready to adapt when needed.

In most cases, being agile with workforce technology means – having it in the cloud and being able to reconfigure offerings quickly or switch technologies (neither is possible with perpetual licensed software or ASP providers (on/off-premise). Technological innovations, like software-as-a-service (SaaS), have the ability to make the world smaller and organizations more efficient. Through standardization of processes, SaaS applications can reduce complexity and take upgrades quicker. In a unified and/or integrated global SaaS system this can facilitate much greater simplification and enable the organization to react more quickly to the changing business environment.

By implementing SaaS (cloud-based), HR technology organizations can become more agile in the management of people, their most valuable assets. However, for some organizations, like Nationwide, taking a hybrid approach is the right way to go. As a result of heavy customizations to their PeopleSoft system, they decided to keep their HRMS on-premise while moving their talent management processes to the cloud.

Consider the following:

  • Implement technology that facilitates (not inhibits) the organization’s ability to change
  • Build in scenarios to factor in changes to both the internal and external business environment (i.e., downsizing, M&A, regulatory changes)
  • Create a 5-10 year rolling HR technology strategy that has yearly check-ins and evaluations as a part of the process
  • Select technology that is scalable and flexible; vendor dependability is an important factor to consider when selecting solution providers 
  1. Think beyond efficiency and effectiveness

For HR to be able to make a direct contribution to the long-term success of the organization the function must stop thinking about HR technology as solely a means to automate. Automation alone does not drive organizational success. Human capital applications that help to attract, retain and develop the right people, with the right skills and the right cultural fit are the things that can begin the strategic transformation of the HR function. To support strategic initiatives, organizations should be able to answer the following two questions:

  • How does technology enable the effectiveness and efficiency of our people, programs, and initiatives? Remember, technology is not the solution but rather an enabler (and in some cases a distracter). Focus on the role that technology plays in the management of your human capital and not on any one particular vendor or type of tool; keep an open mind as you begin to find the answers to all of these questions. Once a tool (or tools) has been selected, involve employees of all types to help identify which features make the most sense to implement and to assess how user-friendly the interface is and workflow is for all employees who will be customers of the system.
  • How can technology improve the effectiveness of how your organization manages its talent? According to research from the Institute for Corporate Productivity (i4cp) (see: The People-Profit Chain) high-performance organizations effectively manage talent by creating an environment that maximizes employee productivity and performance. High-performance organizations understand that success does not rely on the inner workings of talent management processes but rather by making better evidence-based workforce decisions via workforce planning and workforce analytics, and equipping managers (and leaders) to manage the workforce. Technology that supports rather than hinders the effectiveness of managing talent should be simple, easy to access (mobile) and allow for faster, more accurate decision-making.

Consider the following:

  • Employ HR technology as a strategic tool to help drive performance in your organization; not solely as a means to improve efficiency and effectiveness
  • Technology should only be implemented where it adds value (or where required by law)

Developing an HR technology strategy begins with taking a deeper look at business priorities and validating how current systems are and are not supporting the organization’s goals. This helps create a path toward synchronizing the organization’s priorities with the HR technology strategy. A successful HR technology strategy should be aligned to the needs of the business, agile, focused on strategic enablement rather than just efficiency and effectiveness, and should be owned by HR (in partnership with IT).

Recommendations for Building an HR Technology Strategy

HR Tech Strategy


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Are You Pulling Teeth to Reach Goals?

Your organization’s yearly goals surpass the company standards, but is it working? Sometimes we become so captivated in the process of building a training program that we forget to keep tabs on what’s working and what isn’t from employee to employee.

Growth is an important aspect of any company – those that are high growth organizations provide a 5 times greater return to shareholders than medium-growth companies. What steps do companies need to take in order to reach (and sustain) upper-level success? How can we better manage our end goals?

Looking beyond the training process

The training program is in place, what follows? Ask team members to track their own progress whether it’s weekly deliverables via spreadsheets or sharing accomplishments through tools like Basecamp. This allows employees to take control of their own development so you can manage them without micromanaging.

While micromanagers have good intentions of keeping their employees on task, it can lead to sour results; of the 60% of employees who say they were micromanaged in the past, 55% say it decreased their productivity and 68% it dampened their morale. Don’t drain your employees in all the wrong ways. Allow supervisors and employees to visibly run through everything that was covered over the course of the week by:

  • Briefing the two parties on what was completed
  • Displaying whether or not time was prioritized correctly
  • Seeking alternative routes for the weeks to come for better revenue
  • Tracking progress through ongoing projects

Requiring employees to display what they have done in a week can be an eye opener and a motivator. Online documentation is also a helpful way to track progress when reviews come around. When they physically type their accomplishments they see what changes need to be made in the future and what goals need to be reassessed for following weeks.

Don’t be afraid to simply… ask!

Give employees an opportunity to speak on what they need – what resources they lack or what they struggle with for example – allows the employer to step in and offer alternate routes. Believe it or not, employees want your feedback; 43% of highly engaged employees receive feedback from their employers at least once a week.

Each employee learns and develops differently which means each employee will need customized paces and tasks for their daily work. Give them the opportunity to assess themselves to see if they have hit personal goals or taken a role in completing organizational goals.

Setting reachable goals

At this point, the supervisor and employee can brainstorm new goals if past initiatives exceeded (or didn’t meet) expectations, or even find more effective tactics meet goals. This way, both have a solid understanding of short and long-term goals for that employee. It’s important to set reasonable goals for your employees that both parties agree on.

Don’t allow your employees to walk away with a new set of goals they know they can’t accomplish – but also be sure not to underset goals which can inhibit productivity. Joel Trammel (@TheAmericanCEO), author of The CEO Tightrope, said:

“One of the biggest mistakes I see companies make is not taking the time to go through the process of identifying the business fundamentals with employees. It is crucial that managers engage employees in a mutual goal-setting process. At the end of the conversation the employee must take ownership of the goal and agree that it is achievable and worth pursuing.”
Creating comfortable, open relationships between employee and employer, discussing professional goals, requesting weekly deliverables and monitoring trends throughout your company are all steps that can easily be implemented into every company for reaching the highest potential goals. Reaching goals within a team can be a three-step process: Define, execute and trace. See if what you’re completing is matching your pre-determined goals and reassess as needed.