The digital era that HR missed

SUMMARY:

HR has a tough road to tread if it is to be relevant in the 21st century. Industrial age technology won’t cut it anymore.

Didn't see itEvery year, I go to HR Tech to see what’s changing in the world of human resources. Like at previous events, I spoke with a number of vendors, walked the expo hall and chatted with current/former clients and integrators.  While I noted a number of vendor specific news items, I also picked up on four big trend items. The first is the digital era that HR didn’t see coming.

As an industry, HR technology vendors have been exceptionally aggressive in implementing cloud technologies and by many estimates are a 5-10 years ahead of many ERP vendors in their knowledge and utilization of cloud software. That said, while their technology chops are outstanding, their ability to see the consequences of the end of the Industrial Age and the beginning of the Digital Age, are almost comical.

Businesses everywhere are moving beyond cloud/mobile/social and are creating sensor enabled, Internet of things (IoT) driven products – They’ve gone Digital!  Jeff Immelt, CEO of General Electric, recently told the consulting firm McKinsey

…that the path to the Digital Age was not simply a matter of adding sensors to existing products. GE also needed to hire data scientists and the like to analyze the vast amounts of data their devices were creating. He spoke how a single sensor enabled jet engine on “one flight between New York City and Chicago produces a terabyte of data.

Where would GE get the volume of people needed to analyze the incredible amounts of data that these devices generate? And, where would GE get the new salespeople, marketing personnel, etc. that are needed for a services oriented digital firm?

It turns out that digital age firms might find some of the technology on display at HR Tech a bit lacking. Turns out that one vendor admitted they have no salary data for data scientists. The job is so new that they just don’t have many data points on it, nor are employers consistently labeling a position as “data scientist”. This executive also indicated that of the little salary information they have seen, the numbers are all over the map.

HR products, like their Financial and ERP cousins, were not really designed for the Digital Age and certainly not for the data volumes that go with it. GE’s turbine engines aren’t the only things generating or utilizing large/big data. There are some fringe application solutions in HR that were designed with big data in mind. These technologies utilize in-memory database technology, Hadoop and other products to handle the massive data stores.

But customers, not vendors, are the real innovators here with many retailers bolting on big data capabilities to old-school HR products. One of the most common big data applications and HR involves retail store scheduling. Retailers commonly use weather forecast data and marry that against their predicted store sales forecast data and HR manpower availability data to populate almost real-time estimates of staffing needs. Is this solution a common capability in off-the-shelf HR products? No, it’s quite uncommon.

Likewise, HR vendors that offer T&E (travel and entertainment) reimbursement functionality are rarely in the big data/digital world either. Are these providers adding big data functionality like that found in Oversight Systems’  software to identify potential fraudulent reimbursement requests? No. Only one HR vendor I met with seemed to have any interest in this area.

What emerged was a realization that many of the HR technologies that are being sold and used today were designed for the Industrial Age not the Digital Age. HR technologies may need a spectrum of enhancements to be relevant for the digital era. Some may simply need additions to their performance management system’s competency and capability maps. Some may need enhanced salary data. But others may face changes we have yet to imagine.