User Adoption’s Surprisingly Important role in HR’s Digital Transformation
From hiring the right people to getting the right people into the right jobs to promoting the right people into leadership, HR is still battling the same issues today that I walked into when I entered the workforce 20+ years ago… and that industrial psychologists were helping companies with decades before that.
Despite claims that a digital transformation would make these issues more manageable, so far, that hasn’t seem to have been the case. In fact, to be fair, HR’s digital transformation doesn’t seem to have really even happened yet.
Areas such as marketing and finance have moved well along their digital maturity curves, while HR is still struggling with basic functionality and reporting. I had a conversation about a year ago with the head of Talent Acquisition at a unicorn, who told me that it took hours each week to compile an executive report from the data spit out by several different systems, none of which talked with each other. And because of the type of information in that data, he couldn’t delegate the task.
Hardly a transformational story. What’s going on, HR?!
Why HR is Playing Catch Up
As compared to other functions such as Marketing, Finance, or Operations, HR has several unique challenges that make digital transformationmore difficult:
HR software‘s user base isn’t just HR, it’s everyone. Whereas marketing software is built for marketers, HR software includes some software that’s built for HR, and then other software that’s built to be administered by HR… but used by everyone else (think managers, hiring managers, and employees). And unlike expense software, which would also fit into this category of being built to be administered by a small group (Accounting) while used broadly, HR software is not as straightforward: there are platforms to help managers to create job descriptions, schedule interviews, and onboard employees; to help them train their teams, manage performance, create succession plans, handle compliance issues, track time and attendance, administer benefits, and, of course, manage HR requests. It’s a lot!
It’s hard for HR to leverage short term wins. Sales, marketing, operations, and finance can hedge long term investments against short term “wins,” thus providing a hedge against the need for long term investments. Even if all the hedge provides is a story to tell investors and/or analysts, there’s something there can be used to buy time. (Marketing can show progress at the top of the sales funnel; operations can target immediate, “lower case e” efficiencies while investing in “capital E” Effciencies; finance can issue a cost cutting directive or pay down debt.) HR struggles here: what’s HR’s short term win, hiring people? Maybe, if the company needs to grow quickly, but financially, the “win” of hiring is still a short term cost, both in terms of payroll and also in terms of productivity (those new hires’ learning curves slow down their teams). So at the decision-making level, it’s murky.
HR‘s impact is masked because it works through other departments. Whereas sales’ contribution to the top line is clear, HR’s impact on the top line isn’t… at least not directly. HR’s hiring policies might impact Sales’ ability to execute, but that upstream impact doesn’t show up anywhere, except as an improvement in the Sales team’s performance. This creates a particularly acute challenge for HR during goal setting, as HR’s goals either have to be enterprise-wide to encompass all those downstream impacts that will show up in other departments’ results, or super narrow to avoid any double counting. The former invites all sorts of political problems; the latter invites disinterest. HR needs to create a new set of options here.
HR struggles with metrics generally. There’s an old adage in sales that when it comes to speed, quality, and price, a customer gets to have only two. Historically, HR has been under intense pressure to deliver on all three. Complicating matters further is that “quality” has been extremely difficult to measure. Good news on this challenge, though: old school marketing suffered from a similar set of challenges, and pressure for better numbers led to that function’s digital transformation, which in turn has allowed marketing to become much more measurable. So this challenge has a model to follow, at least.
The first rule of any good plan of attack is that it addresses real challenges. In HR’s case, that means realistically thinking through the above. Spoiler alert: the first challenge above is listed first for a reason.
The second rule is that the plan is executable. A plan is no good if people can’t get it done! An executable plan will be something people understand, like (i.e., they see what’s in it for them), and trust (i.e., presented to them by someone they like and trust). So if the plan’s benefits are too vague, the metrics too convoluted, or the payoff so far in the future that there’s no belief that it’ll ever come to fruition, the plan will be DOA, no matter how pretty it looks on paper. The plan has to very quickly turn hard-to-grasp concepts like “culture” and “quality hires” into something concrete, measurable, and impactful.
For these reasons, I find the faster a company can latch on to user adoption as a key metric, the better. For one thing, it’s concrete, easy to track (relatively speaking), and easy to understand. For another, there is a direct link between the action and a promised benefit, so people can quickly see what’s in it for them—and just as importantly, HR can get feedback quickly if people can’t see what’s in for them (not just by their complaints, but literally by watching what employees do—non-use of a system is feedback!). HR can use that information to adjust its plan before there’s a problem. Finally, user adoption gives HR a way to clarify how it impacts other departments’ results. For instance, if HR were to roll out a new talent management platform to half the sales team for six months, they could see what change that group has in their performance compared to the people who don’t get the new platform in order to figure out how much the HR platform helped. (I’m oversimplifying to make a point.)
Bottom line on user adoption & transformation
It’s not that user adoption is the most important aspect of HR’s digital transformation; it’s that focusing on it has the benefit of making much thornier issues easier to address—while simultaneously and quite literally bringing the transformation into being.