HR’s Role in Leading Digitalization

Q&A with Gartner’s Brian Kropp

Excerpt from “The Future of HR,” a Raconteur Special Report in The Times of London

This is an excerpt — download the full report here. 
 

Q. Where do you see the biggest challenge for heads of HR?

A. The challenge is coming from digitalization. That’s true for all roles in today’s organization. In a recent survey, two-thirds of business leaders told us that if their company does not digitalize more by 2020, it will no longer be competitive. But in HR, digitalization is changing everything, from core functions like the way we hire and develop talent, to introducing new burdens such as raising performance. We found that 88% of chief HR officers say they need to invest in three or more technologies over the next two years. It’s a huge undertaking and it’s no surprise many executives feel completely lost.

Q. How is the way we hire changing and what is the cost of getting it wrong?

A. Let’s start with the applicants. In theory, this is a golden age for applicants. Unemployment is at a record low, around 4% in the U.K. and United States, and candidates are overwhelmed with opportunities. But dig a little deeper and the picture is more complex. Candidates struggle to identify which jobs to apply for. They are overwhelmed with options. When they research positions online, they trawl through unfocused information. Digital forms make it easy for huge numbers to apply, so candidates wait longer to hear back from employers. The result is low engagement and regret on both sides. One-third of new hires regret their decision, up by half in 10 years. This is painful for HR departments, as the cost of hiring is up 18% in two years.


Q.  How can investing in technology improve hiring?

A. When you understand the causes of the problem, you can build targeted solutions. Since candidates are overwhelmed with information, some pertinent and some not, address this first. Offer clear information online about the role and the company, including the good, the bad and the ugly. That will filter out unsuitable and uncommitted candidates. Change your interview process to identify those most committed. Hotel chain Hilton automated its screening process to find passive signals of candidate interest. These are things the candidates are unaware of. At the heart of the process is an algorithm Hilton’s HR team built to identify top candidates, based on gathering data from high-performing employees. They can filter applicants at the front end and focus on the best ones. When you supply focused information, and intelligently guide candidates via digital techniques such as this, the number of regretted decisions decreases by 75%. That’s a terrific improvement.


Q. What impact can technology have on employee retention rates?

A. Technology can intervene to improve the way employees work. In fact, we know from earnings call transcripts that chief executives now expect HR to actively find ways of making employees happier. Currently only 29% of employees believe HR helps them perform better. Clearly there’s a lot to do. Leading organizations are tackling this by using digital monitoring to identify how employees are feeling. Internal chat platforms such as Jabber, Yammer and Chatter are a goldmine. Scan these conversations to find out if IT is too slow to respond to queries or if there is frustration with a certain process. Then HR can fix it. So long as there is transparency over the policy, digital monitoring, or listening, is a great way to improve employee productivity and satisfaction, driving up retention.


Q. Do some HR professionals feel digitalization is outside their remit?

A. There is a reluctance to modernize. That’s natural as changing is hard, but there’s no alternative. Traditional HR methods are failing. Until recently, nine out of 10 organizations used annual employee surveys to monitor opinions. These surveys are expensive and slow, and the information is often collected months after an issue was live. Why not experiment with cutting-edge solutions? Data-scraping can provide rich insights into employee behavior. Employee location data can tell you where people are moving around the office and how office space can be optimized. Other more disruptive technologies, such as the use of facial monitoring, have potential; imagine a computer that tracks your emotions or a desk that understands your physiological markers and advises you to take a break when your temperature is rising. “Nudging” technologies like this can actually make us healthier. I’ve even seen two companies microchip employees.

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    There is a reluctance to modernize. That’s natural as changing is hard, but there’s no alternative. Traditional HR methods are failing. Until recently, nine out of 10 organizations used annual employee surveys to monitor opinions.

    Brian Kropp

    Group Vice President, Gartner Research & Advisory