Pic
EMPLOYEE ENGAGEMENT & EMPLOYEE EXPERIENCE
Employee Experience and why it fits well with People Analytics

Employee experience is rapidly becoming one of the key topics on the CHRO agenda. Yet many of the conversations that I hear miss a critical factor: that creating valuable employee experiences is a systematic and data-driven process.

When I left a senior HR role in 2009 to build a business ‘to help make HR an empirically-driven function’ one of the key areas of information that we started with was experience data. In the diagram above, which I’ve taken from one of our earliest presentation decks, the components at the bottom right are all ways of measuring experience.

Our earliest proposition said OrganizationView focused on 3 things:

  • measurement & meaning – collecting data and making sense of it through analytics
  • employee-centric design – as we said ‘use a scientific approach to ensure technologies and services are closely aligned to users’ needs and behaviours
  • develop and deliver – moving analysis into production

Why experience?

Why such a focus on experience in 2009? Well, my background in the early noughties was centred around understanding in a deep way how to systematically understand user experience. Lots of this was in the area of candidate experience. You can see some of this in a 2004 article by David Bowen in the Financial Times – subscription needed – that came after a long conversation we had about candidate needs from my research at the time. It’s about building career sites and recruitment systems that are based around optimising the candidate experience.

As an aside when I joined UBS in 2005 to launch their first global careers site on the first meeting of the project team, when we were discussing governance I added one rule: “if we can’t decide what to do we’ll test it with users in an experience lab.” We tested lots (UBS had two user-research labs and we also ran tests in London) and the bank came (joint) top in the FT web ratings in the career section that year. We cut our marketing budget that year by over-investing in research.

Some of this philosophy came from working in a couple of firms where my close peers were working on projects with IDEO. We took this view and many of the techniques into recruitment, making it candidate centric and based on experience and relationships. The key though was that the process was heavily research-centric. Experience design is highly aligned with empirical decision making. It is systematic and based on data. A central theme is to actively and constantly listen and understand the experiences your stakeholders.

IDEO, in their 51 method cards, separate their ‘measurement’ approaches to 4 categories – Learn, Look, Ask and Try. What they all are is ways of understanding how the user experiences a product or service or the part of their life where the offering will fit. Some are very qualitative, some more quantitive. I believe all qualitative data can be quantitive if you capture enough examples. Also, the first thing you do with qualitative data is to add meta-data which makes it quantitive. In the end data is just information.

From Candidate Experience to Employee Experience

The roots of Employee Experience came from Candidate Experience. From 2002 I smashed my head against the proverbial wall for a long time trying to evangelising why it was critical. The Talent Board folks did a much more effective job.

One of the slides we used to show in the early days was the following graphic. In it we compared the importance of experience as a driver of satisfaction in banking and in work. We used internal bank research (not UBS) with some re-cut data from the CEB. It turns out that in each case components of the offer which could be classified as ‘experience’ account for about 70% of what drives satisfaction, and therefore engagement.

How Employee and Customer experiences drive satisfaction

How Employee and Customer experiences drive satisfaction

 

 

The way an employee thinks about their organization is the sum of their experiences. At different stages in their journey from consideration, through selection to employee and alumni their perception will change. How that perception develops is the sum of their experiences. I discussed how this is linked with the EVP in early 2011.

Employee Experience and People Analytics

What we can establish is that experience design is both systematic and data-driven. Yes, it incorporates systems and user experience but critically it includes experiences that have nothing to do with systems. Even with systems you need to understand what people were doing before they go to the system and what they do after using it.

Our vision of People Analytics is that it should drive evidence-based decision making about the workforce in organisations. We have always felt that that evidence is a mixture of quantitive and qualitative data. We believe that experience measurement is a core element of the role of a People Analytics team.

In the graph above we show that 70% of the drivers of satisfaction is experience based. If we think of the current state of People Analytics too many firms only use existing data from their HR systems to develop their models. None of this data is likely to be describing experiences. They’re building models trying to squeeze meaning without signal about the important part.

The analysts’ job is not to build accurate models, it’s to answer critical questions with data. Given how important a driver experience is it needs to include experience and therefore many analyses need to include experience data these models. The analyst needs a robust and automated way of capturing this data.

At the heart, this was the basis from which we decided to build Workometry. Capturing open, reliable experience data at critical touchpoints – what some call ‘moments that matter’ – and doing so in a way so that it can be integrated into sophisticated models is critical to understanding and managing the employee experience.


Pic
HR TRANSFORMATION
Here’s What HR Must Do To Have The Business Impact CEOs Want

A survey released early this year of global CEOs and board chairmen was conducted by the prestigious Conference Board, and it concluded once again that human capital is the top challenge they face. While some in talent management and HR might feel honored to be at the top of the CEO’s watch list, they should instead view this listing as a failure, because they have been at the top of the challenges list two years in a row.

This means to me that we in HR haven’t done enough to eliminate the uncertainty and the lack of confidence that comes with being labeled “a challenge.” The other top five issues including customer service, operational excellence, and innovation all require well-managed talent in order to be successful.

In my experience, if human capital is to move from the “challenge” list to the “problem-solved” list, we need to move away from our soft, longstanding reliance on building relationships and instead begin the transition to a high-impact business function. A high business-impact HR is where we focus on directly impacting corporate strategic goals like revenue, innovation, and customer service.

And yes, I acknowledge that the soft, relationship-building approach of talent leaders might have been OK in the past. However, it’s now simply not possible for any strategic function to continually improve and innovate without shifting to a businesslike, hard data-based management approach. Executives have in the past been satisfied with what HR has historically provided, but that was mostly because executives were simply not aware that there was a second, more businesslike approach to talent management.

Unfortunately I don’t see HR making that transition as long as we get away with these low expectations from CEOs. So my suggestion is that we challenge our CEOs to demand much more from HR.

HR is a high impact function

You shouldn’t need a survey to realize the importance of talent to a business. Even Jack Welch has stated that HR should be “the most important department of a company.”

 

We have a high impact for a variety of reasons. The first is cost, because employee and HR costs are often the largest single corporate variable cost item (as much as 60% of all corporate variable costs). Second, the talent function has a further major impact because all ideas and innovations come from well-managed employees. And obviously you can’t have great customer service and smooth operations and production without an excellent workforce.

The 8 action steps for becoming high impact

Once you decide to make the change to this higher business-impact approach, the next step is to identify the specific strategic areas within HR that must become more businesslike. Those areas are highlighted below:

1. Accept accountability for improving people-management results — Talent leaders frequently complain that they shouldn’t be held accountable for people-management results because so many people decisions are made by managers. I find that argument to be spurious because most other business functions like finance, planning, and IT also share responsibilities and decisions with numerous managers. The critical thing to remember is that talent management designs and manages all talent processes, so they are in my view “the default owner.”

We also know that individual operating managers routinely refuse to take accountability for talent decisions, so that leaves talent leaders to accept the “captain of the ship” role. Executives should demand that talent leaders accept accountability for such critical areas as hiring and retaining top talent, for increasing productivity and innovation, for developing and moving talent internally, and for providing rewards in such a manner that they stimulate employee productivity. It’s time to stop shifting the blame and to accept accountability for excellence in talent management, even when we don’t have total control over it.

2. Demand a shift to data-based decision-making — Strategic decision-makers need to demand that talent management shift from its traditional “gut” decision-making to the widely accepted business practice of making all important people-management decisions based on data. That includes using data to identify the most effective hiring criteria, to identify the factors that cause employee turnover, and using data to identify the barriers that decrease productivity and innovation.

An example of database decision-making might focus on performance management. In this area, it is quite common for talent leaders to assume that progressive discipline, coupled with additional training and counseling, will turn a subpar “D level” performing employee into an above-average performer. If you shifted to a metric-driven approach, you would require your performance management person to begin tracking metrics like how long it takes to improve, how much money it costs to improve, and what percentage of these “D players” ever become “A” players.

One final metric area that you should expect your talent leaders to begin developing is predictive metrics. Rather than relying exclusively on historical metrics which tell you what happened last year, these predictive metrics will instead alert you to talent problems and opportunities that will likely occur in the immediate future so that you have sufficient time to act. And add to your predictive metrics your recommended prescriptive actions, so that managers will know what to do to solve their problems. 

3. Measure and increase workforce productivity — Even though measuring and reporting on the productivity of the workforce seems like a basic task, few talent management teams actually calculate or report it. In fact, when you ask talent management professionals who is responsible for measuring and increasing workforce productivity, typically no one will say it’s their role. The most widely accepted measure of talent management effectiveness is known as “workforce productivity,” which is revealed by the average revenue per employee. The two key components required for this calculation, revenue and the number of employees, are usually easily obtained from public data or alternatively, the metric is already calculated on websites like MarketWatch and Hoover’s.

Another more powerful but harder to calculate indication of workforce productivity is revenue per labor dollar spent. This is calculated by dividing your total labor costs into the company’s revenue. 

4. Make managers accountable for great people management — Less than 40% of talent leaders make excellent people management part of the promotion criteria and bonus formula for managers. But since “whatever you measure and reward gets done,” strategic decision-makers must insist that the people management metrics and rewards are large enough to get managers to change their behavior.

Incidentally, only hire managers who are clearly A players. This is because B-level managers have a tendency to protect their job security by hiring C-level employees who won’t challenge their methods or threaten their job security.

5. Build a competitive advantage — Almost every product, business unit, or process views itself as operating in a competitive environment. Unfortunately, talent management all too often considers itself exempt from taking an external perspective, under which it would conduct a competitive analysis and adopt talent-management approaches that would provide the firm with an external competitive advantage.

Under the new approach, talent management would be required to monitor the talent results and the approaches of major talent competitors, in order to ensure that “what we do” in talent is better in every important area than “what they do.” Check with your talent leaders and don’t be surprised to find that they do not conduct side-by-side comparisons between your company and its talent competitors. In a similar light, talent management often fails to capture enough competitive intelligence information on the talent practices of competitor firms.

6. Expect reporting on continuous improvement — Every business function monitors its programs and consequently reports the percentage that they improve each quarter and year. Unfortunately, talent management has frequently failed to measure and report its percentage of annual improvement. At the very least, talent leaders should expect continuous improvement in the quality of hire, workforce productivity, the turnover rate of top performers, the rate of innovation, and the learning and operational speed of the organization. 

7. Measure quality and error rates in people management programs — Talent professionals generally focus on volume and cost, but they routinely under measure and underreport metrics that reveal quality. You should insist that talent leaders implement at least a limited version of Six Sigma quality in the areas of hiring, retention, training, and performance management. Also demand that they conduct a “failure analysis” every time there is a major talent management program or process failure. Some data suggest that hiring has as much as a 46% failure rate, so an error rate that is potentially that high needs to be measured and reported. 

8. Calculate your ROI — Almost every department and program is expected to produce a positive ROI. However, talent leaders routinely make no attempt to calculate or report the talent function’s overall ROI. And in the rare cases when talent leaders do attempt to calculate ROI, they only focus on the cost side, completely ignoring the other side of the equation that covers the business impacts of your investment in talent. When operated correctly, HR should have a higher ROI than finance, operations, and even production.

Final thoughts

Once you begin making this transition to a data-driven high business impact HR, you shouldn’t be surprised when you find that members of your own HR team are not capable or even interested in shifting to this model. If you don’t have the courage to release them, you should at least put these resistors in administrative roles within HR. I also suggest working with supply chain and the CFO’s office to better understand how to increase and quantify the business impacts of HR.


Pic
DIGITAL (HR & TRANSFORMATION)
HR’s Five Actions in Crafting a Business Digital Strategy

No one anywhere doubts or can avoid contact with the digital revolution that affects every part of daily living: from health monitors on wrists (e.g., Fitbit and Apple watch), smart phones, and home entertainment to health care, travel, payments, and so forth. So it naturally affects the business world as well.

A digital business agenda helps any organization access and turn data into information, use that digital information to make better choices, and ultimately add more value to the firm for all stakeholders. In recent years, HR professionals have become increasingly focused on adding value through strategic work more than administrative work. To further this strategic HR focus, we have identified five actions HR professionals can pursue to help make a digital business agenda happen (see figure 1).

Build a Business Case

For a digital business agenda to be accepted, employees need to have a shared awareness of and need for digital information that improves decision-making. HR wants to help employees recognize the dramatic implications of technology advances that come from accessing and using digital information. Communication of this business case from HR should reduce employee fear about emerging technology disruptions and help them see artificial intelligence as an assistant or enabler. As smart devices (e.g., home automation) and technology assistants (e.g., Alexa, Siri, Cortana, Google Assistant) become more widespread in personal use, employees may become more aware of their potential for improving work settings as well.

HR can facilitate communications additionally through blogs or videos, question/answer sessions, discussion forums or chat rooms, town hall meetings, recognition systems, and other means. The rule of thumb is that someone needs to hear a message (e.g., that AI enables but does not replace people) ten times for every one unit of penetration. This consistent, simple, and redundant messaging about the impact of the digital on business helps employees replace fear with hope, and pursue the digital business agenda without hesitation or trepidation. 

Facilitate a Digital Business Team

Some firms have mistakenly made the “IT” function the steward of the digital business agenda. Building an overall digital business agenda requires a cross-functional team because each business function accesses information to make better overall business decisions.

  • Marketing provides information about current and future customer trends to tailor and customize customer solutions.
  • Finance accesses information on the economics of technology investments and their impact on shareholder confidence and value.
  • Information technology builds the hardware and software, and deals with other technology issues (e.g., privacy, security) in order to build the backbone of good information.
  • Operations requires information to understand the supply chain and the operations of the organization.
  • HR provides employee and organization information required to make change happen.

In addition, HR professionals should be gifted at creating and managing a high-performing team to ensure that this collection of different functional specialties works together to deliver on the digital business agenda.

Articulate Digital Business Outcomes

A digital business agenda must deliver business outcomes that matter. The digital team should ensure that these outcomes are defined, tracked, and woven into an accountability system. HR can lead the facilitation of these outcomes since HR professionals have skills in performance management, which requires clear expectations and outcomes.

In general, the digital business outcomes follow the logic of a balanced scorecard and might include outcomes such as:

Financial:

  • Increased revenue from digital information as information creates new markets and products.
  • Reduced costs as digital information creates operating efficiencies through lean manufacturing, automation, sourcing, or other mechanisms.
  • Increased investor confidence as investors recognize the digital agenda that will help a firm adapt to future opportunities.

Customer:

  • Increased revenue from targeted customers (e.g., complement market share with customer share of key customers) through digital information on them.
  • Increased net promoter scores as customers experience more positive interactions with the firm in ways that work best for the customer by connecting with them through technology
  • Increased customer loyalty as retention grows with more customer information.

Organization:

  • Increased ability to track key information sources to build key capabilities—such as innovation, collaboration, service, and change—that are required to win.
  • Increased ability to create the right culture that turns customer promises into employee actions by monitoring and measuring the right culture

Employee:

  • Increased productivity by having employees focus where their unique talents add the most value by tracking employee data and desires.
  • Increased employee sentiment as employees find meaning and purpose from working in the organization by connecting people through technology.

HR professionals can work with the digital business team to facilitate the selection of those specific outcomes that would be most relevant for their business. These outcomes then become expectations that HR weaves into communication plans as well as compensation packages.

Audit Current Digital State

Digital business agendas don’t happen by chance; they require management attention. This attention often begins with a digital business audit to set a baseline for the use of digital information for business results and also assess the extent to which digital information is used in the multiple functions of a business to improve decision-making.

HR professionals have experience doing leadership 360 assessments where leadership competencies are assessed by multiple assessors, and organization (or culture) audits where the systems in an organization are assessed as a baseline score. With this background, HR professionals can help the digital business team form an audit by selecting audit questions and then collecting data from multiple perspectives (like a 360).

The outcome of this audit is a baseline that can be used to track progress in the digital business agenda.

Craft Digital Business Plan

The fifth and final action in creating a digital business agenda is to prepare a digital business plan. This plan, prepared by the digital business team, turns awareness into desired outcomes. Often an organization has a template for planning. If so, this template can be adapted to a digital business plan. If no planning template exists, the four steps in figure 2 can be readily adapted to the digital business plan. By asking the questions about vision, goals, actions, and follow up, an HR professional can work with the digital business team to prepare a plan that gives a company confidence in achieving their digital business outcomes.

Conclusion: Building a Digital Business Agenda

A digital business agenda should communicate the importance of digital work to all employees (HR role 1), be created by a multifunctional team (HR role 2), offer clear and important business outcomes (HR role 3), be tracked regularly (HR role 4), and incorporated into an ever-evolving planning process (HR role 5). As HR professionals engage in these five roles, they help shape and deliver a digital edge to the business. 



Pic
DIGITAL (HR & TRANSFORMATION)
Digital HR: What Is It and What’s Next?

No one doubts that technology has changed our lives. Global online sales have doubled in five years to over $1.5 trillion. The big six social networks (Facebook, Twitter, LinkedIn, Instagram, Google+, and Pinterest) exceed a total membership of 2.4 billion people. If it constituted a country, Facebook—the most popular social media platform—would be the second most populous country on the planet, after China. Technology pervades our daily lives in how we use computers, communicate, access entertainment, drive, shop, form relationships, and so forth. Unprecedented and fast innovation in technology provides digital information that increases and enables customization, underpins predictive analytics, and redefines boundaries.

So, what are the implications for HR?

Human resources is not exempt from being affected by this digital progression. The digital world of HR is a major theme for dozens of HR conferences and new applications and tools with great promise. Let me suggest four phases in the evolution of digital HR, recommending phase 4 (connection) as the new agenda. 

Phase 1: Efficiency: To what extent do we use technology to streamline administrative HR work?

Large global firms like Oracle (with PeopleSoft), SAP (with Success Factors and Qualtrics), and Workday (with Workday Human Capital Management) offer technology platform services, engineered systems, and software applications for business and HR solutions. These firms often build the technological backbone for automated shared services where administrative work is done faster, cheaper, and easier. In addition, emerging robots extend this efficiency agenda by doing HR administrative work

Phase 2: Innovation: To what extent do we use technology to innovate our HR practices?

Innovative HR apps upgrade every HR practice area (see some examples below). I have proposed five criteria for evaluating the viability of these apps as they continue to proliferate. The following are some example of how HR can improve HR practices with technology applications.

Phase 3: Information: To what extent do we use technology to access information?

We found in our research that information management (asymmetry) is the most critical capability to deliver business results. Traditionally, access to information gave leaders power because they had more information than their employees. Today, with open access to information through technology, information is less about power and more about the ability to make better business decisions. HR departments can influence information asymmetry by hiring information experts (e.g., software engineers), ensuring that external information guides internal decision making (e.g., predictive analytics), and bringing rigor to both structured (statistical) information and unstructured (observational) information

Phase 4: Connection: To what extent do we use technology to create connections?

Even as digital HR enables efficiency (phase 1), innovation (phase 2), and information (phase 3), the emerging impact of digital HR will enhance connection. Being connected overcomes loneliness (social isolation) and underlies employee experience. The need for connection is high as recent research has found that social isolation increases mortality rates more than smoking, obesity, or substance abuse. Connection defines employee experience by drawing on attachment theory. Attachment theory essentially states that when someone has strong emotional attachment, personal well-being increases, which in turn increases personal productivity and overall organizational performance. The HR digital agenda needs to evolve to focus on emotional attachment or connection in two ways. 

First, HR technology helps employees attach to each other in order to feel a sense of belonging through personal relationships. As such, technology is about connections not contacts. These personal connections may be problem-solving networks where people work on common business problems with others from around the world, social networks where people share their daily lives, or meaning networks where people connect with others who share their values.

For the millennial generation, these technology-enabled networks are often a major part of daily life. But for all generations, technology networks can shift from simply sharing information to also creating emotional connections. Gamification, for example, is not just about using games to share information but to build personal relationships among the game players.

Second, emotional attachment or connection is not just from belonging and relationships but also meaning and identity. A good friend recently sold her business and fell into a melancholy back hole. While she still had friends, she felt the loss of her connection from the meaning and identity her organization gave her. Another friend learned that being alone is not the same as being lonely. Even being alone, he could connect with his immediate physical setting (in his case, finding joy from seeing the ocean), with his work (working with a purpose), and with his personal goals (feeling accomplishment). So in addition to connecting through belonging, HR could use technology to encourage employee connection through:

  • Entertainment and activities. Employees have activity connections when they use digital information to be more entertained, informed, and enthusiastic about their hobbies and pastimes. Esports is one of the fastest growing entertainment activities today. 
  • Nature. Employees feel nature connection when they use technology for virtual visits to favorite locations and to more readily schedule outings to meaningful places.
  • Ideas. Employees have idea connection when they become passionate about their insights and then use technology to access and generalize their ideas. 
  • Organization. Employees gain identity connection by participating in a purpose-driven organization (work, community, charitable, political, religious, or other organization). Technology enables these organizations to articulate and share their purpose through social media and other platforms. 

As HR professionals use technology to create employee connections and experiences with both people and sources of meaning, they advance the next digital HR agenda by moving beyond delivering administrative efficiency (phase 1), upgraded and innovative HR practices (phase 2), and information (phase 3). HR digital connection (phase 4) increases personal productivity and overall organizational performance. 



Pic
HR TECHNOLOGY
From Talent Management To Talent Experience. Why The HR Tech Market Is In Disruption

Have you noticed how many interesting new HR software companies we have?  There’s a reason. The craze for “integrated talent management systems” is ending, now replaced by a market for “talent experience” solutions.

In this article I’m going to discuss the history of “integrated talent management” and explain why it feels so dated. Then I will explain why the concept of “talent experience” has taken over and how it is transforming the HR technology market.

The History of Integrated Talent Management

HR technology follows general tech and social trends. In the early 2000s companies started to automate the forms we used in HR. Technologies like applicant tracking systems (ATS), learning management systems (LMS), and performance management systems (PMS) were growing explosively, giving birth to a market of these “talent management” tools.

As more and more of these tools became available, companies started to realize they needed a more integrated approach. So around 2006 and 2007 the concept of “integrated talent management” took off.

Here is the slide we used from 2006.

talent management

Companies bought this vision: one of the world’s largest defense and aerospace firms decided to build competency-based job descriptions for every job in the company. Hundreds of companies went down this path.

The idea was to integrate talent practices around competencies. If we built an “integrated talent system” based on job and competency models, we could better select the right people, set goals for reward and promotion, create careers based on competency levels, design consistent solutions for succession management, pay for performance, and … well you know the rest.

It was a lovely vision, and the word “integrated” was at its core … and there was often a new VP of Talent to manage all this.

talent management

Software vendors started building integrated suites. We had a decade of acquisitions, and companies like Cornerstone, SuccessFactors, Taleo, Saba, Lumesse, Halogen, ADP, Ceridian, and then Oracle, SAP, and later Workday all jumped on board. Many of the standalone applicant tracking, learning management, and performance management software companies went away.

The focus was limited: topics like employee engagement, experience, and diversity were “left on the side.” I remember a talent leader at Clorox asked me (circa 2006) “why isn’t diversity in your talent management model?” I scratched my head and said, “I’m not sure, it probably does belong there.” But it wasn’t a big issue at the time, so we left these features out.

As the market for suites heated up, a frenzy of acquisitions took place (it felt like musical chairs). SuccessFactors acquired Plateau; Taleo acquired Learn.com; SumTotal acquired Mindsolve. Then SAP acquired SuccessFactors, Oracle acquired Taleo, Skillsoft acquired SumTotal, ADP acquired Workscape, Ceridian acquired Dayforce, and all the other vendors were left looking for buyers.

A few vendors, like Cornerstone, Skillsoft, and Saba, were big enough to grow and bought others. Others started to struggle, and many were later acquired at small valuations.

Enter the Cloud and a Massive Recession

Around 2008 the whole market changed. We had a massive recession and the idea of buying expensive HR software to “integrate stuff” was shelved. Companies started to look at “optimization” not “integration,” and we entered a period where we focused on “making these talent practices work better,” and do it at the lowest possible cost.

The technology landscape also radically changed. 2008 was the year the iPhone was introduced, and platforms like Twitter, Facebook, and YouTube took off. So as we were figuring out how to stop spending money and manage HR in a more focused way, the idea of using mobile, video, social media, emerged.  

The HR tech industry took a turn. Workday launched the idea of a “born in the cloud” HCM system and changed the market completely. The company showed us a new vision: an integrated cloud-based platform that was cheaper to buy, cheaper to operate, and easier to use. We suddenly wanted “systems of engagement” not “systems of record,” and the older talent management systems looked dated.

While Workday led the charge, vendors like SuccessFactors, Oracle, Cornerstone, and ADP quickly jumped in.  Social, mobile, and analytics were the next big thing. We just assumed we could integrate things through the cloud.

Digital Transformation, Leading to The Employee Experience

Somewhere around 2012, businesses started working on “digital transformation,” and CEO’s became focused on digital skills, agile transformation, and new ways of managing jobs and careers. LinkedIn and Indeed and Glassdoor transformed the recruiting market, so HR departments became focused on culture, engagement, and employment brand.

Today, after almost 12 years of economic growth, almost 40% of the workforce is independent and the talent issues are evolved: We must compete to find smart people, create transparency and mobility, develop a growth mindset, and build a culture of trust, inclusion, transparency, and fairness.

And given the level of employee stress and business focus on productivity and wellbeing, we have all become focused on the “employee experience.”

Looking back, we’ve come a long way from “integrated talent management,” which was entirely focused on the needs of HR. Now we are focused on employees, and how we make their work and personal lives better. Hence a focus on “talent experience,” not “talent management.”

The Word Experience: It’s Everywhere

There are many definitions for the word “experience,” but the one that stuck with me is this: 

An experience is an encounter. It’s an event that you come in contact with, react to, face up to, and remember.

What has your experience with HR been like? Usually not so hot. Well now it’s HR’s job to fix all this, and problems like integrated talent management just have to take place behind the scenes.

Does all this make sense?  You bet it does.

Look at our personal lives. Young people now prefer “experiences” to “belongings,” and we are all so busy, stressed out, and overwhelmed by emails that we just don’t have time for “experiences” we don’t like. How many times have you downloaded an app, clicked on it, and then deleted it in ten seconds if it was too hard to use. I do it a lot!

Such high expectations have arrived at work: if employees don’t find the work experience compelling, they complain, gripe, post something online, or just quit. We have to upgrade all of HR (software and practices) so it’s useful, productive, and meaningful. Which is why I’ve written so much about the shift from “systems of engagement” to “systems of productivity.” If this software doesn’t make my life better, I’m not using it!

It’s difficult to design “experience software.” Just as Learning Experience Platformvendors have disrupted the LMS market, so the Talent Experience Vendors will disrupt the talent management market.

And these new vendors are taking over. The iconic vendors in this phase are not Workday, Oracle and SAP (who are all trying), but new rocket-ship vendors like ServiceNow and hundreds of startups, covering every topic from on-demand learning to well-being, feedback, agile goal management, and AI-based recruiting. I think SAP’s $8 Billion acquisition of Qualtrics sets the pace of what’s to come, and I would not be surprised to see other big surprises come next.

Talent Experience Systems

What is this new marketplace all about? It’s a focus on making employee’s work, life, and careers better – not just automating HR. Consider how the world of talent management has changed.

  • People don’t work for one company their whole career: they move, transition, and work part-time. Two-thirds of Xennials (Gen-z) now do side-hustles.
  • Employees don’t want to wait for compliance training or manager-driven learning, they want to learn all the time. And the want access and control to the topics they learn.
  • Professionals don’t want to wait for their manager to give them a promotion, they want to try new gigs and projects on a regular basis.
  • People work in teams not hierarchies, so they want goals that are simple, transparent, and easy to update.
  • People don’t just want vacation policies, they want wellbeing programs, mindfulness, and help with their personal and financial fitness.
  • When we decide who to promote, the 9-box grid and talent reviews barely work. We want the systems to tell us who has the best network and who is most likely to succeed. And then we want to give that person an opportunity, even if they’re younger than the boss.
  • We can’t keep up with job descriptions and competencies any more, because jobs are changing faster than we can see. We want systems and data to tell us what capabilities most needed, and then AI-based tools are to tell people how to perform.

And the whole idea of job descriptions and competency models is under attack.  Do we really need them when the work we do keeps changing? HP just told us they did away with job titles, (simplifying the number of levels in the company from over 60 to around 14), so people no longer mind changing roles as the company needs.

And we must focus on simplicity and productivity. The pace of business has become breathtaking. Cities are crowded with workers; commute times are long; airplanes are filled with business travelers; and it’s common to travel across many time zones just to meet with clients. We’re all having the time of our lives in this booming economy, but its stressful, competitive, and salaries are barely keeping up.

In other words, the issues companies face are very different than they were a decade ago: we want the “experience at work” to thrive.

 The 2000sToday
Our FocusIntegrated Talent ManagementA Meaningful Work Experience
Our GoalIntegrated HR transactionsPositive employee experiences
Our SystemsProcesses integrated into one platformTools and apps focused on employee journeys
Our PlatformsATS, LMS, TMSDozens of cloud-based tools and platforms
IntegrationIntegrated around competencies and job modelsIntegrated around individual people, roles, and needs
Tech Design PracticesMulti-page portals with integrated back end dataSimple intuitive experiences with seamless back end integration
Underlying TechnologyIntegrated data models and transactionsMicroservices, cloud to cloud interfaces, chatbots and AI-based services
Our Design PointBusiness ProcessesEmployee Moments

 

The Radical Change in the Tech Market

As I’ve watched the HR tech market explode (read my report on the 2019-2020 market here), the changes have been pretty radical.

  • We thought the cloud-based HCM system was a panacea, we now realize it’s just a platform.
  • We used to want fewer HR systems: we now have more… but they are far better integrated.
  • We used to sacrifice best of breed for a suite: today we search for best of breed and focus on the experience.
  • We used to look for a big, stable vendor. Now we look for a stable core platform and buy from many innovative vendors.
  • We used to integrate systems on the back end. Today we integrate them on the front end (from the user experience).

And with all this change, vendors that focus on integrated suites have fallen behind. I can’t tell you how many companies tell me their LMS just doesn’t drive much value anymore. We need a new breed of HR technology to help us make work better. (Here are a few examples.)

Talent Categories Typical Talent Experience Platform Vendors
LearningBridge by InstructureDegreedEdCastFuseValamis360Learning
Assessment, Career, CoachingFuel 50, Gloat, PymetricsBetterUp
Engagement, FeedbackGlint, CultureAmp, Peakon, Humu, Waggl, TinyPulse
RecruitmentPhenom People, SmartRecruiters, Greenhouse, Lever
Performance ManagementBetterWorks, Reflektiv, Impraise, Lattice, 7Geese
VRMicro, Macro LearningSTRIVRAxonifyQstreamNomadicNovoEd, Intrepid
WellbeingVirginPulseLimeAde, Wespire ,Whil,
AnalyticsVisier, Trustsphere, Microsoft, Keen
Diversity, TrustVault, Textio, Jopwell, Blendoor, Landit
Rewards and RecognitionFond, Globoforce, Fond, Bonusly, OC Tanner, Reward Gateway
Employee ExperienceServiceNowGuideSparkHiBobPeopleSpheres
Core HRNamely, Paycor, ADP, Ceridian, Ultimate Software

 

When you look at these systems, you find several new things:

  • They are employee centric. Often the system starts with a user profile like LinkedIn or Facebook, and from there includes tips, nudges, activity streams, and activities based on employee journeys, moments that matter, and important work activities.
  • They use nudges, video, short messages, suggestions, chat, and mobile interfaces to communicate. While these systems still need forms and tabs to capture data, more and more of their design is conversational, so it can fit into the flow of work. Most of them have interfaces to email, slack, Microsoft Teams, and other messaging systems.
  • They require no training. Unlike ERP systems, these systems are “walk up and use.” The designers created them as “fit for purpose” applications so it’s obvious what they’re used for. They often start with a simple walk-through or they just “work” as-is without lots of customization.
  • They are focused. Unlike the Integrated Talent Management systems that tried to do everything, these systems do one thing very well. They can all input data from your ERP or active directory to get access to user information, but they don’t try to replicate or replace any of your HCM or ERP system. This makes them highly functional and innovative, focused on a particular problem.
  • They are cloud from the ground up. These new systems are not “refactored” applications from an earlier day. They were built with cloud architectures so they are very adaptable and can change and add capabilities quickly. And most of them have well developed mobile apps, not just responsive interfaces.
  • They use AI. None of these systems are “AI” tools – but they all use AI in various ways. Each of them, in their own designated area, collects lots of data about the transactions and employee journeys they manage – so they get smarter and more predictive over time. 
  • They are replaceable. Most of these systems don’t require massive ERP-like implementations. They may take months to implement and quarters to learn how to use, but they are essentially replicable because they work in focused areas. So you can take a risk on the vendor being acquired, and if you have to change tools you don’t have to rip out all your core HR infrastructure (with the exception of the Core HR companies).
  • They are truly experience designed. They feel like “journeys,” they are fun and enjoyable to use. They have gamification (points, nudges, recommendations), they let people find other people and communicate with them, they encourage notes and personalization, and they bring people together. 

What This Means to HR Leaders and the Market

This history lesson has a point. We’ve moved to a new place. It’s no longer good enough to buy an “integrated HR suite” and expect your organization, culture, or employee experience to transform. Today, as I describe in Employee Engagement 3.0, we need to really focus on how we make employee’s lives, jobs, and productivity better. This means using design thinking, agile, journey maps, and co-creation of solutions that work for people.

I’ll be talking a lot about this at the HR Tech Festival in Singapore this May. Stay tuned for the new Josh Bersin Academy coming soon, where you can learn even more about this new market and how you can evolve your organization to make work better.


Pic
FUTURE OF WORK & TECHNOLOGY
Your Workforce Is More Adaptable Than You Think

Many managers have little faith in their employees’ ability to survive the twists and turns of a rapidly evolving economy. “The majority of people in disappearing jobs do not realize what is coming,” the head of strategy at a top German bank recently told us. “My call center workers are neither able nor willing to change.”

This kind of thinking is common, but it’s wrong, as we learned after surveying thousands of employees around the world. In 2018, in an attempt to understand the various forces shaping the nature of work, Harvard Business School’s Project on Managing the Future of Work and the Boston Consulting Group’s Henderson Institute came together to conduct a survey spanning 11 countries—Brazil, China, France, Germany, India, Indonesia, Japan, Spain, Sweden, the United Kingdom, and the United States—gathering responses from 1,000 workers in each. In it we focused solely on the people most vulnerable to changing dynamics: lower-income and middle-skills workers. The majority of them were earning less than the average household income in their countries, and all of them had no more than two years of postsecondary education. In each of eight countries—Brazil, China, France, Germany, India, Japan, the United Kingdom, and the United States—we then surveyed at least 800 business leaders (whose companies differed from those of the workers we surveyed). In total we gathered responses from 11,000 workers and 6,500 business leaders.

What we learned was fascinating: The two groups perceived the future in significantly different ways. Given the complexity of the changes that companies are confronting today and the speed with which they need to make decisions, this gap in perceptions has serious and far-reaching consequences for managers and employees alike.

Predictably, business leaders feel anxious as they struggle to marshal and mobilize the workforce of tomorrow. In a climate of perpetual disruption, how can they find and hire employees who have the skills their companies need? And what should they do with people whose skills have become obsolete? The CEO of one multinational company told us he was so tormented by that last question that he had to seek counsel from his priest.

The workers, however, didn’t share that sense of anxiety. Instead, they focused more on the opportunities and benefits that the future holds for them, and they revealed themselves to be much more eager to embrace change and learn new skills than their employers gave them credit for.

The Nature of the Gap

When executives today consider the forces that are changing how work is done, they tend to think mostly about disruptive technologies. But that’s too narrow a focus. A remarkably broad set of forces is transforming the nature of work, and companies need to take them all into account.

In our research we’ve identified 17 forces of disruption, which we group into six basic categories. Our surveys explored the attitudes that business leaders and workers had toward each of them. In their responses, we were able to discern three notable differences in the ways that the two groups think about the future of work. 

The first is that workers seem to recognize more clearly than leaders do that their organizations are contending with multiple forces of disruption, each of which will affect how companies work differently. When asked to rate the impact that each of the 17 forces would have on their work lives, using a 100-point scale, the employees rated the force with the strongest impact 15 points higher than the force with the weakest impact. In comparison, there was only a nine-point spread between the forces rated the strongest and the weakest by managers.

In fact, the leaders seemed unable or unwilling to think in differentiated ways about the forces’ potential for disruption. When asked about each force, roughly a third of them described it as having a significant impact on their organization today; close to half projected that it would have a significant impact in the future; and about a fifth claimed it would have no impact at all. That’s a troubling level of uniformity, and it suggests that most leaders haven’t yet figured out which forces of change they should make a priority.

Interestingly, workers appeared to be more aware of the opportunities and challenges of several of the forces. Notably, workers focused on the growing importance of the gig economy, and they ranked “freelancing and labor-sharing platforms” as the third most significant of all 17 forces. Business leaders, however, ranked that force as the least significant.

The second difference that emerged from our survey was this: Workers seem to be more adaptive and optimistic about the future than their leaders recognize.

The conventional wisdom, of course, is that workers fear that technology will make their jobs obsolete. But our survey revealed that to be a misconception. A majority of the workers felt that advances such as automation and artificial intelligence would have a positive impact on their future. In fact, they felt that way about two-thirds of the forces. What concerned them most were the forces that might allow other workers—temporary, freelance, outsourced—to take their jobs.

When asked why they had a positive outlook, workers most commonly cited two reasons: the prospect of better wages and the prospect of more interesting and meaningful jobs. Both automation and technology, they felt, heralded opportunity on those fronts—by contributing to the emergence of more-flexible and self-directed forms of work, by creating alternative ways to earn income, and by making it possible to avoid tasks that were “dirty, dangerous, or dull.”

In every country workers described themselves as more willing to prepare for the workplace of the future than managers believed them to be (in Japan, though, the percentages were nearly equal). Yet when asked what was holding workers back, managers chose answers that blamed employees, rather than themselves. Their most common response was that workers feared significant change. The idea that workers might lack the support they needed from employers was only their fifth-most-popular response.

That brings us to our third finding: Workers are seeking more support and guidance to prepare themselves for future employment than management is providing.

In every country except France and Japan, significant majorities of workers reported that they—and not their government or their employer—were responsible for equipping themselves to meet the needs of a rapidly evolving workplace. That held true across age groups and for both men and women. But workers also felt that they had serious obstacles to overcome: a lack of knowledge about their options; a lack of time to prepare for the future; high training costs; the impact that taking time off for training would have on wages; and, in particular, insufficient support from their employers. All are barriers that management can and should help workers get past.

What Employers Can Do to Help

The gap in perspectives is a problem because it leads managers to underestimate employees’ ambitions and underinvest in their skills. But it also shows that there’s a vast reserve of talent and energy companies can tap into to ready themselves for the future: their workers.

The challenge is figuring out how best to do that. We’ve identified five important ways to get started.

1. Don’t just set up training programs—create a learning culture.

If companies today engage in training, they tend to do it at specific times (when onboarding new hires, for example), to prepare workers for particular jobs (like selling and servicing certain products), or when adopting new technologies. That worked well in an era when the pace of technological change was relatively slow. But advances are happening so quickly and with such complexity today that companies need to shift to a continuous-learning model—one that repeatedly enhances employees’ skills and makes formal training broadly available. Firms also need to expand their portfolio of tactics beyond online and off-line courses to include learning on the job through project staffing and team rotations. Such an approach can help companies rethink traditional entry-level barriers (among them, educational credentials) and draw from a wider talent pool.

Most workers felt that technology would have a positive impact on their future.

Consider what happens at Expeditors, a Fortune 500 company that provides global logistics and freight-forwarding services in more than 100 countries. In vetting job candidates, Expeditors has long relied on a “hire for attitude, train for skill” approach. Educational degrees are appreciated but not seen as critical for success in most roles. Instead, for all positions, from the lowest level right up to the C-suite, the company focuses on temperament and cultural fit. Once on staff, employees join an intensive program in which every member of the organization, no matter how junior or senior, undertakes 52 hours of incremental learning a year. This practice supports the company’s promote-from-within culture. Expeditors’ efforts seem to be working: Turnover is low (which means substantial savings in hiring, training, and onboarding costs); retention is high (a third of the company’s 17,000 employees have worked at the company for 10 years or more); most senior leaders in the company have risen through the ranks; and several current vice presidents and senior vice presidents, along with the current and former CEOs, got their jobs despite having no college degree.

2. Engage employees in the transition instead of herding them through it.

As companies transform themselves, they often find it a challenge to attract and retain the type of talent they need. To succeed, they have to offer employees pathways to professional and personal improvement—and must engage them in the process of change, rather than merely inform them that change is coming.

That’s what ING Netherlands did in 2014, when it decided to reinvent itself. The bank’s goal was ambitious: to turn itself into an agile institution almost overnight. The company’s current CEO, Vincent van den Boogert, recalls that the company’s leaders began by explaining the why and the what of the transformation to all employees. Mobile and digital technologies were dramatically altering the market, they told everybody, and if ING wanted to meet the expectations of customers, improve operations, and deploy new technological capabilities, it would have to become faster, leaner, and more flexible. To do that, they said, the company planned to make investments that would reduce costs and improve service. But it would also eliminate a significant number of jobs—at least a quarter of the total workforce.

Then came the how. Rather than letting the ax fall on select employees—a process that creates psychological trauma throughout a company—ING decided that almost everybody at the company, regardless of tenure or seniority, would be required to resign. After that, anybody who felt his or her attitude, capabilities, and skills would be a good fit at the “new” bank could apply to be rehired. That included Van den Boogert himself. Employees who did not get rehired would be supported by a program that would help them find jobs outside ING.

Firms need to expand their portfolio of tactics to include learning on the job.

None of this made the company’s transformation easy, of course. But according to Van den Boogert, the inclusive approach adopted by management significantly minimized the pain that employees felt during the transition, and it immediately set the new, smaller bank on the path to success. The employees who rejoined ING actively embraced its new mission, felt less survivor’s remorse, and devoted themselves with excitement to the job of transformation. “When you talk about the why, what, and how at the same time,” Van den Boogert told us, “people are going to challenge the why to prevent the how. But in this case, everyone had already been inspired by the why and what.

3. Look beyond the “spot market” for talent.

Most successful companies have adopted increasingly aggressive strategies for finding critical high-skilled talent. Now they must expand that approach to include a wider range of employees. AT&T recognized that need in 2013, while developing its Workforce 2020 strategy, which focused on how the company would make the transition from a hardware-centric to a software-centric network.

The company had undergone a major transformation once before, in 1917, when it launched plans to use mechanical switchboards rather than human operators. But it carried that transformation out over the course of five decades! The Workforce 2020 transformation was much more complex and had to happen on a much faster timeline.

To get started, AT&T undertook a systematic audit of its quarter of a million employees to catalog their current skills and compare those with the skills it expected to need during and after its revamp. Ultimately, the company identified 100,000 employees whose jobs were likely to disappear, and several areas in which it would face skills and competency shortages. Armed with those insights, the company launched an ambitious, multiyear $1 billion initiative to develop an internal talent pipeline instead of simply playing the “spot market” for talent. In short, to meet its evolving needs, AT&T decided to make retraining available to its existing workforce. Since then, its employees have taken nearly 3 million online courses designed to help them acquire skills for new jobs in fields such as application development and cloud computing.

Already, this effort has yielded some unexpected benefits. The company now hires far fewer contractors to meet its needs for technical skills, for example. “We’re shifting to employees,” one of the company’s top executives told CNBC this past March, “because we’re starting to see the talent inside.”

4. Collaborate to deepen the talent pool.

In a fast-evolving environment, competing for talent doesn’t work. It simply leads to a tragedy of the commons. Individual companies try to grab the biggest share of the skilled labor available, and these self-interested attempts just end up creating a shortage for all.

To avoid that problem, companies will have to fundamentally change their outlook and work together to ensure that the talent pool is constantly refreshed and updated. That will mean teaming up with other companies in the same industry or region to identify relevant skills, invest in developing curricula, and provide on-the-job training. It will also require forging new relationships for developing talent by, for instance, engaging with entrepreneurs and technology developers, partnering with educational institutions, and collaborating with policy makers.

U.S. utilities companies have already begun doing this. In 2006 they joined forces to establish the Center for Energy Workforce Development. The mission of the center, which has no physical office and is staffed primarily by former employees from member companies, is to figure out what jobs and skills the industry will need most as its older workers retire—and then how best to create a pipeline to meet those needs. “We’re used to working together in this industry,” Ann Randazzo, the center’s executive director, told us. “When there’s a storm, everybody gets in their trucks. Even if we compete in certain areas, including for workers, we’ve all got to work together to build this pipeline, or there just aren’t going to be enough people.”

The center quickly determined that three of the industry’s most critical middle-skills jobs—linemen, field operators, and energy technicians—would be hit hard by the retirement of workers in the near future. Together, those three jobs make up almost 40% of a typical utility’s workforce. To make sure they wouldn’t go unfilled, CEWD implemented a two-pronged strategy. It created detailed tool kits, curricula, and training materials for all three jobs, which it made available free to utility companies; and it launched a grassroots movement to reach out to next-generation workers and promote careers in the industry.

Companies will have to work together to ensure that the talent pool is refreshed.

CEWD believes in connecting with promising talent early—very early. To that end, it has been working with hundreds of elementary, middle, and high schools to create materials and programs that introduce students to the benefits of working in the industry. These include a sense of larger purpose (delivering critical services to customers); stability (no offshoring of jobs, little technological displacement); the use of automation and technology to make jobs less physically taxing and more intellectually engaging; and, last but not least, surprisingly high wages. Describing the program to us, Randazzo said, “You’re growing a workforce. We had to start from scratch to get students in the lower grades to understand what they need to do and to really be able to grow that all the way through high school to community colleges and universities. And it’s not a one-and-done. We have to continually nurture it.”

5. Find ways to manage chronic uncertainty.

In today’s world, managers know that if they don’t swiftly identify and respond to shifts, their companies will be left behind. So how can firms best prepare?

The office-furniture manufacturer Steelcase has come up with some intriguing ideas. One is its Strategic Workforce Architecture and Transformation (SWAT) team, which tracks emerging trends and conducts real-time experiments in how to respond to them. The team has launched an internal platform called Loop, for example, where employees can volunteer to work on projects outside their own functions. This benefits both the company and its employees: As new needs arise, the company can quickly locate workers within its ranks who have the motivation and skills to meet them, and workers can gain experience and develop new capabilities in ways that their current jobs simply don’t allow.

Employees at Steelcase have embraced Loop, and its success illustrates an idea that came through very clearly in our survey results. As Jill Dark, the director of the SWAT team, put it to us, “If you give people the opportunity to learn something new or to show their craft, they will give you their best work. The magic is in providing the opportunity.”

That’s a lesson that all managers should heed.