“To win in the marketplace, you must first win in the workplace.” This bit of wisdom comes from Doug Conant, former president and CEO of the Campbell Soup Company. Never has this statement been truer. As Mr. Conant suggests, success in the market is directly tied to the success of the company’s employees and the associated people strategy.
Corporate leaders look to HR to attract, motivate, engage, manage and retain employees. And, as with most organizational functions today, there’s technology to support that. Gallagher’s 2020 HR Technology Pulse Survey found that 69% of employers expect to expand or replace their HR technology by 2022 (up 7 points from 2019) and that 57% of HR leaders believe investing in HR technology helps drive organizational wellbeing.
Despite the relatively high level of investment in HR technology, funding support can be hard-won for some HR leaders — for a variety of reasons. The same survey found that only 23% find it easy to convince their organization’s top decision makers of the necessity of HR technology investment. In contrast, 38% find it difficult to get buy-in, with “leadership doesn’t understand the value of the investment” as the top-cited reason. Overcome this objection by tying the business case to the organization’s people strategy.
Tie your business case to your people strategy
As with any funding request, a strong business case is needed. To get buy-in for investment in new or updated HR technology, the key to a successful business case is to tie the ask directly to the organization’s people strategy. Doing so should get the attention of senior decision makers by offering a solution that addresses the issues that keep many CEOs up at night: talent attraction and retention. The following are two examples of a people strategy objective and how HR technology can support the objective.
Strategy: To offer competitive compensation
HR Technology Solution: Compensation software
Compensation software brings together various compensation survey data (filtered by industry, company size, location, etc.) and allows you to compare it to your employee population to determine if they are above, below or at market rates. It identifies “outliers” — individuals who are significantly under or overpaid. It also enables an employer to set a threshold for compensation, e.g., employees should earn no less than 70% of the mid-point of a job grade (to minimize their susceptibility to other offers), and then calculates the associated cost to bring everyone up to this threshold.
Of course, there is more to attracting and retaining employees than money…employee benefits, professional development opportunities, work-life balance, to name of few. There is technology to support each of these areas and more, but that’s a topic for another time.
Compensation software can also check for gender pay equity (an especially timely topic) and, in theory, for any discriminatory pay practices, e.g., age or race. Due to the Equal Employment Opportunity Commission (EEOC) regulations, employers may lack the required data to determine such instances of pay inequity. However, if you think you have a problem (or have received complaints), compensation software may be the solution needed to identify and address an issue before losing good talent to a competitor (or being sued).
Strategy: Ensure technology meets employee expectations
HR Technology Solution: Optimization of cloud-based tools
Workplace technology — even in the most advanced companies — may fall short of the smartphones most of us carry in our pockets. The result is that employees can become frustrated with the technology provided to navigate day-to-day activities, e.g., choosing benefits, timekeeping, locating information needed to complete a task, etc. For at least the near-term, most top decision makers will be baby boomers or older, who came of professional age before the Internet, the Cloud and other modern smart technologies. Consequently, they may be less inclined to view these as critical to workforce productivity, employee satisfaction and, ultimately, talent attraction and retention. A 2019 Gallagher survey found that 50% of employers consider “meeting employee expectations and requirements” important. Related, a 2018 survey by PwC found that 90% of employers said their company pays attention to people’s needs when introducing new technology, whereas only 53% of staff said the same. Beyond simply investing in modern technology, employers need a formal plan for governing the relationship with their tech provider and to dedicate a limited amount of resources to ensure someone is paying attention to the improvements made in new releases and identifying opportunities to leverage new tools.
Addressing the ROI question
Finally, with any business case, decision makers look for the ROI — return on investment. Depending on the technology, this can be a hard or easy case to make. Automation and compliance technology deliver a solid case for hard cost ROI (savings from reduced and/or more productive personnel and avoidance of expensive fines and penalties).
The ROI for technology related to a people strategy may be more difficult as much of its value is in soft returns, e.g., increased employee engagement and satisfaction, improved decision making and customer satisfaction. It’s a worthy goal to measure the soft ROI but be mindful of the associated challenges. While hard metrics are ideal, alternative approaches, such as a case study, may be a better fit.
Make a clear and direct link to organizational wellbeing
HR leaders can overcome the technology buy-in barrier by developing a comprehensive HR technology strategy that closely aligns proposed investments with the organization’s strategic priorities, which in today’s world, is almost always related to maintaining a productive workforce. Linking spending clearly and directly to improved organizational wellbeing helps to make a compelling case for a people strategy that will deliver on productivity and core talent management goals.
If your team wants help making a business case to leadership for new investment in HR technology, Gallagher can help. Contact us today to learn more about our services for all group sizes and budgets.
