HR transformation: Critical insights from the tech stack to employee retention

Q: Can HR transformation help improve employee retention?

Chris: Absolutely. One of the best things you can do when you're seeing a pattern of higher employee turnover is to make sure exit surveys are consistently completed so you can try to identify themes of why people are choosing to leave. Similarly, in normal pulse-type employee surveys, you might also see themes that can provide valuable information and help you prevent turnover with the right actions. These surveys can play a crucial role in the development of your transformation strategy.

From a retention perspective, I think that most workers want clarity and transparency from their employer. And they want to feel valued in their organization. Knowing this, what are some easier things that can help improve employee engagement and, therefore, retention? Think about the employee experience factor. Do employees have to go to multiple systems to complete their everyday work? Are the right systems available to the right people?

To complete employees’ HR transactions such as accessing pay details, making changes to personal information or signing up for benefits, is easy-to-use employee self-service access available and utilized within the human capital management (HCM) technologies? The employee experience encompasses many things. Starting with the basics makes sense while seeking to understand further what matters most to your people.

Here are some other things to consider:

• Do your people understand the performance, compensation and benefits processes?
• How are you delivering services to your employees?
• Are any technology improvements needed?

The harder part is cultural alignment with your employees. We’re finding that today’s employees place more importance on who the company is rather than what the company is. For sure, there are generational differences in cultural alignment as well. You must document and prove that your company is who it appears to be and that stated core values are authentic, which can feel less solid as metrics. That's a bigger transformation. Because everybody can say, “We're a great culture, and we're committed to x, y or z causes.” But are you doing anything about it in practice, or is it all theoretical?

Marni: Employee experience also includes the experience of the HR team. When we talk to our clients about optimizing the HR function, the first question is, how are you serving the business and your internal clients? Several questions must be considered when determining how to optimize HR, including:

• How do we look at business stakeholders and really think about the support that HR needs to provide, and how do we drive efficiency around that?
• How will the HR role change once we automate?
• Do we have the right number of people, and are they doing the right things?

As you look at how to measure the success of transformation, it usually considers things like accelerating transaction processing times and enabling HR to focus on higher value, employee-focused activities. It should also involve more of that white glove support and less around trying to change somebody's employee record because they had an address change. Successful transformation is about taking some of that administrative burden out and leveling up the HR function.

When that is accomplished, you have a model that supports what your business objectives are and what your business leaders need. Consider the customers of HR; the function serves all of the businesses' employees, and each has a perspective on what they need from HR. In addition, business executives want to trust that HR is effective and focused on what's important. If you have five people in HR who are all focused on cleaning up issues from payroll or all needing to touch the onboarding process, then they're not actually able to focus on what will enhance the employee experience, drive retention or help build career paths, for instance. Those people do not have time to consider and plan for what's next for your business around your talent management strategy.

When we work with clients, we try to shift that dynamic, taking that administrative burden out and leveling up HR so they can be effective at:

• Making data-driven decisions
• Achieving strategic business alignment
• Enhancing the employee experience
• Driving operational efficiency

Q: Is investment in new technology needed to achieve HR transformation?

Marni:  In most organizations, technology touches every step in the employee life cycle—from the time you source and onboard a candidate, you're paying them, you're administering their benefits and you're looking at their performance compensation. Even within succession planning and into termination, you’re constantly utilizing an HR or payroll technology solution. So, if you have disparate systems or if they're not talking to each other, we look at ways to address that challenge by really looking at the full architecture.

What we find is that there's not always a unified data dictionary, for instance, and that systems are not seamlessly integrated, which can require manual workarounds and lead to no single source of truth for data. When considering an investment in technology, some questions to consider are:

• What are we trying to achieve?
• What are we trying to report on?
• Which systems need to be integrated?
• What do we want the employee experience to look like?
• What are the systems that we need to have in place, and how do we unify them?

When we talk to clients about these questions, we like to introduce the concept of simplification of the tech stack. For instance, if you have an applicant tracking system, your core HR and payroll system, a separate benefit system, a separate performance system and your finance system in a different spot, and you’re sending everything from all of those systems to a data lake somewhere else, everything becomes a jumbled mess. A lot of challenges arise in how you translate all of that data.

Taking time to simplify and minimize integration failure points and ensure your integrations are intact is an investment in data accuracy and an improvement of the employee experience. Streamline processes—actually map them out—and think clearly and thoroughly about what they should look like or how they might shift over time due to organizational change or growth.

Many times, it's not a case of having the wrong technology; it's just that the technology hasn't been set up for its uses. So, if you haven't defined what the right workflow is, you don't have the right security roles and permissions, and you haven't cleansed your data, you will not get a good result, no matter which technology you are using.

Think processes through from an enterprise level. What should the experience look like? Then get the systems to match that vision. That’s why, before advising clients to switch technologies, we always try to explore the optimization angle.

Three main tech stack points to help guide this process are simplify, optimize, and, if needed, invest in an upgrade, replacement or supplementary technology.

Q: What main issues indicate a need to reevaluate the technology stack?

Chris: Symptoms to look for are system redundancy, clunky systems integration, lack of data visibility, poor data quality and lack of ability to access needed information to deliver HR services.

For example, take a system of record. Ideally, an organization would want one source of truth for HR data—one system of record. Let's call that your core HR system. However, in a lot of organizations, there might be multiple systems that handle time and attendance, payroll and HR. Depending on how the company is set up and the number of locations, they might be using all those systems differently. That means there's no true system of record. This can severely affect HR operations and service delivery if the data can’t be trusted.

For example, inconsistent or inaccurate employee accrual data differing across all those systems is a red flag for most organizations. All the accruals need to be consistent across systems, and if they're not, you have inaccurate pay and employee records. Ultimately, this can translate to poor service delivery for your employees, which also erodes trust.

While using multiple systems is not always a sign that technology transformation is needed, looking deeper to understand the story of the multiple systems and if problems are cropping up can provide information if you need to think about the transformation of the tech stack.

Another key element that most organizations recognize right away is problems with reporting and analytics. They can't get the data they need for intelligent, useful insight because of the lack of, or poor accuracy of, the data. That’s when data-driven decision making becomes difficult. Your decision making is essentially based on guesswork. And sometimes your educated guesses are pretty good, but it would feel a lot better to have your data accurately confirm your hypotheses before finalizing any decisions.

Another issue is employee data changes that happen in one system but are not accurately reflected in other dependent systems.

Naturally, the employee experience is heavily influenced by their technology relationship to HR.

• Do they have the right systems available to manage their own data, benefits, careers, learning and performance?
• Can they get answers to their questions quickly and accurately using HR technology?
• Are the self-serve HR systems easy to use? What other options are available?

The worst-case scenario with HCM technology failure is when people aren't getting paid correctly, or there are problems with their benefits. Nothing quite makes employees start looking for another job more than experiencing multiple pay issues or not receiving the benefits they are paying for. It erodes trust.

Marni: As mentioned earlier, HR systems touch every step of the employee life cycle. If you have disparate systems, or if the systems are not integrating accurately, the way to solve that problem is by looking at the full architecture. What we find when working with clients is that there's not always a unified, overarching organizational strategy supporting what they are trying to achieve. Some questions that need solid answers include:

• What is important to report on?
• What should the employee experience look like, and what actions and tech optimally support that?

If taking a streamlined approach, simplification of the tech stack should be prioritized. Being able to minimize the number of integrations and/or ensuring that your integrations are consistently accurate is vital. We help our clients think about how to streamline processes, mapping them out and understanding what they should look like. A general guideline is to simplify, optimize and invest, taking time to look at what you have versus what you need from each of those angles as you build your strategy.

One thing that is true is that there is always a need to stay ahead of what is next because the technology landscape is changing rapidly. You can't just “set it and forget it.” Part of your transformation strategy should be to perform regular evaluations of how your tech stack is working for your people and your business.