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HR’S STRATEGIC SHIFT:HOW TO LEVERAGE HR TECHNOLOGY TO DRIVE BUSINESS RESULTS
Copyright © 2017 HRsoft Page 2
HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
Introduction
The many functions of HR have shifted and evolved over time. Today HR’s sphere of influence on overall
corporate performance is significantly more powerful, both administratively and strategically.
The utilization of HR technology affords HR professionals the ability to shift their historic focus from administrative
and data management to one of a value added strategic partner. This shift is called (by HRSoft and M. Miller) as
moving from “data management to information craftsmanship”.
By utilizing the features and functions within many of the marketplace provided HR sytems ranging from large
scale, fully integrated comprehensive HR/Payroll/Benefits to best of breed solutions focusing on only a few
specific HR functions such as performance management, time and attendance or recruiting, the HR function can
evolve to delivering more strategic information to C-level executives (including of course the CHRO), because
many of the heretofore HR administrative tasks are now in the hands of managers and employees themselves.
A more effective and strategic HR function will be enabled to do more workforce planning, interact with other
functional departments within the company and focus on implementing programs that will prove to add value
to the organizations bottom line. HR will be empowered to use the comprehensive software applications, and
its underlying data, to generate forecasts, metrics and predictive analytics that will have an enormous impact on
the operations and foresight to activities that will be embraced by senior management. It will lead to powerful
insights which, if presented effectively, will be valued by C-level executives and which should have a significant
impact on any organizations initiatives, goals, missions and performance.
This white paper discussion will review the following:
� How the Role of HR Is evolving
� How to leverage HR Technology to reduce HR’s administrative burden
� What a strategic HR function looks like
� What information is wanted by C-level and other senior management
� Which Metrics should HR strive to provide
� Why Metrics are valuable for improving an organization’s performance
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
Basic Personnel Services
Control and Compliance
Strategic Expertise
A very long time ago
A while ago Recently – last 5-10 years
Bureaucratic and administrative aspects of dealing with employees -PERSONNEL
Aspects of dealing with unions (1930s and 1940s in U.S.)
Dealing with discrimination and other US Federal Legislations - (1960s till present day)
Take a business perspective in compensation, benefits, recruiting and staffing, succession planning
Organizational effectiveness, business planning, workflow, best practices
Apply behavioral science knowledge for recruiting, evaluating, compensation, Training, change management and DO workforce modeling and forecasts
Administrator
Enforcer
EXPERT
Onboarding, Engagement,WorkforceAnalytics / Metrics /predictive analytics
Strategic Workforce / Talent Management
IMP
OR
TA
NC
E T
O T
HE
OR
G
HR’s Evolving Role
HR TECH
HR’s Evolving Role
Recognizing the Value of HR Today
Within the past 5-10 years alone, HR has undergone some significant shifts. Few things illustrate the way HR
has been viewed better than a comparison of two compelling articles, written 10 years apart. In 2005, Fast
Company published a cover article titled “Why We Hate HR.” It outlined all of the ways in which HR could be
improved, thereby prompting HR teams to take action and address the key components that needing fixing. Just
one decade later, Harvard Business Review published an article citing all of the ways in which HR was making a
strategic shift, thus providing more value than ever before.
While the attitude towards HR has improved markedly, there’s still a lot of pressure on HR professionals to add
value by their own initiatives and to help the organization build best practices that must inherently support
company goals and missions. This to be done while HR still maintains responsibility for many administrative and
governmental dictated filings and practices.
The chart below captures the evolution of HR’s role over the last half century.
Copyright © 2017 HRsoft Page 4
HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
Evolving Challenges & Expectations
In 2016, the Society for Human Resource Management polled more than 3,000 HR executives to identify their top
ten challenges. Here are the results shown in order of stated priorities.
Among these, were “transforming HR into a strategic partner”, “managing globalization”, “managing talent”, and
“managing demographics” (in particular, Millennials). These findings align with the ways in which HR’s role has
evolved.
Originally, HR representatives acted as administrators. They provided “personnel” services, including overseeing
the bureaucratic handling of employee relations. By the 1930s and 40s, the role had shifted to that of an
“Enforcer”: they were expected to maintain control and compliance, especially in terms of dealing with unions. In
the 60s, they become responsible for handling discrimination and other U.S. federal guidelines arising from EEO
and Affirmative Action laws.
Top 10 HR Challenges Through 20171. Managing talent2. Improving leadership development3. Managing demographics (MILLENIALS)4. Delivering on employee ENGAGEMENT5. Managing change and cultural
transformation6. Enhancing THE USER EXPERIENCE7. Transforming HR into a strategic partner8. Improving performance
management/rewards9. Managing globalization10.Managing work/life balance
Copyright © 2017 HRsoft Page 5
HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
With the proliferation of effective software in support of a majority of the functional responsibilities under
the overall umbrella of an HR function or department, HR’s role has altered and expanded, along with the
expectations of senior management.
HR executives are expected to act as “experts”. They are responsible for onboarding, engagement monitoring,
and providing forecasts to help management make decisions and implement the many programs that address
the SHRM top ten issues and more. In many cases they are expected to apply behavioral science knowledge
for recruiting, evaluation, compensation, training, and so forth. They must also oversee talent management and
apply business perspectives to benefits, compensation, and succession staffing, and other functions.
The effective use of HR technology must be oriented to add “value”. The “value” proposition must be effectively
communicated, (if not sold) by HR executives.
The chart below shows the relationship of how HR Technology features themselves can contribute to the value
proposition.
Employee & Manager Self-Service (ESS/MSS)
Forecasts & Trends via Dashboards
Web-Delivered: Time Capture & Reporting Performance & Career Development Job Posting, Recruiting, Hiring & On-
boarding
Web-based:
Work Group Collaboration
Workflow and best practices
Remote Location 24/7 Access via Mobile
Some interaction with Social Media sites
“Value” is Achieved with HR Technology…
Cost Reduction
Cycle Time Reduction –Processing Efficiencies
Improved Information
Full Compliance at all levels
Increased Capabilities & Functionality
Enhanced Employee Engagement
Data Quality Near 100%
“Big Picture” – Business Metrics Easily Available
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
HR must seek significant strategic influence. The technology at hand will enable them to move from a tactical
– administratively driven function to one of “Game Changing “ strategic involvement at the highest level of any
organization.
If the 5 components of any organization are taken into consideration, that of – People, Process, Technology,
Structure and Culture – as shown below in the second of the 4 dominos, and the appropriate capabilities and
talent exist, and metrics for measurement are in place, an organization will be positioned for financial success by
any measure.
HR’s Hierarchy of INFLUENCE/value
AnalyticsEvaluation
Engagement
IT & Telecom / Facilities & Security /
Workforce Mgmt & Planning / Labor Allocation / Procurement
Government Compliance:Environmental Mgmt & OSHA /
Social Media Policy and Procedures
Recruitment / Employment / Compensation / Benefits / Learning Mgmt/ Performance / Workforce Development /
Time & Attendance / Payroll / Regulatory Requirements
TACTICAL
ENTERPRISE SUPPORT
“GAME CHANGING”STRATEGIC INFLUENCE
Getting to “Policy andPlanning”
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
The needed transformation of service delivery: Leveraging Technology to Reduce the Administrative Burden
In order to achieve the overall corporate success, HR must be perceived as the strategic partner it needs to be.
This can only happen by implementing appropriate technology that, by definition, will reduce the degree of
administrative service delivery and allow an increase in strategic support.
IMPACT OF BUSINESS ALIGNMENT
Aligning HRto impact . . .
. . . Key organization success drivers to build . . .
. . . Organization capabilities that address business challenges to create . . .
. . . Improved business performanceand increased value
The 5 “success drivers”must be aligned from topto bottom: PEOPLE, PROCESSTECHNOLOGY, STRUCTURE andCULTURE
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
In the above figure, the classical view of HR’s role in service delivery is shown as the left side triangle (or pyramid).
Without today’s available technology, for decades, HR responsibilities have fit into this traditional pyramid shape,
with administrative work taking up roughly 60% of HR’s responsibilities/service delivery, with interdepartmental
“business partnering” falling in the middle at 30% or so. At the very top and thus receiving the least amount of
attention from HR, are policy and planning initiatives.
Now, most organizations must seek to shift the role of the HR function into the right side shape. The goal in
implementing HR technology is to achieve a “diamond” shape, in which the administrative activities can be
significantly reduced in two major ways as a result of an effective implementation of supportive HR software and
functionality features.
As shown there are two major ways in which technology can reduce the administrative workload. The
implementation of web delivered software applications via a Software-as-a- service approach (SaaS) will
automate and instill best practice workflow for benefits administration, payroll, and recruitment and dozens of
Admin
Policy/Planning
20%
50%
30%
Outsourced activities to third party
Outsourced activities to employees
Business Partnering
HRT
SaaS
HR Admin, Payroll, Benefits Admin,
Recruitment
60%
30%
10%
Administration
Business Partnering
Policy/Planning
ESS/MSS
WorkflowBest Practices
Email Alerts
Transforming HR:Classical View to “Diamond” view
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
more HR areas of oversight. The always needed and important features of those delivered software applications,
the employee self-service (ESS) or manager self-service (MSS) tools will allow significant workforce activities to
be done by employees and managers throughout the organization, directly and without any intervention by HR
staff. The combination of workflows, ESS and MSS and the ability for software to enable access to the system
of record via desktop, tablet or smartphone will reduce administrative tasks as much as 40%. This will allow HR
staff to focus significantly more time and effort on strategic value added initiatives including the planning for new
programs and deeper analysis of the workforce skills and capabilities.
HR technology provides value enriching features and they are incorporated into most of the key solution
providers who offer software related to HR Management.
A comprehensive HRMS with one master file will provide the features shown here and allow a single sign on to
access all functional components.
THE VISION – AVAILABLE TODAY from any numberof effective and proven HRMS VENDORS!
ONE “SYSTEM OF RECORD” SINGLE SIGNON IMMEDIATE ACCESS BASED ON
ROLES AND RULES IMMEDIATE REPORTING HISTORY VIEWED WORKFLOW EMBEDDED “BEST PRACTICES” ESS AND MSS INTUITIVE NAVIGATION INTERGRATED FUNCTIONALITY DASHBOARDS AND METRICS
Copyright © 2017 HRsoft Page 10
HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
Portal Integration
Most vendor offerings must be integrated within a company’s existing “portal” as the entry point via the internet
– with which anyone (depending on role) will be able to interact with the System (s) of record. The figures
below shows the intended vision of the outcomes and benefits to the workforce that are achievable with HR
technology solutions which include ESS and MSS.
“The Portal”A Personalized
“My WORK/LIFE”
Gateway
Work/Life Web Site
An employee or enterprise “portal” will improve the quality of HR service delivery by providing: Single point of access intuitive user experience Consistency of information, procedures,
and transactions Faster transactions via built in workflow Increased employee productivity and morale A channel to facilitate change management and culture
alignment
Resulting in: Reduced costs Re-enforcing a “high tech” culture, appealing to new
generation workers – Gen X, Y and Millennial “The Sticky Workplace,” which retains quality people
An effective EMPLOYEE SELF SERVICE STRATEGY (ESS) as well as MANAGER SELF SERVICE (MSS) results in lower costs, increased value to the business, and improved work/life balance for employees.
THE VISION
THE VISION
Internal / External Users
Business partners
Applicants Employees Managers Retirees
Knowledge Based
Systems
Core HRMS Systems
Foreign Local
Payroll Systems
HR
ADMINISTRATION
AND
POLICIES
Access Technologies
Desktop
Web
Social media
“The Portal”A Personalized “My
WORK/LIFE” Gateway
Laptop TabletSmartphone
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
When you opt to implement an ESS and/or MSS portal through which individuals can retrieve critical data, you
can expect to experience a number of benefits across your organization. In addition to lessening administrative
support, an organization can directly impact the work/life balance for individual employees.
The immediate access to employee information, by the employee and his or her manager is a needed capability.
A manager must readily have all pertinent data on an employee’s skills, competencies, training needs, goals,
specific objectives, performance, salary and any other points of data that will enable the manager to be effective.
Additionally, employees expect that they will have direct access to and interact with their own data, to the point
of direct queries and immediate feedback.
Without such direct and easy to use tools, today’s workforce who are used to smartphone apps and related
behaviors, can easily opt out of an organization. They become dis-engaged and seek other employment
alternatives – just based on the perceived value of what they interact with on a daily basis.
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
The More Strategic HR: A Vision
In becoming a strategic partner providing value added actionable information that supports the overall
organization, offering insightful support to the strategies and vision of the company, HR ’s role becomes more
critical than ever before.
Aided by technology, today’s HR has a positive impact on business alignment. It can assist in getting all five
of your key success drivers – people, processes, technology, structure, and culture – in allignment which
enhances organizational capabilities and drives performance. This alignment has a “domino effect” as each
program builds on the success of others, and the reputation of HR increasingly becomes that of a value added
strategic partner.
However, for all this to be effective, HR must also understand the organization in which it is a part.
No longer should HR executives think only of HR initiatives.
The need exists for HR executives and staff – at every level – to understand the mission and vision of the
organization and its looming strategies and organizational direction.
HR must know the industry in which they are working, be it Manufacturing, Healthcare, Finance etc. And
importantly, HR must anticipate the information needs of the Executive level if not the Board of Directors.
The figure below shows some of the concerns of the C-level executives as they strive to steer any organization.
Their concerns are certainly not solely focused on the workforce itself, although it is an important component.
Additionally, the Board and any Executive Team expect to achieve “Value” from the function of Human Resources
or Human Capital and its senior leadership.
That value is attributed to control of the factors shown here:
Administrative efficiencies resulting in cost reduction Leadership developmentOverall alignment with the organizations’ strategies, mission,
goal and vision.High service quality to all customers (stakeholders)ResponsivenessRisk Management Talent management, identification and acquisition, and a
pipeline Effective leveraging of technology to all appropriate functions
within the realm of HR, Payroll and Benefits
“VALUE CREATION”!
CEO, Board & Stakeholders expect…
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
How to present “value added information”… not Data
Today, simple spreadsheets and most “Ad hoc” reports are too limiting to present “information…not data” that your
key stakeholders, Boards of Directors, and CEOs are looking for.
As stated in Fig NN… Executives and Boards would welcome “information” that enables actionable programs
in support of a company’s strategies. Only pieces of what they seek are directly related to the workforce. Key
Performance Indices are an important measurement of the company, and their makeup varies from industry to
industry and company to company.
The more HR executives anticipate and understand what types of information is sought, the better they can
build the outputs to display appropriate information. These will be in the form of various charts and trends – all
classified as metrics. Not all are related to the workforce. However, many do rely on some manner of workforce
statistics, as direct employee staffing information is incorporated into any metrics related to the performance of
HR programs.
Here is a brief list of the types of information Boards, C-Level executives and Senior level Advisory Committees
seek to interpret which will lead to strategic initiatives:
Products and cost of production
Overhead
Economic indicators
Organizational financials
Organizational structure
The workforce and its utilization
The marketplace Competitors Acquisitions and mergers Research and development
Technology development Human resource programs
and measurement
Think this……..
Stakeholders & C-Level Executives want actionable information that assesses…
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
Clearly, these are just broad categories of strong interest to senior executives. Being more specific, consider the
following as 3 strategic based inquiries by a Board of Directors to an Chief HR Officer (CHRO):
� Who are the key people in the organization, and how do we know that they’re performing so well? What,
specifically, are they doing that stands out? How good are they, and how are we measuring this?
� Compared to our competitors, are we paying them too little or too much? How do we know? Should we
lose one of these key contributors, what is the succession plan?
� How much would it cost to reduce our headcount by 10% while also retaining our top performers? What
type of impact might that reduction have on our ability to stay competitive in our industry?
Earlier in this paper, we talked about how HR is evolving or moving from “data management to information
craftsmanship”. “Craftsmanship” in this sense, refers to the manipulation of underlying data to “craft” a point of
information that proves to be a prediction of a future state.
That “future state” can typically be derived from the appropriate historical data which would then be treated to
an arithmetic projection model, such as a regression analysis. For example, looking at historical rates of turnover
over the past X years (calculated by “termination date/reason” and grouped by variables such as department
and geography, leads to a specific rate. Then taking current population data and using a regression analysis
calculated against the historical rate an approximation of the future headcount can be arrived at. This look into
the future via a projection, can then lead to any number of initiatives that are put in place to increase or counter a
predicted outcome.
A Few Critical Key Performance Metrics/Indices
In any organization, or any business, large or small
the Owner or Board of Directors seek the answers to
very broad but important questions. Here are a few:
� What is the overall condition of the
company? of a specific Business Unit? of
the Workforce (Human Capital) itself?
� Are we (the Company) meeting strategic
needs?
� Are we (the Company) delivering our
services in alignment with our corporate
strategy and direction?
� Are our customers’ needs being met?
� Are we optimizing our service delivery
process?
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
The Four Perspectives
An effective strategic plan or road map must consider these questions from 4 points of view.
They are:
� From the Customer’s Perspective: Executives will want to know how the company is being perceived
by its’ customers. A few goals and measures can be used to answer this question, including customer
satisfaction, sales trends, brand strength, market share, and customer loyalty.
� From the Growth & Learning Perspective: Executives will want to know how the organization will
continue to improve and create value. Measurements such as first to market percentage, number of
development activities, and percentage of ready successors may help to ascertain growth and learning
status.
� From the Internal Business Perspective: What is the company doing well? Compiling data presented
as trends related to compliance, workforce productivity, turnover rate, job fill rate, etc. will provide
“actionable information” to justify new programs.
� From the Financial Perspective: The leadership team of large organizations in reality, answer to the
body of shareholders and stakeholders. Financial data and trends such as Earnings per share, growth
revenue, budget accuracy, and profit/employee rates will provide an important picture of the overall
viability of the organization. Some of the metrics, although financial, do involve HR and Workforce
underlying data.
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
Which Metrics Should HR Measure?
In the previous section, we discussed a number of metrics and the ways in which they play a role in determining
how your company is being perceived from four important perspectives. As we discussed, HR alone may not be
responsible for measuring every one of the discussed Key Performance Indices.
Now, the following metrics can be considered to be developed and provided by the executives within the HR
function working with the owners of the HR technology:
� HR Operations & Performance: These metrics are important for Senior HR executives, as well as directors
and managers responsible for specific program deliveries and functionalities.
� HR Functionality Services & Programs: HR administrative specialists responsible for overseeing how
specific programs are adapted and utilized by the workforce are seeking these metrics.
� HR Technology Service Delivery: The performance and audit of the specific HR technology, including
the ongoing relationship with the providing software application vendor and the overall utilization of
specific features and functions, and the performance of periodic system maintenance and upgrades
is the focus of these metrics and are much sought by any organizations Manager or Director of HR
Technology/systems (HRIS).
The figure below lists specific metrics related to Workforce Management, also known as Human Capital
Management. Each is shown with the underlying data points needed to calculate.
Human Capital Revenue Factor (HCRF) Total Revenue / Full Time Equivalent (FTE)
Human Economic Value Added (HEVA) (Net Operating Margin – Cost of Capital) / Full Time
Equivalent (FTE) Human Capital Cost Factor (HCCF)
W2 Pay + Cost of Contingent Labor + Cost of Absenteeism + Cost of Turnover
Human Capital Value Added (HCVA) Operating Revenue – (Operating Expenses – Pay and
Benefits) / FTEs Human Capital Return on Investment (HCROI)
Operating Revenue – (Operating Expenses – Pay and Benefits) / Pay and Benefits
HR Operations & Performance Metrics
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
The Logic Chain: Why HR’s Metrics Are Indispensable to Better Performance
In summary, the providers of HR Technology have recognized the importance of providing their customers
standardized report libraries – many of which include graphical depiction of trends and are considered predictive.
The vendors have done the underlying arithmetic and have been able to deliver output beyond providing a
simple, effective user experience within Manager Self Service (MSS) of an ad-hoc report generator.
By using underlying HR Technology the function of HR can position itself as a strategic business partner within
any organization, of any size and complexity.
Assuming all the data is accurate, and there is a good amount of historical date sensitive data for all of the basic
employee and HR lifecycle transactions, HR has to greatly benefit by implementing any number of technology
solutions within the large realm of Human Resources Management.
Making a strong case for the critical nature of HR Management and its needed use of technology is based on
these underlying statements of premise:
� Metrics and analytics emerge from the data maintained by an HR data master file.
� HR can produce a predictive analysis for each of the KPIs that align with corporate goals, presenting
them to leadership.
� Managers can make better decisions based on the trends and predictive analytics provided by HR.
� These better decisions should have a positive impact on the company’s goals and strategy.
� Achievement of goals and strategies, and subsequent creation of more ambitious goals, adds value to
the company.
� Value creation leads to improved efficiencies.
� Greater efficiencies lead to improved company performance in terms of revenues, sales, profit/loss
ratios, and stock price elevation.
Of course, achieving improvement is not an endpoint. Once executives begin to take for granted the power of HR
technology, and HR’s ability to harness or leverage that power within a reasonable cost level, the demand for
more information, metrics, and workforce analytics will only increase. Thus, a productive cycle is created in which
HR’s new, evolved role is both as fundamental to the success of the organization but also that the function of HR
is needed as a strategic business partner in all aspects of the corporation.
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HR’s Strategic Shift: How to Leverage HR Technology to Drive Business Results
Resources
HRsoft is a cloud-based, High Impact Talent Management™ software
company that specializes in improving employee engagement
and retention for mid-large sized employers. Our High Impact
Talent Management System™ includes modules for compensation
management, applicant tracking, management software, total rewards,
stay interviews, and content management.
Phone: 866.953.8800 | Email: [email protected] | Web: http://hrsoft.com
About the Contributor
Marc S. Miller | President & Founder, Marc S. Miller Associates
MARC S. MILLER : is a nationally respected thought leader, consultant,
speaker and author on HR Technology. He has over 35 years experience with
all aspects of technology solutions for Human Resources. His consulting
firm, together with his industry visibility, has made Marc S. Miller one of the
HR Technology industry’s most recognized voices. Marc has been a featured
speaker and presenter at numerous HR and HCM technology meetings both
industry focused and at many HRMS providers User Conferences. His blogs
and webinars are always well viewed and attended. His recently published
book, “HeroicHR”, now in its Second Edition, is in high demand.