New software and new employee expectations unleash new ways of working.
By Russ Banham
Tim Mulligan joined Vulcan as its chief human resources officer in 2017 with a mandate from CEO Bill Hilf to overhaul the company’s performance management system. Mulligan’s task was to make the employee performance review process transparent, objective and motivational at Seattle-based Vulcan, a private company founded by the late Microsoft cofounder, Paul Allen, to oversee his family’s businesses and philanthropic activities. “In a city as tech-focused and competitive as Seattle, we needed to deliver a new system that was cutting edge and sophisticated, and not what other companies were delivering,” Mulligan says.
To entice the best and brightest people to hire on at Vulcan, Mulligan turned to Saba, a provider of talent management software. Today, employees across Vulcan’s wide-ranging enterprises—real estate development, venture capital, filmmaking, philanthropy, the Seattle Seahawks professional football team and a handful of museums on pop culture, computing and flight—leverage the Saba tool to review feedback on their work performance.
These informal comments may surface deficiencies in specific skills, which employees can strengthen through Vulcan’s continuous learning initiatives. “By making performance information transparent, employees understand management decisions around compensation and promotions,” says Mulligan. “These insights motivate them to sharpen their skills and move their careers and our mission forward.”
Motivating employees to seize strategic business growth is a story as old as business itself. How it’s being attained today is startlingly new. Long before the current coronavirus crisis, companies were jettisoning yesteryear’s command-and-control talent management structure in favor of project teams with the autonomy to speak truth to power and make decisions. That’s likely to accelerate now, with a growing arsenal of cognitive computing and digital technology tools to collaborate, making work more efficient, flexible, remote and fun.
Other evolving technologies in use at more sophisticated employers include recruitment and onboarding solutions that automate these processes while conveying the organization’s unique brand and culture, and an array of survey tools using AI and predictive analytics to discern specific reasons for employee disengagement from their work and how to resolve these issues.
Today’s new work structures and ways of work are predicated on fulfilling the work expectations of millennials and Gen Z employees. In many organizations, they are the price of entry to attract these digital natives’ skill sets.
Watco Companies has such a workforce. The largest privately owned shortline railroad in the country has reengineered work around project teams of employees motivated to provide exceptional customer service. “Our culture is centered on people,” says Dan Smith, Watco’s CEO. “A manager’s sole job is to set up our team members to succeed. Consequently, our processes, policies and systems have to be designed for their success.”
Helping generate this success is a talent management solution provided by SAP SuccessFactors that runs the gamut from recruiting and onboarding through performance development. “We needed a solution that would not only support our team members in their day-to-day work but would also help their overall professional development,” Smith says. “With the solution, a team member can apply for a job, complete the necessary employment paperwork, complete the performance review, set goals, take online learning courses, register for instructor-led courses, review their pay stubs, and more.”
At Los Angeles-based BlackLine, job tasks are also often self-directed. Once hired, employees have the opportunity to manage their career progression, joining diverse project teams on an as-needed and as-desired basis.
“Twenty percent of the workforce in one role a year ago are in a new role today,” says Therese Tucker, CEO and founder of the global provider of financial and accounting software automation solutions. “We encourage people to seek opportunities beyond their current roles to broaden their skill sets. And we make it easy and organic to do that.”
Most employees rotate from one project team to another, absorbing different skills along the way. BlackLine also offers short-term international work to further employee talent development assignments in the nearly dozen countries in which it has offices.
Most importantly, Tucker says the company instills the purpose-driven nature of the company’s products, which are predicated on making the work of accountants less burdensome and more fulfilling, in its workforce. “Our technology solutions have an impact on the lives of others, which connects strongly with the purpose-driven nature of many young people,” Tucker says.
This high-tech and empathy-driven way of providing work is here to stay, says Deborah Ancona, founder of the MIT Leadership Center and a professor of organization studies at MIT’s Sloan School of Management. More than a dozen years ago, Ancona and her colleagues predicted that mobile technology would disrupt the autocratic and highly bureaucratic business management model that had prevailed since the end of World War II. Just in time, too. “The world and business environment were changing so fast that we realized even the best CEO could not possibly stay on top of everything,” she says. “Leadership needed to be pushed down into the lowest ranks of the organization, to the people closest to what was really going on.”
To achieve that aim, many companies ditch the hierarchical form of management that predominated in the 20th century.
They move to nimbler, network-distributed learning models, where the traditional management pyramid has been inverted, Ancona says. “Managers now realize they need to engage and motivate the bottom parts of the organization to lead upwards with their ideas and innovations, and the way to pull people together is to articulate what you do that is truly meaningful.”
Assuming this is the case, employees will find true merit in the work they perform for the business—just the message that today’s younger generation of workers want to hear. “Young people come out of educational institutions where they enjoy face-to-face collaborations on teams, purposeful and engaging assignments, and learning opportunities to fill perceived skills gaps,” Ancona adds. “They have the option in many cases to skip an early morning class and take it online in the evening.”
Students bring these expectations into the workplace. “You can’t hire young people, stick them in front of a computer for eight hours a day, fail to give them the technology tools they’ve come to rely on and then expect them to be motivated and productive,” she says.
This new work model requires investments in talent-focused technologies. Such software solutions have expanded from the original HR information systems introduced in the early 1990s to process payroll, employee benefits calculations and expense reporting and reimbursements. HR systems now manage recruitment and talent performance.
In this journey, HR itself has evolved into a key strategic resource overseeing the employment brand and culture to recruit and retain desired skill sets and training in the development of data analytics and cognitive computing solutions like AI, chatbots, RPA (robotic process automation), machine learning, natural language processing and predictive analytics.
This progression alters the ways companies calculate the return on investment in HR solutions. “Back when these were a bunch of tools automating manual HR practices, ROI was calculated in the amount of paper and labor that was reduced,” says Josh Bersin, a longtime HR industry analyst, previous CEO and founder of Bersin by Deloitte, and currently CEO and dean of the Bersin Academy. “Today, driven by the benefits of running the business through a network of data-oriented project teams, the ROI is hinged to how the tool helps you assemble teams, create goals for them, determine who on the team is succeeding or not, which person should lead the team and who needs to go to another team.” No longer are providers just building software for HR; they’re building the tools for people.
Longtime HRIS providers like 30-year-old Ultimate Software gradually evolved to assist these revolutionary developments. Says Cecile Alper-Leroux, Ultimate Software’s vice president of human capital management innovations: “We’ve always been focused on people, initially making the work of employees less manual, time-consuming and burdensome. We still do that, but we’re increasingly involved in developing and providing technology solutions that make work more productive, collaborative and engaging. If you take care of your people first, they will then take care of your customers.”
One solution is UltiPro Perception, an engagement survey tool that brings together a portfolio of AI technologies to unearth how employees actually feel about their work. Survey questions are based on occupational psychology principles, an applied discipline within psychology focused on human behaviors related to work. Using natural language processing and machine learning, the tool analyzes the survey data to understand each employee’s motivations, interests and concerns.
“You’re able to gauge how people really feel about a project or their workload, the kinds of things that they otherwise might not reveal,” Alper-Leroux says. “Once understood, the employer can take corrective actions, ranging from learning opportunities to career-planning conversations and other direct manager suggestions.”
Other providers of talent management solutions also seek to align corporate strategy and culture with employee work needs and expectations. “Our focus is to create a new approach to work experiences, driven by the goals of the company and the needs of the individual,” says Karen Williams, executive vice president, products & customer success at Saba, Vulcan’s performance management provider. “We learn as much as we can about the employee to deliver very personal work experiences.”
Like Ultimate Software, Saba uses sophisticated algorithms and AI to analyze workforce talent to divine ways to make work more engaging, while offering employees learning and career development opportunities aligned with business strategies. This dual purpose resonated with Mulligan, who implemented Saba’s TalentSpace solution at Vulcan in 2017. “Nurturing the development of high-performance employees is fundamental to fulfilling the vision of the company,” he says. “We now have a culture of continuous performance feedback.”
Transparency into the performance review process motivates employees to seize learning opportunities that ultimately result in higher compensation and rising career prospects, while helping Vulcan achieve its vision and mission. This year, Vulcan will roll out a new pay-for-performance system that ties compensation entirely to a new mathematical equation that also is transparent. “Our people now know where they stand and how their work impacts our success,” Mulligan says.
HIGH-TOUCH RECRUITMENT TO WIN THE TALENT WAR
Vulcan is far from alone in leveraging technology to make work more productive. Booster Box, a three-year-old Tuscany, Italy-based global digital marketing firm, wanted to scale its business geographically. To do that, Booster Box needed to recruit topnotch data scientists and software developers possessing the same skill sets being sought by giant tech companies like Google, where Gianluca Binelli, Booster Box founder and CEO, previously headed up EMEA online marketing. “We’re aiming for the same talent and needed a way to stand out,” he says.
The tool needed to attract great people at less effort and cost, too. “We process thousands of CVs on a monthly basis to fill the roles we need,” Binelli says. “I wanted a way to automate and simplify the task, while giving every job applicant a superior experience.”
Talent software provider Breezy HR offered a solution. The company created what Binelli calls a “captivating career page” that presents available jobs and related compensation, benefits and career progression opportunities, as well as employee workplace reviews. “The app is mobile optimized, meaning job applicants can download the employment application, upload their resumes and ask questions to a chatbot,” says Nina Cofer, product marketing manager.
If Booster Box is interested in interviewing a job applicant, an email is automatically sent out with a selection of days and times in a Google or Microsoft Outlook calendar invite. Each step of the hiring process is automated, reducing traditional back-and-forth recruitment activities that often result in weeks of waiting for candidates, who might move on to look elsewhere in the meantime.
For a growing company dependent on talent, the human touch, represented by the ease and speed of service, is essential, says Cofer. “Hiring decisions can be made in real time because the analytics driving the process are customized to each client’s specific talent needs, beginning with the creation of the perfect job description… [and] the solution also suggests to candidates that the company cares about providing efficient and engaging work experiences.”
EYEING THE LANDSCAPE
Like any new paradigm, today’s shifting model of work and the technologies being deployed to enable it are apt to change. A case in point is remote work by employees, something in which every worker has now taken a crash course. While younger generations insist upon the freedom to perform tasks where they want and when, the collaborative nature of project teams requires a reasonable amount of face-to-face input at the office. Consequently, the pendulum is swinging back toward clocking in at least part of the day.
Technologies assisting recruitment through performance talent management also are expected to evolve along the lines that Bersin mentioned—toward greater utility by people to do their work more efficiently, collaboratively and successfully. More providers will crowd the already crowded HR solutions market, he adds. “VC firms are throwing money at any startup with a new take on how to enhance the work of project teams, particularly those developing at midsize companies with 500 to 1,000 employees,” he says, noting that when “the economy flattens there will be a huge shakeup.”
In many ways, the new work paradigms and advancements in people-oriented HR technologies put employees in an extraordinary position of decision-making power, despite dystopian reports of robots replacing people. As Ancona puts it, “Empowering employees with the autonomy to choose work they want to do and providing them with learning opportunities and technology tools to do this work efficiently and effectively results in more engaged people and a more productive workforce.”
Talent is important but how you treat people is everything.
WHAT TO BUY: Finding software that conforms to work expectations
Investment dollars are flowing into the HR technology space at the same time that revolutionary innovations in work paradigms are hyper-accelerating, making the decision of which HR software to purchase from which provider a daunting task.
To strike a delicate balance between need and cost, Franz Gilbert, vice president and HR solutions provider at Big Four firm Deloitte, suggests beginning with a determination of what the organization is looking to achieve through its HR technology strategy. “Think about the problem to be solved first and then how the HR solution fits into your overall plans and budget,” says Gilbert.
In some cases, a company’s existing HR vendors may have new talent management and collaborative work technology tools that address the problem to be solved at a reduced cost than buying it elsewhere. Nevertheless, for comparative purposes, the product features and functions of other vendors must be vetted before making a decision.
“A new HR platform can generate new perspectives for how HR processes can be accomplished,” Gilbert says. “Given the wide range of HR providers out there, it makes sense to assess the company’s experience working with current HR providers versus startups and larger companies.”
In evaluating both camps, beware of buying shiny new HR software and sticking with older HR processes, which “negates the proposed benefits [of the new solution],” Gilbert says. “Instead, take the opportunity to optimize processes using the new features and functions.”
Since HR systems affect how work is to be performed, workforce adoption is crucial to achieving the desired end state. To mitigate the potential fallout produced by a new system, Gilbert advises that HR invest in a change management discipline that addresses the people side of the software implementation. “This is a critical step toward achieving both widescale adoption and a successful software deployment,” he says.
Josh Bersin, founder of Bersin by Deloitte and currently dean of the Bersin Academy, agrees that any HR technology decision must be driven by the use of the tools by the workforce. “The number one criterion in selecting the right HR software from the right provider is pretty simple: do your employees like using it,” he says. “My advice to CEOs is to direct the chief human resources officer to insist to the provider on a pilot project. The provider would agree to offering workshops where employees use the tool for a month or two to see if it makes work more efficient and productive. If that’s not the case, it’s not the right solution.”
Russ Banham is a Pulitzer-nominated financial journalist and best-selling author.