The HR Transformer Blog is a Human Resources blog that aims to provide useful information, industry commentary and consulting tools for anyone with an interest in transforming Human Resources.
The blog is mostly written by Andy Spence, founder of Glass Bead Consulting and an experienced management consultant.
Babies born in the UK today are expected to live past 100. It is unlikely they will go to university when they are 18 for three years, work for two or three employers then retire with a pension at 66. The way we work is rapidly changing, shaped by new technology and evolving business models, there are now more flexible employment options than ever. For example, in a survey conducted by the RSA, it was estimated that there are 1.1 million people in Britain’s gig economy.
The Taylor Review described the goal of ‘good work’ for all improving the quality of work, whilst retaining flexibility. To achieve these aims, we need to improve the way we match work with suitable and willing workers. There are problems with our recruitment of different types of workers. These include prejudice and bias, lack of visibility of available workers, low levels of trust in centralised social networks, spam and high fees to intermediaries. We now have the opportunity to build the next generation work platforms enabled by technology such as artificial intelligence, mobile and blockchain, the underlying technology behind Bitcoin.
Blockchains are essentially distributed ledgers, which enable secure peer-to-peer encrypted transactions. There is no central database, or intermediaries needed and it keeps an immutable digital record of transactions. Beyond the latest headline grabbing crypto price bubble, blockchain solutions are being built. For example, blockchain solutions are being developed to record property transactions on land registries, logging birth certificates in Illinois and tracking blood diamonds.
There are some key features of a new generation of digital work platforms that have the potential to revolutionise our economy.
First, identity verification mechanisms, managed by individuals and authenticated by independent agencies, could include qualifications, work history and references. I have looked at how such an approach could impact HR and, through the Blockchain Research Institute, have examined the potential benefits of workers managing their own verified career profile on decentralised platforms. This approach is being trailed by the Open University, working with APPII, to place qualifications and accreditations onto the blockchain. Decentralised career networks will allow people to monetise their own data and efforts and get paid straight away and enables people to have more control over their own career history.
Currently our data is owned and monetised by centralised platforms such as LinkedIn and Upwork. A second design feature – worker-owned networks and incentivisation –could be developed through the use of digital tokens to reward and motivate users. Tokens can be used as a utility to operate within the community where each member has equity in the network. Incentivisation could range from setting-up interviews, to agree to be approached by a hirer or simply for giving a relevant reference. Tokens could be used for democratic votes on how the platform operates and to promote community-based resolutions. These tokens will also have intrinsic value over the longer-term especially if the platform is used by large numbers of people.
Third, more secure and quicker payments to workers can be delivered using digital smart-contracts between client and worker. This can reduce cashflow problems caused by delayed payments to workers and reliance on payday loans. Etch are developing pilots in the UK construction industry, paying contractors almost immediately after they have finished work. Using a combination of technologies including blockchain, the platform allows workers to share wages earned with family, including overseas, with low remittance fees.
Fourth, blockchain can help to reduce transaction costs; it is estimated that decentralised, peer-to-peer work platforms could reduce fees from between 15-35% to below 5% for many categories of workers, as the involvement of intermediaries is diminished.
Finally, a digital work audit trail, which records evidence of work done, in a tamper-proof record,will over time give more confidence to the labour market and help to prevent exploitative work practices such as unlawful deductions from wages. It will also help to ensure legislative compliance, for example with the Modern Slavery Act.
The UK is well positioned to build the next generation of global work platforms on blockchain with interested industries and technology hubs. The UK government has been positive to the benefits of blockchain, and I have given two examples from many UK based start-ups leading the way in developing blockchain solutions for the employment market. Using blockchain technology, for example, in the verification of UK degrees, will send a positive message on UK’s innovation and competitiveness and also develop useful expertise in important new skills.
It is impossible to predict exactly how industries will develop and what type of work will be needed in the future. But we have an opportunity to push a new social contract for good work using digital work platforms and this requires a big-picture approach that includes consideration of lifelong learning, education and taxation.
I am working with technologists, start-ups and early adopters to build the next generation of work platforms; let me know if you are interested in helping and if you want to learn more about blockchain, a good start would be Don Tapscott’s TED talk. If the next generation will live past 100, then we can begin to build the foundations of a better, fairer economy, one block at a time.
This was a guest post for the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce)
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People are more likely to view work as meaningful when it mattered to others more than just to themselves. In our article, “What Makes Work Meaningful?”, we highlighted some research findings on the qualities of meaningful work.
Professor Katie Bailey, from the University of Sussex, and her research team interviewed 135 people working in 10 very different occupations (retail assistants, solicitors, nurses, soldiers, stonemasons, street sweepers, entrepreneurs, priests, artists, writers and academics) and explored what makes work meaningful for them and also, what led to a feeling of meaningless.
The researchers found that that there were five key qualities of meaningful work and that times when people found their work meaningful were often intensely personal. Meaningfulness is bound up with feeling a sense of accomplishment and doing a good job.
For organisation designers, leaders and managers, it is interesting to investigate the question: What are the factors that serve to destroy the meaningfulness that individuals find in their work?
We have all worked in work environments that were dysfunctional in some way, I certainly have. Tolstoy observed that happy families are alike, but unhappy families are unhappy in their own special way. It’s similar with organisations.
"All happy organisations are alike; each unhappy organisation is unhappy in its own way." Tolstoy (Part-time #OD Consultant)
Working out why an organisation is not a positive environment is a complex task, but employees working in jobs they don’t find meaningful is likely to be a contributing factor.
Here are some of the factors that destroy meaningful work, some of which might resonate with you too? (Listed in order from most to least grievous).
The Seven Deadly Sins of Meaningful Work
1 Disconnect people from values
Those interviewed often talked about a disconnect between their own values and those of their employer or work group as the major cause of a sense of futility and meaninglessness. This issue was raised most frequently as a source of meaninglessness in work. A recurring theme was the tension between an organisational focus on the bottom line and the individual’s focus on the quality or professionalism of work. One stonemason commented that he found the organisation’s focus on cost “deeply depressing.”
2 Take people for granted
The lack of recognition for hard work by organisational leaders was frequently cited as invoking a feeling of pointlessness. For example Sales Assistants talked of bosses who did not thank them for taking on additional work.
3 Give people pointless work
Individuals had a strong sense of what their job should involve and how they should be spending their time. A feeling of meaninglessness arose when they were required to perform tasks that did not fit that sense. Nurses, academics, artists, and clergy all cited bureaucratic tasks and form-filling not directly related to their core purpose as a source of futility and pointlessness.
4 Treat people unfairly
If people feel that they can’t trust their leaders to be fair, open and equitable, then they are unlikely to find much meaning in their work. Forms of unfairness ranged from distributive injustices to freelance musicians being asked to write a film score without payment.
5 Disempower people
Quite often a sense of meaninglessness was connected with a feeling of disempowerment, or overriding people’s better judgment over how work was done. Lawyers talked about being forced to cut corners to finish cases quickly.
6 Isolate people
Feelings of isolation or disconnecting people from supportive relationships at work were linked with meaninglessness. This could occur through deliberate ostracism on the part of managers, or just through feeling disconnected from co-workers and teams. Entrepreneurs talked about their sense of loneliness and meaninglessness during the startup phase of their business, and the growing sense of meaningfulness that arose as the business developed and involved more people with whom they could share the successes.
7 Put people at risk
Unnecessary exposure to risk of physical or emotional harm was associated with lost meaningfulness. For example, nurses cited feelings of vulnerability when left alone with aggressive patients.
These seven destroyers emerged as highly damaging to an individual’s sense of their work as meaningful. When several of these factors were present, meaningfulness was considerably lower.
For those who are involved in managing teams or implementing digital transformation initiatives, then understanding which features makes work meaningful for people is important.
In my article, The Campaign for Meaningful Work, I shared some thoughts on the “why of work” and the flaws with our past initiatives around improving employee engagement. One impact of this, is that of ‘displacement’. In HR, we could have spent the effort and energy (read blood, sweat and tears) on finding out what really does drive employee wellbeing and productivity in our organisations.
As an optimist, I believe organisations have the opportunity to solve current organisational issues if it brings in evidence-based approaches and capitalises on the employee/organisational data it has. With well-designed and funded research programmes carried out by academics and practitioners we have a better chance of creating jobs that provide meaningful work.
Thirty seven percent of British workers think their jobs are meaningless, according to a YouGov survey, which is a really shocking statistic if you think about it.
In my article, The Campaign for Meaningful Work, I shared some thoughts on the ‘why of work’ and the flaws with our past initiatives around improving employee engagement. In the absence of a strong causal link between engagement and productivity, my ‘hunch’ was that ‘meaningful work’ is important for our own personal sanity and well-being.
So the question for leaders in organisations and the HR community, is,
How can organisations provide work that is meaningful?
There are different ways of responding to this question and one source of evidence is to look at the scientific research.
As part of the research the team interviewed 135 people working in 10 very different occupations (retail assistants, solicitors, nurses, soldiers, stonemasons, street sweepers, entrepreneurs, priests, artists, writers and academics). The group was asked to tell stories about incidents or times when they found their work to be meaningful.
According to Katie, “the overwhelming majority of people seem to find meaning in at least some aspect of their job. In fact, 86% of people said that their jobs were meaningful”.
The team found that there were patterns of work from their research which they categorised as five qualities of meaningful work.
Five Qualities of Meaningful Work
Self-Transcendent, or working for a higher goal
People are more likely to view work as meaningful when it mattered to others more than just to themselves. From the interviews, an example is the garbage collector who found work meaningful at ‘tipping point’ at the end of the day when refuse was sent to recycling. This individual could see his work contributed to a clean environment for his grandchildren.
Meaningfulness is not always a positive experience. We don’t walk around in a euphoric state all day at work. For example nurses use their skills to ease the passing of patients at the end of their lives.
Meaning can come and go during the working life, rather than an everyday occurrence. For example, the lecturer “feels like a rock star” after delivering a good lecture, or the stonemasons leaving their mark into a stone that might be discovered in hundreds or years.
Meaningfulness was rarely experienced in the moment, but rather in retrospect and on reflection when people were able to see their completed work and make connections between their achievements and a wider sense of life meaning. One academic talked about research he had done for many years that seemed fairly meaningless at the time, but 20 years later provided the technological solution for touch-screen technology.
Work that is meaningful, on the other hand, is often understood by people not just in the context of their work but also in the wider context of their personal life experiences. An example was an entrepreneur’s motivation to start her own business included the desire to make her grandfather proud.
So, what insights can we elicit from this research?
First, it emerged that the individual feels that they have done a good job and therefore experience a sense of achievement or pride. No one said to us, “Hey, I did a really poor job today, but it meant a lot to me.” For example, the street cleaners talked of looking back along the street they had just cleaned and feeling they had made an important contribution to the neighbourhood. The stone masons explained that they found their work meaningful when they had successfully completed an intricate carving.
Secondly, in most cases it was important that the individual could see they had contributed to their team, other individuals, or a wider cause. Some talked of the importance of a sense of camaraderie or belonging, others talked of times they felt recognised or valued by clients or the public. For instance, the retail workers talked of helping vulnerable elderly customers.
Finally, the times when people found their work meaningful were often intensely personal. One entrepreneur had started her bakery business to make her grandfather proud of her. A hesitant author was emboldened to embrace her craft following a chance encounter with another customer in a stationery shop who assumed she was a writer. A soldier talked of the importance of her family being present at a dinner held to celebrate her military service.
Over the years I have shared my ideas about making work more meaningful, including linking the work to something bigger, empower people to organise their own work and ditching that annual engagement survey.
If you really want to understand what employees think about their job, then ask them. “Feedback is the killer app” for management, as Josh Bersin says. New technology makes this possible whether using pulse tools or analysing responses to open questions such as Workometry.
For those who are involved in designing new organisations, managing teams or implementing digital transformation initiatives, then understanding which features makes work meaningful for people is important. You might also find this article of interest, "The Seven Deadly Sins Preventing Meaningful Work". Hopefully we will see more workers finding meaning in their work in the future. I am looking forward to seeing how this fascinating research area develops.
We know that successful team dynamics is critical in building organisations, however many of our HR and people management processes are still designed around the individual.
We have embedded ‘institutionalised silos’ such as performance management, employee engagement, induction and training, that are all geared up to individual performance, but focus much less so on the impact on their team or organisation.
According to Deloitte, 88% of respondents of a global HR survey, believe building the organisation of the future is an important issue. This is sweet music to my ears, after years of fumbling around the employee engagement survey wilderness, we can start looking at the bigger picture and organisation structures, and ask questions like:
How does team cohesion impact performance?
Is there a relationship between team collaboration and attrition?
Does increased collaboration impact output?
Does a hierarchical structure impact retention?
Who are the most influential people in our organisation?
Can we see what good leadership looks like?
Can we detect bottlenecks in an organisation?
Which individual are at risk of leaving the organisation?
Can we detect ‘silos’ in our company? (the answer is always yes to that one!)
What is very surprising is how little analysis and research is done into how our teams operate. One way to gain a better understanding on these questions is Organisational Network Analysis (ONA). One method is for employees to complete quick pulse surveys which combine “ME” questions (My opinions count) and “WE” questions (I would like to appreciate the following individuals for helping me in my day-to-day work). Open feedback questions are also interspersed to understand sentiment and key issues.
The end result is a visual representation of your team dynamics – the example in the image above, is an ONA diagram from OWEN Analytics and was used to understand team dynamics in a pharmaceutical organisation.
In my article on the use of wearables and emerging technologies in the workplace, I highlighted that The Quantified Workplace will be introduced, but only at the speed of employee trust. Looking at relationship patterns might also give insights into understanding trust.
This type of approach throws up some interesting insights.
Research by Rob Cross, a leading researcher in ONA, found that highly connected people are among the least engaged in a company. So your most valued staff, those go-to people, are often hidden, underappreciated and sometimes over-worked.
Mark Bolino of the University of Oklahoma points to a hidden cost of collaboration. Some employees are such enthusiastic collaborators that they are asked to weigh in on every issue. But it does not take long for top collaborators to become bottlenecks: nothing happens until they have had their say—and they have their say on lots of subjects that are outside their competence.
In most cases, 20% to 35% of value-added collaborations come from only 3% to 5% of employees according to research by Rob Cross, Reb Rebele and Adam M.Grant, covered in their article in Harvard Business Review, “Collaborative Overload”.
If we go back to the questions on what causes collaboration, effective teams and higher productivity, then ONA can play a big part in helping us understand what is going on in our organisations.
Our people management practices are rapidly changing as we move to a world with collaborative teams working with different employment terms in different countries. ONA is a technique that people analysts can add to their tool-kit and help us to uncover the hidden dynamics of team effectiveness rather than the obsession with individual achievements.
By being able to visualise teams relationships we can begin to build a strong foundation for organisations of the future based on a deeper understanding of effective teams. I am looking forward to sharing more case-studies and success stories at PA World over the coming years.
Of all the emerging technologies, blockchain is the least exciting as a technology, but potentially the most impactful on society. Blockchain doesn’t converse with you, it won’t 3D print your house or cut out your kidney stones with precision while the surgeon has a cup of tea. In terms of technology, it is about as exciting as relational databases.
When you think of blockchain, you might think of Bitcoin. Bitcoin is a cryptocurrency that requires a maths degree to buy and ownership of a laptop that never crashes. Yet Bitcoin is just one of many different cryptocurrencies that uses blockchain as its core technology. And blockchain technology is also being used outside of financial services.
What Is Blockchain and what is it’s value?
Simply put, a blockchain is a decentralised database shared among a network of computers, all of which must approve an exchange before it can be recorded. Typically if we want to send someone some money, we would need a third party, like a bank to verify the exchange. The advantage of blockchain is that it stores an indelible ledger of all previous transactions in a string of ‘blocks’, meaning we know who owns what and who can send what to whom.
Individuals and organisations can use blockchain to:
Exchange digital assets without friction – a central ledger is no longer required which is why there is so much excitement in financial services. Transactions between people can happen nearly instantly without any third party.
Execute smart contracts – documents can be stored electronically, and be verified as authentic. So we have unbreakable contracts.
Store digital records – you can have an electronic ID and all sorts of information associated with it, your verified electronic profile.
In an era where trust has been eroded in our institutions, politicians and even fellow citizens, anything that can strengthen trust should be viewed positively. In my article, The Quantified Workplace: Technology vs Trust, I commented that potentially intrusive technology will be introduced in the workplace, but only at the speed of employee trust.
Given its practical attributes of storing digital records, executing smart contracts and as an efficient exchange, there are many real-life uses and experiments. This ranges from fixing broken business models e.g. Intellectual property in music to the more personal, recapturing our identities, so the ‘virtual you’ is actually owned by you.
“Blockchains automate away at the centre. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer.” Vitalik Buterin, founder of blockchain platform Ethereum
As Don and Alex Tapscott argue in their book, “Blockchain Revolution”, blockchain could be the great economic leveller – a tool to strip out the middlemen from our economy and reward the makers and doers who truly create value. So there is definitely a group of political enthusiasts who see blockchain as transforming society.
What’s the potential impact of blockchain on HR and people management?
Given the practical attributes of blockchain promising to cut out middle-men and provide unbreakable contract, what might be the impact on people management, organisations and work?
In Japan blockchain technology is being developed to create a prototype resume authentication database for job hunters with the aim of increasing transparency and in turn address fraudulent credentials.
“With a resume authentication database, the verification of official certificates and contracts, which have until now been typically done on paper, could be carried out using the blockchain database” said Osamu Yonetani, CTO of Recruit Technologies.
Imagine having all your employment related details associated with your electronic signature in one block :- security access, insurance, payroll, expenses, work performance, employment history, psychometrics etc. The employment contracting process would effectively be redundant. You could work almost immediately, with quick payment. The role of the recruiter will not be needed, but that’s the least of the disruption. This raises questions about the nature of the employment contract and the ‘job’ itself. Most of us will then be in the gig economy, enabled by transparent contract and payment mechanisms.
Chronobank.io, an Australian short-term work platform, is developing a Blockchain-based financial system for freelancers or contractors to obtain work and pay them in their own “labour-hour” token. They aim to disrupt the HR, finance and recruitment industries with their upcoming platform. I spoke with Sergei Sergienko CEO ChronoBank, who told me “Our goal is to make a difference in the way people find work and get rewarded for their labour, doing it decentralised and without the involvement of traditional financial institutions.” This is potentially transformative, and Sergei’s message to HR leaders was this change will happen, so find out more and work to develop this next wave for your organisation.
Which brings us back to the original question, what’s the potential impact of blockchain on HR and people management?
Blockchain could fundamentally change how we manage people and HR, then the impact on HR is an irrelevant question if some of these predictions come true as we will have moved to very different economic models.
I am looking forward to seeing how this develops, and in our field, and maybe seeing some #disruptHR start-ups pitching blockchain solutions at future HR Tech World conferences. Be great to hear from anyone out there developing blockchain models and technology in HR.
Most companies will review last month’s attrition figures, long after the star employees have had their farewell leaving do. This is the equivalent to looking behind in the rear-view mirror, whilst travelling at speed – you may know what’s behind you but it’s too late to do anything about it. Or do you look forward, anticipating trends of employee flight risk and making small adjustments as you travel down the road? After all, if you can see the possible obstacle ahead you have a better chance to avoid it.
As wages continue to rise, we see more employees dipping their toes in the welcoming water of the job market. Keeping our best employees with us on our journey is going to be hard and managing the cost of unwanted employee turnover is going to be even harder.
Marc Andreessen, co-founder of Netscape and early Facebook investor, has said,
“Five great programmers can completely outperform 1,000 mediocre programmers.”
So how do we quantify the cost of losing our best employee?
The calculation for the cost of losing an employee varies from one organisation to another, but typically includes hiring, on-boarding, training and ramp-up time to peak productivity. Other costs that need to be factored are loss of morale due to high turnover, higher business error rates, and a possible impact on a company’s culture and customer reputation.
Deloitte estimate the cost of losing an employee can range up to two times the employee’s annual salary. Given the significant financial impact, it is surprising that 40.7% of UK organisations do not measure the cost of attrition, according to XpertHR.
This prompts some basic questions organisations should be asking about attrition such as:
Do you have a good idea of what your attrition levels will be over the next few quarters?
Do you calculate the probability and the impact of losing an employee?
Do you know the actual cost of attrition in your business?
Can you prove which factors cause unwanted attrition in your organisation?
Do you know which interventions are more likely to keep the higher performers (the five great programmers) and let the laggards leave?
Looking at attrition in the rear-view mirror
Many HR teams measure who has left the company in the last period, in which division, and what type of role as a way of broadly measuring attrition. However, looking in the rear-view mirror only describes what’s behind us, it doesn’t tell us what is coming up, which makes it harder to prepare for unexpected change. By the time we have realised it is too late.
Looking forward using predictive analytics
What we really need is to manage attrition more proactively by understanding who is more likely to leave and what the impact of them leaving would be on the business. In a smallish company this is straightforward, but where you have larger teams, spans of control and distributed teams this becomes much more difficult.
Credit Suisse found that a one-point reduction in regretted attrition saved the bank $75 million to $100 million a year. So building an attrition prediction model is one way for HR to make a substantial impact on the bottom-line. See “The Algorithm that tells the boss who might quit”.
Using an evidence-based approach, we need to critically assess different sources of evidence. Building your own predictive model is one way of building up a reasonably strong source of organisational evidence. It is also worth reviewing the scientific research as another source of evidence, see this meta-analysis for example and reference below.
Tej Mehta from Owen Analytics, explains the benefits of using predictive analytics,
“A typical approach will brainstorm all the potential factors that might cause an individual to leave. These are then used as inputs into machine learning algorithms that can predict flight risk with a high degree of accuracy which is often over 80%.”
The attrition landscape needs to be revisited if organisations are to remain competitive as they make their respective journeys. Predictive analytics can be a step change for the HR community, at the very least providing some useful dashboard controls to enable better decision making.
I hope this article has given you some useful ideas and maybe some inspiration. As always I would be interested in hearing about your examples using predictive analytics to better manage retention and attrition. In response to our clients’ request to provide this service, are delighted to announce that we have launched a new service “Managing Attrition using Predictive Analytics”.
Some other useful resources to improve attrition management
The HR Tech Congress, the second held in Paris, was yet again a splendid mix of stimulating speakers, great organisations and brilliant technology. However, the smell of revolution was in the air…
Professor Gary Hamel made a rallying cry that was so loud it could be heard 17km away in The Palace of Versailles,”Kill bureaucracy and you’ll unclog the arteries of business,” whilst Dr.Daniel Thorniley warned us about the economy, and it was not good news. Debt, low growth and a rising populist tide in politics means soon we will all be working in the gig economy, whether we like it or not.
How will we survive this extended downturn?
“What will we eat?” they ask.
“Let them eat cake!” the response of the ancien régime.
(Or as Marie Antoinette did not say “Qu’ils mangent de la brioche”. But ‘let them eat brioche’ doesn’t have the same ring to it – anyway I digress)
Gary Hamel told the HR audience to “to stop fiddling at the margins” and take up arms against bureaucracy, the biggest barrier to productivity in business. Hamel even invented a word for this corporate disease “Bureausclerosis”
If you can spell it, surely you can destroy it, right?
The symptoms of bureausclerosis Hamel described were: added management layers, isolation of leaders, longer decision cycles, increase in formalized policies, rule proliferation, increase in power of staff groups, organization becomes primitive, loss of ‘voice’ from staff, increase in legal processes, decrease in risk-taking, and the politicization of it all.
Ready or not, here comes the Gig Economy
If Professor Hamel gave us some examples of what was needed to transform business, Dr. Daniel Thorniley provided us with the big picture on the economy. We are living in an unprecedented period of low growth where 63% of youths in the Eurozone do not have proper contracted employment. Many will be forced into the Gig Economy, and this doesn’t just mean a nation of musicians and artisans, but also hosts, drivers, plumbers and (of course) humble HR consultants. Many will struggle to make a living or have the security that the previous generation have taken for granted. I read Thorniley’s latest 46-page report, Global Business Outlook 2016-2020, with the cheery subtitle, “Why there is no future for your children.”
Now all this makes for gloomy reading and we might expect delegates of HR Tech Congress to dust off their Édith Piaf records and get out the whiskey,
but many could be heard asking, “OK, it all sounds terrible, but does this impact me?”
“Mais oui, bien sur!” (my franglais is improving)
In HR, changing business models and global economic drivers will determine whether we are scrambling for candidates, sweating our employees for discretionary effort, or working on clever algorithms to automate work. I would guess a larger proportion of the 3,500 delegates will be joining the gig economy over the next few years.
One thing’s for sure, we might not be able to guess where the economy is going, but there are plenty of technology developments to get excited about.
Software is eating HR
So, if our business models and organisations are changing before our eyes, this raises some big questions.
How does this affect the way we think of work, organisations, and society?
Do our old people management practices still work?
How does HR respond to this? “New systems anyone?”
This message seems to resonate with the HR Technology industry and is especially true now.
My concern is whether we have the right set of people management practices for the type of organisations that Hamel says will flourish? Are we in danger of simply crystallising the processes that served us well in the last century?
These and other questions present the challenge for HR and the technology industry today.
I had the pleasure of introducing some excellent presentations in the well-attended HR Tech stream, so could not attend as many presentations as usual. However, my fellow blog squad comrades have done a great job of sharing what they saw.
I was also fortunate enough to look under the bonnet of some of the latest tech tools, and I am particularly interested in the use of predictive analytics and artificial intelligence in solving business problems. I saw some useful tools that work as a stop gap for current recruiting/ATS software, e.g. tools that help prioritise recruiters workload using simple algorithms.
There were some nice looking visualisation tools that sit on top of current HRIS systems showing historic data. However, I was disappointed that I didn’t find any genuine machine learning or pattern recognition in this space, despite some of the marketing claims. People Analytics is an exciting area in the early stages of its development. However we need to overcome some key challenges to be successful, see my recent post, “7 Challenges That People Analytics Must Overcome”
Building the new HR Republic
There were many great stories of companies building the new republic, making progress, solving business problems and embracing technology. Technology is indeed being used to transform whole industries and the biggest impact on HR will not be on how we operate, but on how we manage work in the future.
For those in HR and leadership roles, there is plenty we can do before we even think of buy new software. We can start by asking, what is the evidence that this practice (e.g. performance, talent, hiring, learning, engagement) works in our organisation now, and will do in the future?
It was a dismal economist who gave our profession the name, Human Resources, rendering people as an asset to manage.
Maybe this term also belongs to the last century along with Bureaucracy?
As with many revolutions, there will be casualties, but change can pave the way for a new order and a better approach to people management.
So when managers in your organisation ask about the conference and the impact on their staff, you might mention defeating bureausclerosis, the challenges of low growth and the gig economy.
If they then ask, “But, what will they eat?”, just simply reply,
I am excited about the role People Analytics will play in transforming organisations. I have seen some real success stories where organisations have incorporated more data-driven decisions about people and work.
David Green highlights some great case-studies in his article, 20 People Analytics case-studies, which includes, Virgin Media, who reduced sickness absence rates from 9% to 4% saving the business £750,000.
There is clearly a journey to be taken where we move from our current starting point, where we often distrust the data we have on employees, to a place where we can better predict sickness absence, attrition and productivity.
Most organisations are already on this journey to some degree. The percentage of companies that believe they are fully capable of developing predictive models doubled this year, from 4% in 2015 to 8% in 2016, according to research by Deloitte, “Global Human Capital Trends 2016”. However this journey will have some challenges that we will need to overcome.
Despite the hype, there is low adoption of People Analytics at the moment – here are some of the challenges that I think we need to address and also some suggestions of how WE (in the broadest sense) can overcome these challenges.
As always, I would welcome your views on the challenges, and especially ideas, and examples of how to overcome them.
Challenge 1 – We prefer ‘gut feelings’ to make people-based decisions
Daniel Kahneman, in his book – “Thinking, Fast and Slow“ described two main types of thinking well with their inherent biases.
When you are under time pressure for a decision, you need to follow intuition. There is nothing wrong with using our intuition or gut feeling, but as Kahneman has said “you should not take your intuitions at face value”
So back to the challenge for those with skills in People Analytics, if your business customers do not believe that data is useful then they will not ask for it, or use it, or believe in it. Which is a fairly big challenge!
So how do we overcome this challenge? Maybe there is a middle way between the fast and slow lane?
What you can do:
Make sure the boss ‘gets’ using evidence-based data. If you are the boss, then make sure your new hires also ‘get’ it.
Make intuitive decisions more data-based AND our data-based decisions more intuitive
Challenge 2 – The Peak of Inflated Expectations
Emerging Technology Hype Cycle – Gartner
In HR we have always had business problems, statistical knowledge and access to piles of data, so why the hype around People Analytics now? Well the Cloud and Big Data sales machine is probably talking to your boss right now. You know the pitch, “Analytics pays $13.01 for every dollar spent”.
Managing expectations on people performance with the CEO should be your job and as mentioned, People Analytics has delivered some good early results, but one of the biggest dangers right now is far too much hype.
Since 1995 Gartner has been measuring The Hype Cycle, the promise of emerging technologies, and shows five key phases of a technology’s life cycle. Is People Analytics in danger of succumbing to the hype before it delivers benefits?
Peak of Inflated Expectations -> “Early publicity produces a number of success stories – often accompanied by scores of failures. Some companies take action; many do not”
Trough of Disillusionment -> “Interest wanes as experiments and implementations fail to deliver.”
So what if the CEO gets excited about HR once in a generation you might say? What happens if we set expectations too high for People Analytics and do not deliver? It will not be the first time that HR has over-promised and under-delivered based on “best-practice”. At some point you will need new recruits in a competitive market which needs new software, but there’s only so many times you submit a business case with a decent ROI. What you really need is some early positive results.
What you can do:
Set realistic expectations on people analytics – aim low and over-deliver.
Start with a specific business problem
Learn from the early adopters
Challenge 3 – HR doesn’t need Big Data, it needs Big Questions
“Without data you are just another person with an opinion” W.Edwards Deming
But, “Without questions, you are just another person with data”
I had a client a few years ago, who trained a group of HR Business Partners as 6-Sigma Black Belts. After the training, they demanded a data dump from Peoplesoft. "What problem are you trying to solve?” and the reply was “We don’t know yet until we see the data…”.
The example highlights the need to solve business problems not analyse data. Strategy is all about making choices, so if you run an analytics team, generate as many questions and hypotheses around a particular problem area as you can by casting the net widely.
What you can do:
Generate many wide ranging questions and hypotheses which solves business problems
Coach Business Partners and HR into developing hypotheses and sharing the insights back to the business
Challenge 4 – We need the right tools to do the job
As you might expect from the provocative title, they don’t hold back :-
“the HR analytics industry, which is largely based around products and services, which too often fail to provide the tools for HR to create and capture the strategic value of HR data.”
In other words, our HR Systems, data and reporting tools might not help us answer the business questions we have. Many HR operational systems were simply not designed for analytics, and although they are improving, I expect to see more sophisticated analytics functionality in subsequent software releases.
What you can do:
Keep discussing your needs with your Technology Partners
Collaborate with others in the industry to source great tools
Challenge 5 – No confidence in the underlying frameworks
To use a house analogy, there is no point having cameras & sensors, unless the house is structurally sound in the first place. We need to have a roof, secure doors and running water before we can add sensors that optimise our heating, detect poisonous gas, detect intruders etc
As Max Blumberg says in his article, People Analytics: Who’s fooling who? “if like most people you don’t believe in your organisation’s competency and performance management frameworks, then you certainly aren’t in a position to believe in the results of statistical analysis based on data generated by these frameworks. As the old acronym GIGO says, Garbage In, Garbage Out.”
What we are crying out for is a theoretical framework to test our hypotheses about people, behaviour, productivity and organisations. We are not there yet, but I am optimistic that over the next few years we can develop the skills and knowledge to increase our confidence levels in people management.
What you can do:
Stop doing people analytics until you’ve fixed your frameworks.
Collaborate with academia and peers in other organisations
Challenge 6 – Show me the Money
The problem is, you can show the C-Suite pretty data visualisations of their organisation showing attrition, gender balance, and average commuting time, but the hard truth is the CEO will only really listen when you link it to Revenue and Profits. When it comes to employees, the holy-grail is increasing employee productivity. We need to link as much as possible to employee Productivity to get ‘buy-in’.
What you can do:
Develop your own internal measures for employee productivity
Try and link your initiatives to improving employee productivity
Challenge 7 – Structural issues with HR Operating Models
I have been speaking and writing about some of the structural issues with HR Operating Models for many years (see for instance, Is your HR Operating Model Fit for the Future? If the supporting structures for HR analytics are not in place, then the probability of success is lower.
A couple of structural issues with HR Operating models that many orgs sill grapple with are:
Working in silos. In HR we have developed some great experts over the last few years (e.g. talent, learning, reward etc) yet we have also become a function of specialists creating more silos which makes it harder (not impossible) to work together as a whole to deliver HR (Business) strategy.
The role of HR Business Partner. The role was introduced as a strategic partner and account manager for HR Services, however there have been challenges. Many orgs are on their 3rd or 4th revisions of this role and HR BPs are key to solving business problems as key customers for an analytics service. However we are in a transition phase, as described by “Most HR BPs won’t cut it…” from Luc Smeyers and “Stop Hiring Data Scientists if you’re not ready for Data Science” from Greta Roberts.
We will never have the optimal HR Operating Model with managers, systems, HR experts working seamlessly together. However we can strive to continually improve the model using People Analytics to help rethink many of our HR programmes and influencing how we deliver our people management.
What you can do:
Learn some of the lessons from others in HR Transformations over the last few years
Ensure Business Partners have good analytical skills and are inquisitive about the business. Provide coaching on basic statistics and people analytics where needed.
Continually evaluate the efficacy of our HR and Management initiatives
My “gut-feeling” is that People Analytics will help reinvent organisations. We are in the early stages of a journey and we can all help by sharing methods, learnings and positive results. We need to keep an eye on some of the near-term challenges as we move forward. One key action within our control is to set realistic expectations and solve specific business problems. This can get our business partners more interested into a different way of working. The technology industry will probably evolve to roll-out improved offerings with time. And our evidence base should get better as we improve data quality and start to ask better informed questions. Although the ecosystem I refer to is complex, with diverse vested interests, we should continue to encourage sharing and collaboration as much as possible.
For the last 19th years, Sierra Cedar have been conducting a survey on HR System adoption. This demonstrates admirable commitment to a market that ebbs and flows like the form of our star strikers in the European Football Championships (who are only on their 15th edition). The survey is an invaluable resource to those working in the HR Technology ecosystem – the report can be downloaded here. In this article I wanted to share some of the findings that caught my eye, but mainly to ask you to complete the survey for your organisation, before 8th July, so that this report is even more valuable next year!
The Big 2 still dominate – I am not talking about the Germany and Spain duopoly in Euro 2016, who have won most cups with 3 each. In European HRMS adoption, the ‘Big 2’ tech providers, Oracle and SAP, dominate with 83% of the market. SAP (HCM plus SuccessFactors) make up 52% and Oracle 31%. ADP, Kronos and Workday make up 25%. This might surprise delegates who were at HR Tech World Spring 2016 in London, for example, noting the highly visible presence of CoreHR and Workday. The ‘Big 2’ have their legacy customers, the onus is on the many challengers to prise them away and build their market share.
How much does this software cost? For large companies (with more than 10,000 employees), the average license cost per employee per year, is $116 (or €102). For smaller companies with less than 2,500 employees, this cost is much more at $394 (€348). This excludes implementation costs. Now for this amount, you might even get you a ticket to one of the group stage matches in France. In fact, why not spend the money on football tickets instead, your employee engagement scores will surely increase? *nervous laughter*. When you have such highly paid employees on your payroll as Cristiano Ronaldo, who has a salary of €21m per year apparently, you want to get the most out of them.
Could wearable technology give us insight into players’ performance? 55% in the survey think using wearables will “increase workforce productivity”. 16% of organisations in the survey are using or evaluating wearable technology at the moment. According to this article we might see Wayne Rooney cavorting around Old Trafford wearing a tracking device.
The most common pathway to an HR Technology Transformation, with 26.5%, is “Rip & Replace” which is basically moving everything all at once to the Cloud. This is like selling your 3 most reliable players in a winning team – a tactic that is a bit risky!
Contrary to reading the industry press, not everyone is in the HR Cloud yet, it is estimated that about 50% of core HRMS is still on premise. This might have something to do with the residual customers of the Big 2 taking their time on the upgrade path and working out options, and a rump of organisations where moving to the cloud brings more security and privacy issues. One thing’s for sure, whichever country’s team wins in Paris will be in Cloud 9.
As you read the survey report, bear in mind the results are based on an adoption and do not represent market share. In my view, it’s always useful to read these surveys for good background context. This survey also highlights some of the trends the analysts are seeing and refers to useful frameworks used. If you are considering making changes to your HR Systems, always go back a step to understand what your business really needs from HR and how this will support your HR Operating model. This article might also be useful – How to Earn your HR Cloud Tattoo.
Finally, make sure you complete the SURVEY before 8th July and good luck to your team in Euro 2016!
John Sumser declared “The end of the HR enterprise software era” at HR Tech in Amsterdam 2013, we have now automated pretty much all we can. Software continues to feast on HR, starting with the horrible bits we don’t like and leaving the tasty morsels to our managers and HR people and change superstars – well that’s the theory anyway.
Lots of orgs have moved to the Cloud, so we are accumulating lots of lessons and methods to internalise before embarking on our cloud journey. There was a whole steam dedicated to user adoption for example with presentations from Rolls Royce and Cushman & Wakefield. Before moving to the Cloud, give this a read, How to Earn your HR Cloud Tattoo, and maybe share your case-study, and tattoo, at the next HR Tech Congress?
The ‘Big 2’ tech providers dominate in EMEA with HRMS adoption with 83% of the market. SAP (HCM plus SuccessFactors) make up 52% and Oracle 31%. ADP, Kronos and Workday make up 25%. This might surprise some delegates noting the presence of CoreHR and Workday for example. The ‘Big 2’ have their legacy customers, the onus is on the challengers to prise them away and build their market share.
The average cost per employee per year for SaaS for large companies (>10,000 employees) is $116 and for smaller companies (<2,500 employees) this cost is $394.
Wearable Technology – 16% of orgs in the survey are using or evaluating. This is an interesting trend to watch which I highlighted in my recent article Quantified Workplace: Trust vs Technology? 55% using wearables believing the benefit to be “increased workforce productivity”.
Josh Bersin summarised Deloitte’s research “92 percent of companies believe that redesigning the organization is very important or important, making it No. 1 in ranked importance. Companies are decentralizing authority, moving toward product- and customer-centric organizations, and forming dynamic networks of highly empowered teams that communicate and coordinate activities in unique and powerful ways.”
This is music to my ears! For too long, companies have spent too much time tweaking round the edges of on initiatives such as employee engagement. This is often a distraction from solving the root cause of business problems and the looking at the big picture.
As we move to new business models and organisational structures, we will need to redesign HR, and the software that supports this. This will quickly supercede some of the current HR debates around talent, performance management and employee engagement.
The winners will be those that embrace diversity
Diversity was a theme from this conference, including a presentation from Martha Lane Fox, who made a powerful case for UK plc to take a lead on the internet as a cause for good. But we have some work to do…
Heidi Spirgi from the Marcus Buckingham Company shared research that should tie your stomach in a knot, with her presentation, Women & Technology, the findings speak for themselves :
Currently only 17% of people working in tech in the UK are women
UK is experiencing a digital skills gap that is forecasted to reach 745,000 workers by 2017
60% of college graduates are women in Europe
The first good reason for diversity is fairness, allowing all member of society to flourish.
The second good reason for diversity, is that if your organisation does not pull its ideas from the widest talent pool to solve problems, then you are likely to lose competitively.
The concept of Diversity of Thought and this paper is worth reading. As Dorothy Dalton has said, “how can we talk about gender as a ‘diversity’ issue when 50% of the population are women, it’s a balance issue.” Lots more we can do here…
Challenges with People Analytics
There were some presentations showing success in the use of people analytics to solve business challenges such as determining office location, retention, absenteeism and successful recruiting in the Smart Data stream.
This year, the percentage of companies that believe they are fully capable of developing predictive models doubled, from 4 percent in 2015 to 8 percent in 2016.
This is a hot area, but in danger of not fulfilling its massive hype due to structural issues we have in HR such as skills, data, systems and robust frameworks.
Using a house analogy, there is no point investing in smart sensing technology when the plumbing and heating don’t work. I will be writing more about the barriers to People Analytics in subsequent articles.
Startups disrupting HR?
The start-ups seemed to be even busier than previous conferences with well attended sessions and stands. The main areas were in employee engagement, recruiting, learning, employee feedback, onboarding & employer branding.