Two truths and a lie

Insights from the 2017 Human Capital Technology and Service Provider Day

Two truths and a lie
Posted by Dave Smith on June 8, 2017.

Each year, Deloitte Consulting LLP brings together our key fellow members in the HR ecosystem—HR technology and service providers—to talk about the future of sustainable HR and the health of the ecosystem we share. Last year’s Provider Day event focused on the theme Understanding and serving the HR buyer and included our first-ever HR buyer guest panel. This year we gained considerable insights from providers on our theme, Sustainable HR: Agile evolution for the future. We were especially interested in perspectives that providers shared with our own Deloitte Consulting human capital leaders during social times and one-to-one meetings, and this article reflects our informal poll of participants about the key themes from the event.

The success of the event—market power represented by the 35 HR providers in attendance (who have $165B in annual product and services revenue)—ensured a broad perspective. Participants represented a majority of the technology and service solutions that comprise an HR ecosystem committed to helping employers build and sustain an effective HR function.

Let’s get directly to those themes that participants felt drove the most animated provider conversations about achieving sustainable HR.

  • A question for HR providers: Which two of the following themes, from your perspective, are “true” and which one (if any) is a “lie”?

Theme #1: Productivity: the people analytics metric that matters
It was one of the HR buyer panelists, a senior HR operations leader for a large global company, who propelled this theme into the top three. He ventured the opinion that the employee experience degradation caused by the explosion of new front-end technologies, combined with integration and data reconciliation challenges faced by operations staff at the back end, could easily be contributing to the surprising workforce productivity declines in this “Fourth Industrial Revolution”: the digital age.

Ouch—plenty of accountability to go around on this one. HR providers did agree with Deloitte’s Bersin analyst that, as ecosystem participants, we sometimes deconstruct employee life cycle challenges in order to market suboptimized point solutions, leaving it to our clients to somehow weave all of the parts into a cohesive whole. Both HR buyers and providers remarked on how the current-state situation—portfolios of loosely integrated legacy cloud and on-premises platforms, increasingly sprouting a plethora of mobile apps with widely disparate user interaction models and interfaces—has led to the opposite of HR sustainability, and clearly constitutes a barrier to achieving a flexible and scalable operating model more able to adapt to business and workforce disruptions.

  • Call to Action—The providers that comprise the HR ecosystem need to work more closely together to describe desired outcomes from the employee perspective, and define user interaction and usability frameworks that allow for both the operational efficiency (integration) and creative disruption (differentiation) critical to achieving sustainable HR.

Theme #2: Go big or go home
In a theme closely related to the one of overall workforce productivity, there was much discussion about the rate-of-technology-change chart (see Figure 1) that shows that while technology is improving at an exponential pace and individuals are adapting to it quickly, organizations and the policies that govern them are not adapting fast enough. Not only does this chart help explain to providers the increasing demand for “consumer-grade” solutions, but it also suggests that the problem is bigger than HR, and that we, as HR ecosystem participants, will need to play a larger role in developing organizational strategies, as well as shaping public policies related to workforce technology, if real breakthroughs are to be achieved.

Figure 1: Rate of technology change

And this “go big or go home” message was reinforced in other ways as well: first, the notion that HR functionality eventually needs to be “built into the work,” suggesting that a true focus on the end-to-end employee experience would need to consider all processes impacting the worker, not just those that HR owns. And second, a trend away from HR-specific support and back-office operations in favor of global business services constructs that integrate all employee services into one seamless offering.

  • Call to Action—HR should stake its justifiable claim, as a function that touches every employee every day, over the emerging digital organization including the digital workforce, the digital workplace, and a reimagined digital HR.

Theme #3: HR’s future belongs to the robots
While event participants were not necessarily concerned for the near-term impact on their own careers, they clearly believed that rapid advances in automation and cognitive technologies could negatively impact the career opportunities available to their children and grandchildren. With almost daily announcements in the media about artificial intelligence (AI) advances from technology leaders, HR providers feel compelled to explore the implications for their own product roadmaps, even as they worried about the potential broader economic, social, and political implications.

Of course, for the Deloitte Human Capital leadership team, this theme is the “lie,” and we are happy to engage in a dialogue with both HR buyers and HR providers about the reasons the role of HR is likely to be enhanced by the introduction of AI in the workplace. Furthermore, there is a possibility that the persistent messaging about HR being replaced by robotics and AI only tempts business leaders to reduce investment in the HR capabilities so critical to achieving HR and organizational sustainability.

These emerging AI technologies do not represent a panacea for HR, and we want to remember the lessons learned during the HR outsourcing craze, when it was widely believed that organizations would no longer need to worry about HR capability building because the talent gaps resulting from future business and workforce disruptions would somehow be solved by the HR outsourcing provider. People may laugh at that notion today, but are in danger of falling into the same overhype trap regarding automation and cognitive technology potential if not careful.

  • Call to Action– While being careful about messaging concerning the potential of these new technologies, HR should lead the way in the application of robotic automation and AI—including leveraging natural language interfaces wherever possible—with a persistent focus on improving employee and workforce productivity, as mentioned in Theme #1.

Let’s keep the conversation going
Again this year, many of our discussions with HR providers included questions about how we can extend the HR Provider Day event platform of content and interactions into a way of working together more effectively to create value for our clients.

Clearly the key themes emerging from this year’s event, as discussed above, as well as the suggested Call to Action initiatives, will require an HR ecosystem that is operating at the next level, and we are eager to hear your suggestions and proposals about how that can be achieved.

Meanwhile, we look forward to Human Capital Technology and Service Provider Day 2018 and ask you to add your Likes, Comments, and Shares to this post.

Dave Smith is a principal with Deloitte Consulting LLP and a leader in the HR Operating Excellence practice. He helps clients develop operating models with bottom-line impact, in sync with the business at every turn.

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