The state of HR transformations today...and what's to come

Many HR leaders should be thanked for all of the work they did during the pandemic. Some of that work was stressful. Some was nigh onto impossible to complete given the office closings, layoffs, restructurings and more that they faced. And, some of that work was transformative.

For example, we saw numerous firms completely replace out-of-date on-premises payroll systems so that people could input time remotely and without HR assistance. We saw firms morph their business models from retail physical stores to omni-channel or online businesses. We saw HR leaders move people from in-office to remote to hybrid work environments. I think you get the drift: a lot of change, dramatic change, occurred in a very short time period. And, more change is to come.

Many of these recent changes were absolute necessities. Some were matters of corporate survival. Some were required by governments or health organizations. Some had to be implemented as there were no other alternatives. There were time pressures, financial pressures and more. Yet, HR leaders used their political capital, leadership and teams to make these successful. Now, the question is: will future transformative HR challenges be as successful?

The future of HR transformation projects

When you look at the totality of work that CHRO’s must complete these days, it’s a lengthy list that also contains some pretty tough projects/programs. I’m not convinced they can do it all unless they seriously fortify their bench.

Look at what it will take to utilize many of the new technologies that HR is going to use. To implement RPA (Robotic Process Automation), HR teams will need access to process engineers, low/no code specialists, controls experts, collaboration tools, etc. Few HR departments I see have any of this.  Or look at what it will take to close the company’s huge open position gaps. Does the HR team have the big data, Hadoop software, social engineering and recruitment marketing expertise to find, cultivate and win over jobseekers in a competitively vicious digital age?  In one shining success example, I have encountered a CHRO who implemented dozens of chatbots to improve HR productivity. But one success does not make a trend.

Future HR transformational efforts will require a CHRO to either get:

• More budget to hire more and differently skilled team members.
• To borrow personnel from other departments (e.g., IT) so that they can get access to critical skills.
• Access to specialized consultants who possess needed capabilities.

No time to do the transformation

I could continue with lots of other examples but the point is this: HR departments are staffed with people who are tasked to complete numerous transactions (e.g., employee time off requests), answer employee or management questions, and, comply with numerous federal, state and local regulatory requirements; but they have little time to do all of the above, deal with fire drills and complete transformational projects. They just don’t have the time or skills to do more.

Time is a critical component of successful transformations. The transformation team requires full-time personnel as part-time leaders and team members rarely will cut it. But, how can these employees do their full-time job (especially with all of the job vacancies, ghosting, etc. going on) and also drive a material transformation effort to completion? They can’t.

Future HR transformational efforts will require a CHRO to either get:

• Creative in freeing up personnel to work on newer HR transformational efforts.
• More automation in place in HR (e.g., RPA and chatbots) to free up headcount for projects.
• Get outsiders or consultants, on a short-time basis, to help with the needed change.

Sense of urgency

There’s another problem with HR transformations today: the sense of urgency needed for these may be flagging. Projects are completed by human beings. They get tired of jumping from one firefight to another. At some point, they’ll want a break – maybe a long one.

You can expect resistance from HR team members as to their future involvement in new HR transformation efforts. They’ve already been through numerous fire drills and transformations of late. They will lobby to slow down the pace of change or quit. Quitting is an ever-more common practice today (Ever hear of the Great Resignation?).

So, if creating a sense of urgency is needed, how must a CHRO respond? They must:

• First, recognize the change fatigue within their team and the firm overall.
• Find ways to spread out the project workload to everyone in the HR team and not just to a few.
• Create a compelling vision for each effort.
• Write a future-dated press release describing what the project team did to achieve its extraordinary outcomes and use this foresee future problems and opportunities.

But not all planned transformations will succeed

Sadly, not every great idea will get implemented. The clues as to which ones will make it may depend on a couple of factors.

• Are needed project skills (e.g., process reengineering) a competency of the HR team?
• Are the needed technical skills present and in sufficient quantities?
• Has the HR team completed complex transformations like this before?
• Does the CHRO have any political capital to spare especially after all of the transformation projects completed during the pandemic?

Attainable transformations

The transformations that will succeed are often ones where:

• The project leader has the budget, mandate and political capital to see the initiative through to the end
• There are adequate numbers of full-time people available for the project
• The team has expertise in the desired change (or can avail itself of the needed talent)

This is why a project like an HR software implementation can likely succeed as it involves familiar technology and impacts processes that the team is quite familiar with. Even if HR needs help technically with this effort, it can likely borrow some time/talent from their company’s internal IT department.

The downside to these ‘safe’ transformations is that they’ll likely be incremental efforts and not all that transformational. If it’s easy to do, it’s probably not transformation (no matter how hard you want to spin it that way).

Unattainable transformations

The transformations that may be difficult to achieve will be quite challenging. They’ll require skills and knowledge of technologies that no one on your HR team really knows or understands (e.g., algorithmic tuning or removal of bias from AI data/tools). Several of these potential transformations will require considerable ‘soft’ skills that your HR team doesn’t possess.

For example, some HR leaders believe their company’s corporate culture needs to change. Call me a skeptic but I doubt many HR groups have the skills to make this successful. This kind of project would require team members with significant expertise in social sciences, psychology, change management and more. Worse, this project may uncover dozens, hundreds or thousands of employees who possess perspectives, behaviors and attitudes that could be difficult if not impossible to change.  (This is why some DEI (Diversity, Equity, Inclusion) initiatives are hard to complete and hard for the changes to stick.) Several HR leaders claimed to have changed their corporate cultures but I find these claims hard to prove (or disprove).

(As an aside, if the end-result of your ‘transformation’ can’t be proved and measured, then you probably didn’t succeed. Culture change is often measured by before vs. after survey results. While there’s some value to that, the results can be suspicious if large numbers of employees did not undergo re-training and/or have new performance metrics applied to their bonuses, compensation, etc. It’s easy to change processes and technology but getting people to change is tough.

B.F. Skinner was a leader in behavior modification and he identified what it took to change people’s actions:

One of the main assumptions of behavior modification is that behavior is a product of learning, conditioning, other people's reactions to behavior, and the social environment. If something is a learned behavior, it can also be unlearned. The goal is to condition people differently to demonstrate more desirable and effective ways of behaving or reacting. When appropriately used, behavior modification therapy will target a particular aspect of a person's behavior to modify. Behavior modification focuses on observable behaviors and on changing undesirable or unconstructive behaviors into more constructive ones.

So, if your people-changing transformation didn’t involve real, personal change, I don’t believe your project worked. Also, if the changes don’t stick after the project leader departs the firm, then no transformation actually occurred.)

I lived through this kind of a project first-hand. I worked with an industrial psychologist on one of those efforts. While I’m pretty good at reading a room full of executives, my colleague could explain the science behind the behaviors we were seeing in action. To change that company’s culture, they would need to replace a number of bad executives, change a lot of performance metrics, and do a lot of re-education of the surviving executives. Would this company do it? Nah – it might disrupt short-term earnings!

Another issue with this kind of project is that one would need to do a lot of root cause analysis to understand what factor(s) are contributing to the current culture. Did the firm hire the wrong people? Do executive decisions (e.g., the record low pay or a prohibition on overtime) create an underwhelming work environment? Are unions a contributory factor?  Whatever the causal factors, the HR team may struggle, mightily in some cases, to make the necessary changes and make them stick.

Contrary to what one CHRO told me, changing the corporate culture is not something you announce and voilà, it’s done! In fact, that CHRO also thought that changing the color of the company’s logo is all you need to do to change the corporate culture. That’s incorrect, too.

Some of these initiatives can trigger blowback and HR teams may be ill-prepared to deal with this. The return to the office mandate that many companies want to implement is not likely to be universally loved or wanted by employees. If fact, such a decision can exacerbate the Great Resignation/Quiet Quitting phenomena hampering HR teams today. The best transformational projects are ones where team members model and anticipate these objections and develop strategies to mitigate these issues.

Some transformational efforts will go nowhere fast because management and its strident, unchanging and old-fashioned attitudes will undermine the best laid plans. This is a consequential and material point. If HR can’t marshal wide-spread support from front-line managers and top executives, its initiatives will get undone just as they are starting to get implemented. The ‘soft’ side of these initiatives requires more planning, more training, more awareness, etc. than what the HR team dealt with in other projects (e.g., implementing a new benefits administration system).

What all of this implies is that:

• Some transformational initiatives, by the nature of the skills/talents/education they require, are highly challenging and more likely to fail
• Some initiatives, while well-intentioned, will also fail if large numbers of operational and top leadership executives refuse to change their behaviors or attitudes
• Some projects just aren’t right or challenged from the get-go
• The best CHRO leaders pick projects they can actually complete and ignore others that will not end well
• Many HR transformational projects will require partnering with IT, external consultants, specialized experts, etc. The idea that the HR team can do it all is just a fantasy.

My take

HR is definitely involved in most transformational efforts today. People issues are pervasive in today’s companies and HR will be asked to sit at the table for many of these projects. Given HR’s already pressing time commitments, it’s hard to see where HR will get the time to help other parts of the company, let alone itself.

Between the change fatigue that has to be rampant in many HR organizations, I suspect big transformational projects could be really challenging for HR. It may be time for organizations to create an internal group that drives transformational efforts and allows existing organizational entities (like HR) to be able to focus on their constituents. There certainly appears to be enough needed change in businesses today that a transformation center of excellence is probably an appropriate evolution. If your firm has gone this way, drop me line and tell me all about it.