Let me start this blog off by drawing a comparison between Banking and the Travel Industry. Think about how you interact with your Bank digitally. You can do general banking at an ATM, on-line or through a smart phone app, you may use applets which help you calculate loan repayments or the future value of your deposits. But that’s where it generally ends. Try applying for a Mortgage and suddenly you’re confronted will loads of paper, duplication of information, signatures in black ink, proving your credit worthiness, physically going into the bank, multiple approval layers and reviews and possibly a lengthy waiting period until you have an answer.
Now think about the travel industry ~ your ability to build a personalized flight itinerary, buy insurance, book a hotel and car, check what others think about your choices, selectively introduce influencing factors such as price, time and loyalty points, get progress alerts and much more ~ all done without much fuss and no people interaction. You can choose which website or apps to use rather than being confined to the actual service provider and even use your smart phone as the mechanism to store and scan your electronic boarding pass. The only time you engage with a person is at the security check and boarding gate. This is a mature digitized industry, and arguably a higher risk one than Banking.
If we compare current main-stream HR/Talent software (including SaaS) to these two industries, most would agree that they are more like the Bank scenario. On the positive side vendors are including functions such as ESS, Social Recruiting and On-line Learning which are empowering users and streamlining processes, but there are some fundamental changes required for HR to achieve equivalent digital maturity, implied efficiency, fantastic end-user experience with choice as that of the travel industry.
Here are some of the key elements that would need to change.
1. Modernize the Database Layer
The relational database management system (RDBMS) has been the cornerstone of transactional processing and reporting in HR systems for over 25 years. The need for this type of structured storage remains, but as we see new data types such as graphic, recognition, video, voice, gesture and style (eg. what I click on) being generated for work purposes, the RDBMS is not the optimal solution. There is a requirement to introduce non-SQL type databases which are able to leverage and manage the data inherent in these new data types. Non-SQL databases would allow HR to move beyond a fairly rigid and logical-based limitation (think workflow) and introduce personalized services, offerings and actions based on your unique data and interactions.
2. Standardization to Individualization
Much of the constraint in HR efficiency is inherent in the need to control and dictate a process that supports the HR software rather than focusing on the outcome. We have spent years telling managers that standardization is critical, but in reality we limit the availability of choice in HR processes because of software constraints and by implication to make HR’s life more manageable. HR vendors needs to move past this hurdle and allow users to achieve the same outcome, but through an individualized approach. The underlying data remains the same, but the “How” becomes a choice. (Think about your choices when booking an airline ticket).
3. A Dynamic Data Hub rather than the Source of Truth
We are seeing some HR solutions starting to venture down this path with interfaces or search capability to LinkedIn, Facebook and other 3rd party tools. The type of data that will be important to HR in the future will be generated outside of the core HR system by individual employees, contingent workers and applicants. We need HR solutions that can integrate to potentially thousands of external and individual databases to share information. The future Workforce will ultimately give employers the right to use their data whilst they are employed and will expect data generated during employment to be shared back to the originating database. The notion of the HR system being the source of truth for people data is outdated and is constraining innovation and creativity.
4. The HR System becomes a Platform
Removing the need to use the vendors HR software or front-end in order to access data or perform actions will allow for greater integration and ownership by line managers and employees. Much of the frustration experienced by line managers is the need to go into “another” tool to execute an HR activity or get information to support a decision. In a similar way that Expedia.com piggy-backs off the data and system of the individual airlines, hotels and car renters, HR systems should allow for direct transactions through other tools (this is not the same as interfacing). A platform approach will allow for greater flexibility and agility at the company and individual level, and will give rise to continuous improvements in other systems (finance, procurement, workforce planning etc.) to use HR data to achieve a common end result. As an example, think of how a project manager could use his project planning tool to provide performance feedback rather than going into the HR tool itself or the scheduling manager at a consultancy could “pre-approve” leave for employees “on the Bench” from his WFM software.
Many of the new HR cloud and SaaS software products are fantastic solutions, but fundamentally they have not changed for over 25 years. I implemented my first networked HR system in 1987, and while we had no smartphone apps, high speed internet or fancy front-ends, most of the modules we have today, existed in those older system.
We are stuck in a logic and transactional mind-set and as we witness the emergence of powerful new data types, it’s time to break these shackles and build software that will allow HR to surge ahead. If a high risk industry such as Travel can achieve this, there is no reason that HR can’t do the same.