How Workday manages talent in the third age of HCM

The practice of human capital management (HCM) in the enterprise is entering its third age, believes Greg Pryor, who as VP Leadership and Organizational Effectiveness is responsible for managing talent at cloud HCM systems vendor Workday. The age of personnel came first, from the 1930s to the '70s, to be replaced by the age of HR, from the '70s to somewhere around 2010. Now HR in its turn is yielding to a new age of people enablement, introducing a "fundamentally different sensibility," he says:

This is a multi-decade journey ... I just believe we're at the early stage of a crazy, exciting time in the human capital space.

Speaking at the vendor's annual briefing with industry analysts earlier this month, Pryor outlined what he sees as the main drivers of this major shift in HCM, and gave some examples of how Workday uses its own product internally to deliver the new ethos of people engagement.

He also noted what he described as a "chasm" opening up between those organizations that are transitioning into this new sensibility, versus those that remain steeped in the more hierarchical thinking of the HR age:

I do think there is an increasing chasm between those organizations that embrace this sort of enabling enterprise — 'What would I do if my goal is to enable everyone's success?' — versus this industrial-age mindset of, 'How do I think about people as gears in a broad machine?'

I truly believe that we are now living in a network-based world, a connected economy. I'm anxious for those organizations who are not yet embracing this mentality.

And I see the chasm actually growing. Unfortunately I do see a number of human capital folks maybe later in their career who are just like, 'Let me ride out the second generation of human capital management' ... I think those folks, they won't be able to attract and retain talent.

Drivers of the third age of HCM

The new people-centric approach to HCM has three drivers, he believes:

• Democratization and decomposition of work — over the next ten years or so, the ability to connect to work opportunities will mean "moving away from work being bundled into a role."
• Context-sensitive technology — using machine learning, automation and connected computing to deliver relevant functionality to people in the flow of their work.
• The rise of optionality — younger generations, from millennials onwards, have grown up with a new attitude to their careers and life choices, one that focuses on having choices.

This notion of optionality is a big change from earlier generations, who prized independence, so that the main thing they asked from their manager was operational efficiency, such as processing their expense report quickly. Younger generations expect regular feedback and look for frequent opportunities to learn new capabilities. This has been shaped by their experience of living through the shock of the great recession, Pryor explains, which has left them keen to equip themselves to survive future political, economic or social uncertainty:

They watched their colleagues during the great recession get slowly picked off. And the narrative they told themselves, was that the people that had the least optionality — that had the least capability to flex in a more agile world — got picked off earlier. And so there is this narrative of, 'Do I have the breadth of capability to navigate this?'

One response to this mindset under development at Workday is called the 'agile' career, which applies agile development methodology to careers, such as working in 'sprints' to develop capabilities, with frequent reflectives to review progress with people leaders. Another approach is to encourage 18- to 24-month tours in another function to broaden experiences, rather than pursuing more traditional career paths.

There's even the potential to create an internal 'gig economy' that reflects the more "liquid employment types" that are becoming prevalent, he adds:

HR has been so fixated on an employee type and the reality is we work in networks ... that's why I actually think not even calling it HR, thinking about this idea of, how do I look at performance enablement or people enablement within the network of the workforce that I actually work for?

Pryor's team is also using machine automation to work smarter at Workday: "I personally like to use the phrase augmented intelligence instead of artificial intelligence," he says. For example, a colleague has set up the Workday campaigns function to automatically remind workmates when it's time to update their succession plan.

How Workday is changing talent management

Pryor concluded with three examples of how Workday uses its own technology to further its transition into the third age of HCM.

The first is the career opportunity graph, which uses continuous analysis of career movements within the company to show an employee what their next move might be — for example, "32% of people in your current role make this move next." It also maps the individual's skills to those required in the new role, showing which need development. Half of Workday's employees consult the opportunity graph once a month, says Pryor.

I'm not sure whether they're just interested in the vitality of opportunities at Workday or whether they're really looking for new roles. But I'll tell you, I prefer for them to be looking at the opportunity at Workday as opposed to being on LinkedIn.

The second example is a recent addition to the routine at Workday called Feedback Friday. Every Friday, employees are asked to respond to two simple questions giving feedback about their managers. The answers are evaluated using benchmark data from The Great Place to Work Institute, the organization that compiles the Fortune Best Companies to Work For rankings. The system then automatically selects curated learning content for each individual manager based on their team's responses.

The survey results also identify which managers are providing the best experiences for their employees, based on the Institute's benchmarks. The top performers — "163 of our people leaders at Workday whose results from their team would be equal to the top 10% of the 100 best companies in the world," says Pryor — have been recognized in an annual people leadership summit.

Since introducing Feedback Fridays, Workday has leapt up the Best Companies to Work For rankings, says Pryor:

I can't say that there's a statistical correlation to this, but since we have begun doing this and a variety of other things for our people leaders, we had an 11-point jump in the Fortune best places to work. No company has ever made an 11-point jump in that survey.

I do believe it's because our people feel like they're being listened to and our people leaders are aspiring to continue to level up.

From talent management to enablement

The final example extends that level-up program, which allows any people leader at Workday to know at what level they are helping create an employee experience for their people. The company is now using its campaigns technology to automatically prompt managers with context-sensitive information, pointing them to curated content that can help them further improve their performance. Pryor explains:

Imagine if I get a notification from work to say, 'Congratulations, your efforts have helped you level up your employee experience and we have some ongoing coaching that we'd like to provide to help you be successful.'

This switches the emphasis of talent management within Workday from management to enablement, he says:

We're experimenting and ideating with the experience that you will have with technology that enables your success.

So not around regulation, not around compliance, but what if we were to turn the lens from performance management to performance enablement?

Whether we approach this from a design thinking perspective, it's, 'How would you use this amazing tool set that I have been privileged to leverage which is Workday to actually enable everyone's performance?' I will tell you, for me, it's allowed me to unleash our programs to really enable, automate and then to elevate the work that our practitioners are doing in a very material way.

My take

Some call this eating your own dogfood, others call it drinking your own champagne. Whatever you call it, Workday is clearly doing a lot of it, and its learnings will be followed with interest by HCM practitioners everywhere.