Why is HR hiding from tech investment?

Could a lack of data skills be putting HR teams off tech investment?
Image: Shutterstock

While HR professionals are aware of why they should have a technology strategy and the benefits it can bring, many still shy away from tech investment – at least until others have adopted it first. Ashleigh Webber reports

Technology is transforming almost every aspect of our professional and personal lives: our homes are now “smart”, there are robots helping perform operations and the advent of 5G has enabled us to download data faster than ever before.

Yet, while this is going on around us, our HR departments seem to be struggling to keep pace with this digital revolution.

A recent report by global law firm Ius Laboris claims that although HR departments are well aware of the benefits technology can bring, many still don’t have plans in this area. Almost two-thirds of organisations do not have a formal HR tech strategy, but 97% agree that technology will help to transform the function and make a difference to their understanding of how employees work.

Even among larger organisations with more resources to invest, uptake is mixed. Just 53% of companies with 5,000 or more employees have a formal HR tech strategy.

“Some say there is lack of stakeholder buy-in for it. Others point to a lack of knowledge about how to best use it and uncertainty around the benefits it might provide. But even more worry it creates completely new problems they need to consider and which they are currently unprepared for,” the report notes.

One of the biggest deterrents to HR tech adoption is the increasing fear around cyber security – 67% of employers said this was a concern. Also, a quarter were worried about technology introducing bias into recruitment, despite the widely-held belief that tech is completely impartial.

“HRDs clearly need to have better information, advice, and confidence about the way they take their technology-led HR strategies forward,” the report adds.

Part of the problem is that HR professionals feel overwhelmed by the task at hand, explains Andrew Drake, client development director at consulting and tech firm Buck.

“Many HR professionals will be first timers at implementing technology in HR and therefore won’t have the experience of knowing which potential hurdles they can avoid, or mitigate the impact of,” he says. “Fear of the unknown can become a problem for those unsure about the process, particularly if the current system is competent, which may persuade them that it’s not worth the effort.”

Successful tech implementation also requires a significant time and resource investment, which might put some HR teams off, suggests Claus Jepsen, deputy CTO at enterprise software firm Unit4.

“The thought of overhauling legacy systems is a daunting task, with successful implementations taking a lot of time and effort to get right,” he says.

Drake adds: “There is a lot to consider – HR teams have to juggle numerous responsibilities when implementing a new platform and it can take a long time to fully complete. It can be a high-pressure job, not just from choosing the right platform and keeping stakeholders onside, but also creating an engaged team to assist in implementing the system.”

Fast followers v fast adopters

Ius Laboris’ The Word 2020 report finds HR professionals prefer to follow the lead of others in this area, rather than be the trailblazers who adopt new technologies before anyone else. Being a “fast follower” makes more sense than being a “first mover”, it says.

“The disruption during implementation can have a negative impact without adequate preparation,” warns Kobe Verdonck, chief executive of HR and payroll consultants SD Worx. “There is something to be said for waiting to see what turns out to be best practice first.”

“I think confidence is another factor: some HR teams lack the self-belief to really push forward their agenda and case for change,” adds Claire Williams, CIPHR’s director of people and services.

Many HR professionals will be first timers at implementing technology in HR and therefore won’t have the experience of knowing which potential hurdles they can avoid, or mitigate the impact of,” – Andrew Drake, Buck

“Linked to this is a lack of knowledge and expertise in the HR technology space itself: while larger organisations are investing in HR system specialists, it’s rare to have that specific role in SMEs.

“The HR technology market is evolving rapidly, so it can be hard to keep pace with latest developments and fully understand what impact they could have on your organisation.”

One organisation that believes it is setting an example in this field is Unilever. It brought in its bespoke total reward system, built by Endava, a few years ago and is making the technology available to other organisations.

“It’s really useful if you can learn from other people’s experiences,” Peter Newhouse, Unilever’s global head of reward tells Personnel Today.  “We’ve tried to encourage other organisations to follow us on this journey, because if you are on your own you’re having to do a lot of work from scratch and you don’t have much of a reference point. Now that we’ve got this, we’re really keen to show other people how it works.”

Newhouse says the project went well as Unilever knew exactly what it wanted from the system and what data was required for it to be useful. It was also updating an older system, so it had some basic functionality to build from.

Unilever’s system offers employees a “live” statement of their compensation package, produced using data gathered from various internal systems, and allows employees to provide feedback on their pay and benefits.

“[Introducing the system] was quite a rocky road because when you’re doing something really new you have to be able to have the vision around why it would be useful and then you have to have the persistence to keep building it through difficult times, when things don’t work out the way you expect, because you can’t follow anybody else’s example,” he explains.

A skills gap?

Part of HR’s lack of confidence around technology implementation is due to lack of confidence in their data skills, Drake suggests.

“Generally, they aren’t experts in data analytics, which makes it harder for them to know which tools or platforms will be most appropriate for the unique needs of their company,” he explains. “It doesn’t help that various software suppliers usually have their own viewpoint of how the data should be used. This can make it a confusing experience for people working in HR, who then have to decide which of the supplier’s recommendations is the best fit for them.”

HR tech currently in use

Ius Laboris asked survey respondents about the technologies currently being used by their HR functions and found:

  • 58% are using communication tools
  • 53% are using engagement surveys
  • 53% have online portals
  • 43% have automated payroll management
  • 38% have data analytics software
  • 33% use digital training solutions
  • 12% use robotics to automate processes
  • 12% have introduced wearable devices
  • 10% have chatbots

Williams says that much of the conversation around HR tech adoption has focused on the “theoretical” and why introducing new technologies is important, rather than the “nuts and bolts” of how to put in in place. This is why HR appear unskilled in this area.

“That’s because it’s difficult and complex and there are many ways in which you interrogate data,” she says. “You can simply report on what’s going on; you can analyse it to identify trends and areas where you need to make interventions; and you can use it to make predictions about what might happen in the future. Many HR professionals are stuck in stage one – reporting.”

Williams offers a potential solution: getting a central people management system in place that pulls in data from across the organisation, while getting HR professionals to develop their data interpretation skills and ability to spot data trends.

Support from other departments during implementation is also vital, as Drake says: “Securing budget and internal expertise, such as in-house data scientists, is hard as it’s not seen to directly generate revenue. Even when they get the budget, HR professionals often find there’s little IT support to get the platform implemented, leaving them to figure it out, despite a lack of experience.”

Getting buy-in

Getting an evidence base to convince business leaders and colleagues about the benefits tech can bring is important, says Claus Jepsen, but this is often is challenging.

“Looking at other businesses within the industry that have successfully implemented and reaped the benefits of innovative HR tech solutions is always a good start, but that information isn’t always readily available,” he says.

HR networking events and seminars often highlight success stories, though these might not always be completely impartial, and give HR teams the opportunity to ask their industry colleagues about challenges like how they achieved buy-in from the board.

  HR Systems opportunities on Personnel Today


Browse more HR systems jobs

Demonstrating that tech will help make employees’ jobs easier – especially for the senior managers who are allocating the funding for it – will also help generate buy-in, suggests Alexander Carlton, head of people insight and technology at Essex County Council. It introduced Selenity ER tracker, a case management platform, to help modernise the council’s processes. Before this, its HR department was reliant on a Microsoft Access database.

He says: “The ER software puts our HR policy front and centre, which is helping the team to meet the standards and timeframes we’ve set ourselves. All our documentation, correspondence and emails are securely stored in the cloud, in one location, giving us peace of mind that if a case were to go to employment tribunal we’d have evidence of compliance with our HR policy.”

Any technology that is brought in will need to solve a particular problem or improve a process – while technologies like artificial intelligence and machine learning sound glamorous, will they deliver the most value and practical useage? Ius Laboris’ report finds that tech adoption will have the most value in recruitment processes (25% or organisations polled), followed by management of the remote workforce (17%), workplace productivity (16%) and performance management (16%), so HR teams could perhaps start looking at how tech can complement these areas.

When you’re doing something really new you have to be able to have the vision around why it would be useful and then you have to have the persistence to keep building it through difficult times,” – Peter Newhouse, Unilever

As the report suggests, HR departments need to assess innovations against models such as Gartner’s “hype cycle” to ensure what they do decide to invest in is going to deliver ongoing value.

But, in order to maximise their chances of success, HR need to shift mindsets and think about how technology can bring benefits, rather than a shiny new tool.

Newhouse says: “A lot of it comes down to mentality. Most people don’t necessarily want to do things differently or don’t really know how to do things differently, so you’re always going to get some resistance… Having a tool doesn’t necessarily mean that everyone’s going to adopt it or that its worth having.”

In the same way it is transforming our personal lives, HR tech, when done right, will deliver huge benefits to employees and organisations. However, there are still many reasons for HR to be cautious.

No comments yet.

Leave a Reply