Making a business case for any kind of human resources process change starts with a discussion on how the change can make the company more profitable–though identifying the improved outcomes that lead to potential profit isn’t always an easy task. Furthermore, change naysayers may be mired in the mindset of “this is how things are done around here.”
In my experience, inertia is the most formidable obstacle to adopting new HR technology. It manifests itself in many ways, and in this blog I’ll share how comments ExactHire recently collected during software research calls substantiate inertia’s insidiousness. Additionally, we’ll discuss potential responses to act on that inertia in such a way that change is possible and more profit is realized for the organization.
Particularly in the case of a full human resources information system (HRIS), the cost of HR technology can quickly increase as modules for many aspects of HR are adopted by employers. While cost is a common objection that derails well-intended HR departments from exploring the latest technology options, in ExactHire’s 2018 Tech-Based Employee Experience Survey, a notable 40% of respondents indicated that their budget for HR technology spending had increased over the past year. Additionally, 48% of respondents had the same budget in 2018 as the previous year. Consequently, at least the majority of respondents aren’t experiencing contracting financial resources in their quest to find affordable HR technology.
88% of respondents maintained or increased their HR technology budget in the past year.
Nevertheless, cost is often the first red flag management throws when the topic of new technology is broached. Here are some of the stumbling blocks we uncovered in our research calls:
- “We have been using our existing HRIS for 7 years now. I have shopped other systems, but management won’t agree to move away from our current application because they feel we haven’t gotten our money’s worth yet.” – Director of Human Resources, non-profit industry
- “Our applicant tracking system was here when I arrived and there’s not a strong desire to move to anything else within our budget. As far as onboarding goes, spreadsheets and email are not ideal, but our lower volume of hiring makes it doable.” – Director of Talent Acquisition, software industry
Get at the heart of others’ concerns about cost. For example, there should be a difference in approach if others feel you’re already overspending for current software compared to if they are content with an existing software application and not in enough “pain” to make a change that may cost more.
Armed with an understanding of others’ motivations for objecting to change, consider how your organization’s future growth plans should impact any changes you make today. Ideally, the technology you use should be capable of meeting your needs for tomorrow, too. However, the optimal scenario exists when you can scale a platform to meet those needs over time without overpaying for features you don’t need prematurely.
Do you need all the bells and whistles now? If not, is it easy to add them later? Making a case for change is easier if you plan to implement functionality over time so you aren’t drinking from the fire hose–or paying through the nose.
And while financial “hard costs” (e.g. software implementation charges, monthly access fees, etc.) are the most apparent expenses associated with technology change, motivate management to consider new technology by focusing on the opportunity cost of not making a change and its potential long-term impact, too.
Scarcity of Time and Staff Bandwidth
In the same way that scarcity of time can be an advantage in an opportunity cost discussion, it can also perpetuate inertia. For many employers, allocating the staff resources necessary to explore and implement a new software platform is usually a bigger obstacle than an increase in access fees. A significant barrier to coaxing employers away from HRIS platforms they don’t like that much is time…the time associated with the implementation process and the training that stakeholders must undergo to use a new system effectively.
And even when an HR application isn’t liked that much, inertia may still be victorious as prospects implement additional native modules (e.g. recruiting, performance management, learning management, etc.) just because they are already part of the existing system–even if the system is poorly suited to the employer’s overall needs.
- “I don’t know if we are going to stay with our existing software vendor…the more we tap into its various modules, the harder it is to pull away from it; meanwhile, the service is poor.” – HR Generalist, retail industry
- “I actually had another vendor come in and give us a sales pitch…but the others in the room were reluctant to consider an alternative to our existing software at this time because the idea of a three- to four-month implementation process is daunting.” – Human Resources, physician group industry
- “We handle recruiting manually with spreadsheets and do posting to third party job boards ourselves. We have applicant tracking, onboarding and other HR components in our HRIS, but they are too difficult to set up. It’s not worth our time to set them up. We would have to hire another full-time person just to set those modules up.” – HR Manager, portfolio company management industry
While it’s human nature to avoid situations that are expected to be unpleasant or even painful, to address the “change will take too much time” objection you must focus on the long-term impact of staying with a solution that is a mismatch for your employer’s needs. This approach can be aided by hard data on how many man hours are spent working around a system, redundantly entering data and/or manually completing tasks that could be automated for better efficiency. Then, calculate the cost of those man hours to come up with a quantitative answer for considering the return on investment for a new application.
Data is the key to determining whether a short-term disruption associated with software adoption is less expensive than the financial wake left by your existing software-assisted workflow. Bear in mind this takes a fatalistic approach of HR software vendors’ ability to successfully support clients through implementation in a reasonable time. However, employers’ fear of system change can be minimized by selecting a vendor with a strong track record of timely implementation assistance and ongoing support.
What if being short on time is significantly compounded by a small HR department? While you may be able to get over the hump of increased access fees, and you’re willing to dig in to switch systems, you still only have so much staff bandwidth to get it done along with all the other fires that pop up in the world of HR.
Ask this question: If there were no budget or manpower constraints, what would we be doing differently to support our employees and our organization’s mission? Even though you may think shirking the reality of budgets is like living in a fantasy world, your brainstorm will paint a picture of the ultimate vision for employee experience and clarify which HR-related tasks are most important for organizational success. Remember: retaining the best employees supports profitability.
With true vision in mind, process stakeholders have a starting point to examine the opportunity cost of individuals’ collective time. The true priorities of the department become evident and draw attention to the resource constraint that may be created by doing things the existing way relative to the cost of implementing change.
Buy-in and Support
Lastly, the inertia of static HR processes is often maintained by a difference in perspective between HR, employees and managers. One of the primary reasons making a business case to senior management remains a challenging task is because the language and analytics traditionally used by HR professionals may not be as intriguing to others in leadership roles. For instance, while turnover percentage and time-to-fill are reliable indicators to many in the human resources arena, these HR metrics don’t necessarily translate well to CFOs, COOs, or presidents.
- “At the beginning of 2017, my organization needed to fill 70 open positions. We hired way more, but voluntary terminations have increased by dramatically more than the number of hires made–it’s the nature of the difficult work. In fact, we hired almost 400 people. Full time employee turnover is at 48%, and part-time turnover is an embarrassing 201%. Our management thinks we need to fix recruiting, but turnover is more attributable to poor experience. Our stats don’t lie.” – Director of HR, non-profit industry
- “The three big barriers are: the bandwidth for our HR department to implement something new; getting buy-in from the field (it takes bandwidth to get buy-in); and, the cost to make those changes.” – Director of Human Resources, healthcare industry
Getting buy-in and support for technology change starts with HR software product owners getting on the same page as employees and senior managers. As the two comments above illustrate, different factors can be at play when it comes to stalled out tech decisions. However, the remedy for both objections starts with telling others what’s in it for them–and with language that is easy to understand.
Organizational decision makers care about the bottom line, and so remember that when attempting to alter their inert opinion on your existing software tools. For example, when adding applicant tracking or employee onboarding software, some HR leaders focus primarily on justifying these new applications by focusing on efficiencies gained and/or staff time saved.
While these metrics have merit, they also fall outside the common terminology of many finance and operations leaders. Because efficiency and staff time saved in HR are difficult to quantify and not as directly attributable to the bottom line, these savings may be discounted or dismissed entirely.
However, focusing on what direct impact those efficiencies can have on the revenue growth or profitability of the organization changes the conversation completely. Identify the key performance indicators (KPIs) that impact business outcomes and then describe how those business outcomes can be positively changed as the result of new technology implementation.
Don’t forget to be prepared; come to management with a solution, not just a problem. Record benchmark levels for your KPIs and organize your findings in a manner consistent with how management prefers to process information and make decisions. Consider a SWOT Analysis supported by cost projections in which you are illustrating strengths, weaknesses, opportunities and threats.
It’s also important to get buy-in from existing employees–particularly those who will be heavy users of new software. And, in the HR technology space, that often includes all employees when you consider the self-service options available with employee onboarding, time and record keeping, payroll and performance management interfaces.
Spread the word to gather internal support by regularly communicating about potential change, conducting research with potential users and assuring others that due diligence now will likely prevent the organization from finding itself with a need to adopt new technology later–when it’s potentially more painful to do so.
Most importantly, create triggers to constantly re-evaluate how technology is aligned with your organizational goals and how it is impacting your employee experience. Take action on lessons learned and communicate the impact of changes made to others so that your HR technology system is considered legitimate and positive to your workforce.
It Takes a Village
Don’t fall victim to the tendency to put off what you could do today until tomorrow. In addition to rallying the support of senior management and employees, look to your technology vendor to help you make a case for change.
Ask your vendor partners if they have case studies, blogs, e-books or other content that provide tips on how to make a business case, as well as specific ideas on which KPIs might be the most effective in demonstrating the financial impact of a potential change. If it’s important for your vendor to partner with you in discussions with your management team, make that request.
Daunting as new technology adoption may seem, know that you and your HR team don’t have to go it alone. Even when your existing system isn’t necessarily broken, fight the inertia of not wanting to bother with change, or not considering the exponential impact that additional efficiency may have on the employee experience.