HR Technology in 2018: Opportunities, Challenges and the Future

Based on key insights we gleaned at this year’s SHRM HR Tech ’18 conference, here is how we think HR is responding to the digital transformation challenge.

Digital HR is all the buzz. With over $14 billion invested globally in HR tech this past year, it is worth asking if all this technology can really deliver on its lofty promises. This was a consistent theme throughout the SHRM HR Tech ’18 conference held in Hyderabad, India last month. Most large global HR Tech players were represented at the event either as speakers, panelists or exhibitors – and needless to say, most large global brands were present, with a huge delegation of very progressive minded CHROs and CPOs leading the discussions!

Digital transformation, HR technology and Culture

**Shifting gears towards digital HR is something that requires a fundamental rethink of core organizational processes and the way employees interact with work**. Vineet Nayar, Former CEO of HCL, said organizations could embrace this mindset by ‘innovating’. He said HR needs to prepare for “Unstructured work, excellent work hours, and innovation platforms – getting innovation crowdsourced within the organization.”

A function that was historically rooted in compliance and transactions, HR has come a long way. “HR leaders are now talking business” said Prasad Rajappan, Managing Director at Zing, an end-to-end HCM solution. As automation takes over the transactional needs of the HR function, professionals can now focus on achieving strategic business outcomes through their human capital, versus just viewing them as resources.

Study after study has linked engagement levels and the overall employee experience to business unit performance, financial performance and, productivity. And, in order to achieve these objectives, HR needs to have a clearly defined digital strategy in place.

“HR Technology lags rest of the technology in general. **HRTech was primarily based on technology that was designed for the organization, not for the employee**.” That is changing now, as HR leaders embrace a people-first approach. “Employees are now more used to tech that was designed for them in the rest of their lives” argues Niel Nickolasien, Chief Technology Officer at O.C. Tanner. He said “What I want as an employee is to better manage my career. I want the organization to help me better manage my career. Give me some opportunities, provide me with feedback, so I know where I might want to go in my career.” In other words, employees expect to be treated like customers by employers. Undoubtedly, employee experience and engagement was a major theme for discussion by all stakeholders at the event.

Most HR technologies available in the market today are not employee-centric but are organization-centric, and therein lies the problem. Oftentimes it is HR’s responsibility to purchase technology. HR is the buyer. However, the end users of this technology are employees. Too often HR technology is implemented without scrutinizing how these users normally behave, how they will benefit and how they will interact with the technology. “The closest thing (to employee-centric technology) we found was a succession planning module in an HRIS – where the organization identifies the people they want to develop rather than the person identifying the path that they want to pursue. And to me, that sort of represented this organization centric approach to HR than an employee-centric approach to HR. The problem is, that all the apps and everything I do is individual and then I come across this HR technology which is counter to individuals” said Niel.

Speaking about how HR teams can play a pivotal experience in creating digital experiences for employees, Kshitij Kashyap, VP of Human Capital at United Health Group, said “Digitally, we’re all very savvy at a personal level. The amount of disruption that digital is bringing into our lives whether its shopping, retail, social, or even our kids, it’s bring a lot of changes in the way we think and work. Most organizations want to move into a digital environment. There’s no two ways about it. Now, depending on how big, small, agile, so on and so forth you are, you have your own journey. You’re looking at two years, three years or five years in becoming completely digital. As a human capital leader, I see a huge opportunity. But as the business is transforming, how you – as HR – create a digital experience for your employees will determine success in the long run.”

Kshitij believes, more than anything, **HR needs to change its perception about embracing digital transformation**. “If you were to look your personal technology stack, where does email figure? Maybe five years back it was on top of your stack, but today its at the bottom of the stack. People create VIP labels and only look at that (inbox). Now let’s look at the workspace. You want people to communicate, but what is the content that you’re pushing there? You’re still operating on emails. Most of the policies are being communicated via emails. More than the technology, there needs to be a mind-shift or a culture shift to adopt digital within our workplaces.”

HR technology adoption, challenges and change management

**HR leaders today understand the function’s impact on the business’ topline. They’re no longer focused on cost-cutting, they’re looking to solve real-world business problems through HR technology.** Speaking about the key parameters HR leaders look at before making a purchase decision, Kshitij stated, “We look at the complete scope of implementation. For instance, we saw rewards as a big piece, so we introduced a rewards solution, working with a local partner. That was three years ago. Corporate saw it as a big opportunity and they said they’d adopt it across the entire organization. The framework remains the same, but the regional context changes.”

CHROs also place a great emphasis on linking their HR tech investments to business outcomes, usually quantified to the last dollar. Qualitatively, HR leaders are focused on improving the overall culture of the organization through HR technology. Niel believes experience and culture are set to be new competitive advantages and HR leaders should look at technologies to build great workplace cultures. He noted, “I would ask myself, what are the opportunities to improve attraction, retention, and development of my employees. What do I need to do better attract new employees? How complex or difficult is my onboarding processOpens a new window ? How difficult is my recruiting process? How can I use technology to create better experiences and address all these gaps? Let’s say a candidate has a terrible experience with the recruiting process. because the tech is so slow, so difficult to use, that it actually sends a bad message about what their employee experience is going to be like. What about retention? How easy or simple is it to get feedback? How easy is it to understand how well I’m doing?”

As an HR professional you’ll most likely experience at least one – if not several – HR technology implementations throughout your career. HR tech deployment affects every part of the organization. Once you’ve zeroed down on the best fit solution for your organization’s need, you need to carefully access and review your change management framework. “Don’t provide technology unless there’s a change management framework in place” warns Prasad Rajappan. Achieving success with HR tech doesn’t stop at purchasing a powerful software or tool. **Technology needs to be deeply entrenched in the organizational culture, and it doesn’t have a start date and a stop date, it’s an ongoing process**.

Managing change on the people side of a project is crucial to achieving your desired outcomes from your HR tech solution.

Kshitij feels HR leaders need to ask themselves “what is the real change and how do people perceive that change?” He says, “Let’s take digitization for instance. Seventy to eighty percent of the people won’t know what kind of change digitization will bring. One of the conversations you have with your fellow HR professionals is – what is digital going to do?  Will people lose jobs? What’s going to happen there? I see it in a different way – digitization is going to be there. One is going to be assisted automation – you would automate processes, but you will still need assistance to work; and then there’ll be certain areas that will be fully digitized. And in both cases, there will be a reduction of workforce and in some areas, there will be elimination of workforce. So, as an organization if you were to look at a change management process, you need to ensure that you’ve got a right upskilling program, you’ve got right job profiling, and then you look at what are the best career paths that your employees can take, so that at least the knowledge capital that you’ve built over the years is not lost.”

A well-designed and carefully-executed change management plan will help you eliminate confusion and resistance, and will encourage faster, greater, and happier rates of adoption.

What’s next in #HRTech?

Industry events like SHRM HR Tech ’18 are an ideal place to feel the pulse of the latest innovations, trends and offer a glimpse into what the future holds for HR Tech. We asked a few HR leaders about the one piece of technology that they believe will have the greatest impact on the HR Function.

Brad Boyson, Executive Director at SHRM MEA, said he saw a lot of promise in augmented reality.

“It’s hard not to use the buzzwords that everyone’s using – Artificial Intelligence and Machine Learning, but true to the definition of augmented reality, I think that’s the one. There are six different measures of AI, it’s a skill. And AR, I know from my practitioner work, that there’s a real opportunity for augmented learning. If we can take that immersive learning experience and apply it to other fields, everywhere from retail to hospitality to banking, I think there’s a real learning opportunity. I see a future where we incorporate AR into learning intervention. Think of an assessment for a job – instead of having a job interview, you say, ‘here put on the goggles and go through this workplace experience.’ We coach HR professionals and recruiters in what are the best practicing in interviewing, to get the best information from the candidate. Things like behavioral or situational interviews can go one step further with AR. The complete experience is the best assessment, and right now we just use words to simulate that. As we move closer to more simulated assessment processes, it will certainly be a big opportunity for HR”, he added.

Kshitij Kashyap from United Health stated he saw a great deal of potential in AI enabled video interviews. He said, “A major opportunity that I see is, essentially the whole physical interview location – behavioral, psychometric, and even functional interviews being automated AI enabled video interviews. For instance, a doctor who’s studying autism, will need to observe a patient for 30-45 mins to determine if he is autistic. AI and automation can enable the doctor to study the interview frame by frame in 15 mins to determine the same. AI and assisted automation will greatly cutdown on this time spent assessing candidates.”

In summary, a well- developed digital HR strategy requires a cultural mind shift and a sound change management framework. While we hope that the promise of digital HR is realized by key stakeholders, the reality is that change is difficult, and some organizations will struggle with it. The goal for organizations looking to embrace digital HR is to make small changes that speak directly to individual employee and the impact of which lasts well into the future.