Transformation in the Human Capital Management Terrain
Without a doubt people are any organization’s most strategic asset.
An organization’s ability to attract, recruit, retain and develop people has always been crucial for two reasons: delivering short-term productivity, and building long-term competitive advantage. With time, while the importance of talent has not diminished, the availability of solutions (both technology and services) to enable Human Capital Management (HCM) processes has dramatically evolved.
Today the writing is on the wall. Advances in technology — such as cloud delivery, mobile applications, social/collaboration and analytics — are enabling totally new capabilities in organizations. It covers a wide spectrum including real time peer feedback, virtual recruiting and predictive analytics for critical indicators such as flight risk, joining ratio probability, attrition modeling, engagement and career development.
Advances in the tech landscape are causing the solution and vendor landscape to rapidly evolve as well. As HCM solutions evolve to support a broader set of HR processes, complying with digital ethics and ever-changing data privacy regulations will become more critical as well as challenging in the future.
Since much innovation can be seeing coming from more nimble emerging providers, buyers have the added complication of whether to deploy the HCM functionality delivered by their ERP provider, implement a multifunction HCM suite, and/or select supplementary point solutions.
Points to ponder
The question has thus has moved from debating the importance of HR Tech – to overcoming challenges to successfully assemble, integrate and manage a portfolio of HCM solutions. The goals include significant improvements to workforce efficiency and effectiveness and thus improve business outcomes.
Here are some of the significant questions companies must work through to arrive at conclusions.
How to create an HCM technology strategy to support HR transformation?
HR leaders are transforming HR operating models in response to the changing business environment, volatile labor markets, and evolving organizational needs. Add to this the complexities of a digital workplace.
HR service delivery increasingly blends automation, content and human interaction (often by combining technology and outsourced solutions) based on variables such as required skills/competencies, employee types, geography and demographics. Thus, HRIT leaders need to review their solution strategies at least annually within the context of the organization’s overall business application strategy and strategic operating plan.
By doing this they will understand that HCM technology strategy is not a one-size-fits-all project. And evolution will be the smartest way to approach it.
Will new analytic technologies and use cases support HCM strategy execution?
Progressive leaders are focused on ways to accurately measure and increase employee engagement – while optimizing overall HR cost per full-time equivalent.
They want to manage the efficiency and impact of HR policies and practices. They assess the organization’s health and culture by combining both formal and informal networks to gather data and enable effective analysis. These initiatives, along with the growing amount of information collected about employees in connected workplaces, are driving demand for improved workforce analytics.
As new analytics capabilities and technologies emerge, it is imperative for HR and business leaders to contemplate how these new insights can be used to drive business performance, both within individual business units, and across the organization.
How can leaders optimize their investments in HCM applications?
Adoption of HCM technology is increasingly common across all industries and regions.
Successful HCM technology deployments require organizations to consider a number of variables that go beyond the technology itself. Often, organizations overlook things like workforce demographics and corporate culture, the definition of end-user success, current team dynamics, employee engagement, and the timeliness and fluidity of social interactions.
HR and HR IT leaders will need to consult with experts to identify the best potential ROI for their HCM solution business case while avoiding decisions that are likely to result in wasted resources and/or underperforming software assets.
The dynamic and rapidly evolving HCM solutions landscape has created an equally dynamic market that fosters a regular stream of new challengers and heavy pressure on players.
HCM solution vendors are aggressively investing in new technologies to gain differentiation and thus a competitive advantage. Consequently, HR and HRIT leaders should seek to define what benefits the new capabilities deliver, when it makes sense to invest in them, and how to evaluate vendor solutions for suitability.