In his keynote address at the opening of Gartner’s ReimagineHR conference in Orlando, Florida on Sunday, Gartner Group Vice President Brian Kropp shared a very salient figure with the hundreds of HR executives gathered in the room: 67 percent of CEOs tell us that if their organization does not make significant upgrades to its digital capabilities by 2020, it will no longer be competitive. “And if you work for one of the 33 percent,” Kropp told the attendees, “start polishing your résumés,” because those two-thirds of CEOs are probably right.
Digitalization is one of the most pressing challenges facing businesses today, and it’s not hard to see why. When CEOs talk about digitalization—in meetings, in employee communications, and increasingly on calls with investors—they frame it as a means of driving increased efficiency, productivity, and growth, the better to compete in a fast-paced and constantly changing business environment. However, Gartner research has shown that over the past five years, employees are exhibiting dwindling rates of discretionary effort: Just at the moment when organizations need to get the best out of their people, fewer of them are going above and beyond the call of duty. Meanwhile, labor markets in the US, Europe, and around the world are historically tight, so organizations have to work harder to find the right people and hold on to the valuable talent they already have.
As a result of these trends, HR leaders today find themselves in a situation where the CEO is demanding improved performance from employees, while employees are demanding an easier and more seamless experience at work that matches the app-driven, on-demand experience they are increasingly used to in their personal lives. Digital solutions are needed to meet these demands, but those solutions involve much more than merely adopting new technology; fundamental aspects of the way the organization works need to be rethought and redesigned for a digital world. HR has an enormously valuable role to play in ensuring a successful transition into the digital enterprise, but it’s not always obvious how to achieve that goal, and many organizations have been going about it the wrong way.
“What does digitalization mean to you?” Prompted with this question in a poll, Sunday’s audience responded with words like “efficiency,” “easy,” “seamless,” “simplicity,” and “experience.” These answers reflect HR’s unique mission today of driving business outcomes while (or better yet, by) improving the employee experience. Here are five of the key challenges posed by this new environment, and what—in brief—HR can do to tackle them:
Digitalization has changed the candidate journey
The problem: Online hiring platforms have made it easier than ever for candidates to apply to jobs. Whereas candidates used to research companies and target a set of prospective employers they were really interested in working for, today’s casual digital candidates fire off an application first, then ask questions later. Organizations need to change the way they recruit to make sure they are attracting and hiring the right people.
The solution: HR needs to change the focus of recruiting from courting candidates to driving candidate decisions, first identifying the strongest, most committed candidates, and then motivating them to follow through on their applications.
Organizations need better insight into their people
The problem: In the pre-digital world, the engagement survey was the gold standard for measuring employees’ attitudes and behaviors at work, but over the past few years, we’ve seen more organizations abandon these surveys and adopt new, more experimental digital methods for measuring what their employees think and do in real time. With new sources of data and methods of collection emerging every year, employers have more options to gain these insights, but some of these options could violate employees’ privacy and trust if used improperly.
The solution: HR leaders can no longer rely solely on asking employees for feedback; instead, they must start listening to what their employees are already saying.
Work is becoming more interconnected
The problem: More and more of the work that gets done in our organizations now spans multiple functions instead of being siloed in a specific department. Rather than traveling vertically up and down the chain of command, our decision-making processes are increasingly horizontal. Managers used to operating in a traditional command structure, however, often don’t know how to manage in this more distributed work environment.
The solution: To maximize the effectiveness of cross-functional management, HR has to focus on developing connector managers, who can steer their direct reports toward answers and support throughout the organization, rather than always-on managers who attempt to solve every employee problem themselves.
Self-service technology isn’t delivering the desired results
The problem: The vast majority of organizations expect to invest in new technologies in the coming two years, and with thin technology budgets, HR functions are under pressure to maximize the benefit of every new technological solution. The trend in recent years has been to adopt self-service solutions that allow employees to access information and tools anytime and anywhere they want. These self-service technologies, however, have left employees feeling more overwhelmed than empowered.
The solution: Start focusing on user experience instead of self-service. Technology that delivers an effortless experience for employees and managers has a greater positive impact on performance than technology that offers on-demand access.
Performance management needs to get faster
The problem: Every CEO—literally 100 percent of those we surveyed—wants HR to improve the performance management process. HR has been working on just that task for years now and a vast majority of organizations are still making changes. These efforts usually focus on improvements like simplifying forms or increasing the frequency of feedback, but the fundamental challenge remains that our performance management systems are not fast enough to match the accelerating pace of business today.
The solution: The evolution of performance management needs to go beyond the way we evaluate our employees’ work and also encompass the way we set goals for them. A more dynamic goal-setting process may be the missing link in addressing this essential challenge for the digital enterprise.
Clients of the Gartner for HR Leaders program can read more about Digitalizing HR to Improve the Employee Experience here and Gartner Corporate Leadership Council members can read about that here.