HR Transformation

– how important is it to focus on the end-to-end of your HR processes?

So what do we mean by the end-to-end (e2e) of a process?  In short, it is from the point of how and who initiates it through to the delivery of the outcomes you intend.  The proposition asserted here is simply, if you own the process and the outcomes then you own the e2e of the process, even if the outcomes are delivered by others in that process.

This is as true with purely manual processes where information transfer is paper, email or spreadsheet-based, as it is for fully automated processes where integrations might play a part.

Firstly though, let’s look at HR transformation as a catalyst for change.

Drivers

The motives to transform HR processes invariably have similar objectives:

  • Improve efficiency by reducing cost and resource utilisation
  • Increase speed
  • Standardise the tools and architecture on which they are based

Or, put another way:

  • Reduce cost and resource utilisation
  • Reduce complexity and/or optimise flow
  • Reduce fragmentation

When the need to transform HR processes becomes an imperative, it is easy to forget how a fragmented and complex landscape arose in the first place.  Whether because of company growth; changes in the regulatory landscape; company mergers or just pragmatic ‘can do’ responses to fast changing business needs.  The resulting landscape may not be pretty, but it will have served the company well for some time.  Initiating real change has to be carefully thought-through and with dedicated resources on the execution.

The catalyst for change may be simple cost pressures, or be driven by a necessary major system change.  In any event, some form of budget is going to be required that captures the need to make changes to your processes. 

The re-engineering of processes will require dedicated resources focused on this for some period of time.  It is very rarely a part-time job. In my experience people do not perform well whilst serving two bosses with differing views on what is urgent and important.  Inevitably the ‘day’ job will win out over project work.  So you are going to need to add resource, either with specific expertise and/or to back-fill your current in-house expert staff.

The next challenge is what, where and how

Knowing what processes need attention is generally easy to identify. You can feel it, you can see it, either because of the number of resources supporting the process or because of the poor reliability, or consistency, of the outcomes. 

However, your business case and RoI can only be delivered by testing each use-case against your objectives – eg. speed, efficiency, reduced cost and complexity etc.  Sometimes the pay-back just isn’t there to automate or re-engineer a process.  It might just be a matter of lower-cost, offshore resources rather than investment for change.

Another motivation for change might also be poor employee experience of using existing HR processes and so I would strongly advocate that employee (or customer) experience should be added to your objectives when you are re-engineering processes.  In short, if it is a bad process to begin with, then no amount of technology or standardisation will make a bad process a better experience, even if it does reduce costs and resource utilisation.

By way of a simple example:

Take a Benefits process.  It requires the initiation by an employee, with evidence to be provided by the employee and subsequent verification by HR.  In some cases a manager approval step might need to be incorporated.

In this context, the process may currently rely on:

  • Paper forms (!) or email templates
  • A case management system or bespoke transaction manager
  • Physical proof, such as birth certificates or marriage certificates
  • An outside vendor to deliver the benefit

Whether the current process is manual or automated you will want any re-engineered process flow to be more efficient, to deliver reliable outcomes and provide a good employee and manager experience.

If you focus on the process as described you could indeed achieve this, but is this really the process in entirety?

The process is initiated outside of HR by an employee who may only do this once in their career.  So, is one of the pain-points for HR in supporting query management?  For instance, how do employees know their entitlement, the evidence that they need to provide, and the format and means of doing so? What steps do they need to follow.  Where do they find this information?  These queries will likely be emerging in the HR team before the process even initiates.  So, can this be addressed as part of the process reengineering?

Similarly, how does the vendor, or benefits administration team deliver the benefit?  Do they ask ancillary questions? Are they enabled to contact the employee direct?  These are all part of the e2e process.

Also consider,

  • Is HR asking questions of employees that they already know the answer to somewhere in their personnel records? 
  • Or is HR asking employees questions that they wouldn’t normally know the answer to, not without the help of HR (unique HR system ID is a common one). 

This can easily undermine a good process experience, appear lazy and impersonal, whilst generating more queries in the HR organisation.

So, it is in this context that an end-to-end (e2e) view of your processes is recommended, before reengineering.  Understand where your HR pain points are (and the pain-points for employees and managers) across the whole e2e process.  Ensure that the solution meets your objectives and delivers a better (or not worse) employee experience.

Applying Technology to improve HR processes

Whether you are planning a complete overhaul of your systems architecture or just looking to automate current manual or part manual processes, the same principle applies.  Look to the e2e of the processes you are addressing.

Again, by way of a simple example:

Recruiting is an area with high visibility, a changing competitive landscape and multiple processes to consider.

Common objectives are to increase the speed of getting new joiners on board whilst reducing resource utilisation and improving the candidate experience.

As a start point, it is human nature to focus on the elements of the process that you control and the pain-points in this area.  The error is to do so at the exclusion of all else.

In this particular example, the team have purchased a new ‘off the shelf’ recruitment package, one that is “guaranteed” to work well with their existing core HCM platform.  Separately, they have invested in a new candidate portal and enabled applications online for both experienced and graduate hires.  These are huge steps forward.

But what is the actual e2e process ?

 – Is position management used within the company?

 – How do managers flag a recruitment need?

 – Is there an internal job posting approach and policy?

 – Is there an internal referral process or succession management policy?

 – How are agencies and search firms engaged?

 – How are interviews tracked and governed?

 – What degree of change does the new recruitment application bring to these?

 – Is the new recruitment package capable of meeting the company’s offer letter needs – do these need to be manually tailored for country or regulatory reasons?

 – How will the successful candidate provide references and other necessary onboarding documentation?

 – How are managers kept appraised of the progress on hiring?

 – How do non-HR specific elements of the onboarding process get communicated internally and then executed?

  • ID cards
  • Building access
  • Desktop systems readiness
  • Corporate credit card delivery
  • Travel authorisations

 – How are candidates guided through the onboarding process and ‘day one’ expectations?

 – How are managers communicated with and prepared, ready for the new hire’s first minute/hour/day with the company?

 – What is the follow-up with new hires after their first week/month/3 months?

Why is it relevant?

Implementing a perceived process improvement has to be in the context of the whole e2e of that process.  The actual or perceived gains can be less than expected if the e2e process cannot adapt to the instituted changes.  It might  actually create additional manual work downstream if new system outputs need to be translated for next steps in the process or managers fail to adopt the new ways of working.

In the context of a major systems upgrade

Let’s look at the above example in the context of a wider HR transformation initiative.  The opportunity to automate current manual processes has never been more compelling and there are quite a few HCM options out there right now that can help achieve this.  Popular examples are Oracle Fusion HCM, SAP SuccessFactors, Cornerstone and Workday.  These are cloud applications that typically replace on-premise applications and it is not uncommon to see a portfolio of these systems, either adopted or retained according to their strength relative to other offerings.

Whether considering an upgrade to the whole architecture of your HR systems landscape, or just changing your portfolio of key applications, you will need to think e2e.

Why e2e?

Staying with the objectives outlined at the beginning:

  • Improve efficiency by reducing cost and resource utilisation
  • Increase speed
  • Standardise the tools and architecture on which they are based Plus
  • Improved employee/manager experience

And staying with the Recruitment example described above.  Let’s select one of these HCM systems, Workday, which is considered to have a well-developed and relatively mature recruitment module.

HCMs such as Workday are capable of delivering literally hundreds of automated processes.  Workday is also highly configurable, so there is a choice to create an entirely new process or to configure the system to replicate your current process.  Either way, the reengineering of HR and business relevant processes is a huge undertaking.

As stated earlier, it is all too common to focus on the elements of the process over which you have the most control.  However, ignoring the e2e of the process will inevitably undermine the achievement of your objectives.  For instance:

Change Management

In the example of recruiting, Workday can deliver a standardised tool and also increase efficiency, but if you are seeking to also increase speed – by reducing the number of days to recruit and by reducing the number of days to onboard a new hire – and you also want to improve the manager and new-joiner experience, you will need to consider those elements of the process outside of HR.

Eg. Will managers adapt to the changes that you have introduced or will they seek to circumvent the systemised steps?  Have you invested enough time and attention to ‘change management’ within the organisation?  If not, there is a risk that not only will speed fail to improve, but efficiency gains will also be lost.

Integrations

Meanwhile, at the other end of the recruitment process, that period when the administrative HR elements are complete and the start-date for the new joiner has been agreed.  How do non-HR specific elements of the onboarding process get communicated internally and then executed (ID cards, Building access, Desktop systems readiness etc) ?

Is it via an integration?  Did one exist previously and has now been replaced? If so, how much attention has been focused on this new integration by the owners of the process, HR?

It is not sufficient to take the reassurances of IT that this has been addressed.  Responsibility for ensuring that this integration has been thoroughly tested is with HR, working with IT. 

  • Does the integration send the same format of data to the downstream systems? 
  • Does it send only the relevant data or more than is necessary? 
  • How do changes and corrections get transmitted and received by the downstream systems? 
  • Was the previous integration a globally standard one or did it differ by country?

At least one company has suffered a ‘temporary’ glitch with this.  The impact?  New joiners could not gain access to the building on their first day.  Desktop systems were unavailable to those who eventually gained access.  Temporary access was then removed, reinstated and removed again as remediation changes were transmitted to the control systems.

All in all, not a great new-joiner experience.  In fact, reputationally damaging for HR as a whole.  Meantime the initial efficiency gains were wholly undermined by the remediation efforts required within HR.

Conclusion

In short, if you own the process outcomes then you own the e2e of the process, even if the outcomes are delivered by others in that process.

You will need to map that e2e journey from beginning to end, identifying which parts are within HR’s control and those that are initiated or delivered by others outside of HR.

Where integrations are a key element in an automated process, then IT and HR need to have a strong mutual understanding of this ownership and get help and cooperation wherever needed to ensure that the e2e of a process delivers the intended objectives.

Focusing on the e2e of a process is therefore a critical and necessary discipline in determining how successful your process re-engineering will be. 

Published by Steven Ward, Board Advisor to LogicaCloud.eu