VC investment alters the HR technology landscape

hr_investment_bargraphBillions of dollars invested in HR technology companies have created a handful of new and reborn one-size-fits-all HCM vendors who made a big splash on the HR scene throughout 2015 and 2016. Not to be outdone, niche HR specialist vendors have upped the ante with some very compelling niche products targeting recruiting, performance, learning, compliance, and social collaboration. Choice is always a good thing for HR departments. How does all this investment in HR technology companies change the way HR executives think about using technology within their operations? 

To best-of-breed or not to best-of-breed? That is now the question.

There is no question that current thinking leads HR executives toward single-vendor-fits-all approach for HCM over using multiple best-of-breed niche software providers. The best-of-breed approach may gain favor as convenient and reliable data exchange service to core HR platforms mature. I’m seeing this trend occur with SMB accounting and sales automation providers now supporting data exchange to financial institutions, POS, fulfillment services, lead sources, and even benchmarking data. I expect the HR space to follow suite making a best-of-breed solution approach more viable for HR executives to consider in the future.

A new category is born—The Social Workplace.

Facebook, Google, and Microsoft are all well-positioned to Socialize the workplace. Social tools at work have the potential to reinvent tracking time, electing benefits, performance management, training, and coaching. This goes much deeper that LinkedIn or Glassdoor—think Facebook, SharePoint, and GoToMeeting combined. In fact, Facebook is already in the game with Workplace by Facebook (https://workplace.fb.com/) launched in late 2016. Gaining access to the employee’s wallet will be the holy grail for Social Workplace vendors, and HR is positioned as the epicenter to be the gatekeeper and policy maker for this new category. I’m concerned that many HR executives are too overwhelmed with day-to-day workload to properly address this opportunity. So, jumping into bed with Facebook may be convenient but not in their companies’ best interests. There are so many issues to consider: security, privacy, data ownership, productivity, etc. It’s HR’s ball to carry right now, and I’m hopeful that HR executives prioritize their time so they can lead the charge to carefully, thoughtfully, and safely deploy Social Collaboration in their workplaces.

Regulations grow exponentially; strategic outsourcing is HRs only hope to keep up.

With all good intentions government continues to burden companies with new reporting and regulation. With the expansion of E-Verify, EEOC, health and welfare laws, efforts to curb tax refund fraud and change tax brackets, the coming compliance burden continues to grow. We’ve learned from the ACA that new employment laws can be anything but a routine and predictable compliance job during their initial rollout. Already understaffed HR departments should strategically outsource these duties to specialists because when you bake in the true cost of doing the work yourself, outsourcing is truly more affordable and reduces compliance failure risks at the same time.

On premise software bites the dust.

Technology investments have favored Cloud vendors exclusively since investors like the advantages of the Cloud business model with shorter development cycle times, a single code base across the customer base, a streamlined support experience, and out-of-the-box integrations with third-party vendors. These things are all made possible by the Cloud software business model. The Cloud business model also does away with version upgrades costs and aligns customer and vendor interests around a stable and compelling product version which reduces the demand for support. That benefits both parties. Vendors are rewarded with lower costs and clients are rewarded with a better product and lower total cost of ownership. As most software vendors exclusively align their products to cloud deployment, on premise software becomes a relic of the past.

The billions of investment dollars in the HR technology space over the past five years has created new choice for HR departments. HR executives should look to outsource the increased burden of compliance to leave them bandwidth to focus on strategic technology investments such as Social Workplace tools and Human Capital Management software. Arguments will still be made for a single vendor solution, but a best-of-breed approach may gain more favor soon. Either way, HR needs to exercise caution with adequate due diligence in the vendor selection process. Don’t pick a vendor solely on technology demonstrations. A vendor that is too focused on feature-packing and super growth and not enough on customer service can be a nightmare to deal with. Nothing can make up for bad partner choices and failed implementations. The cost, aggravation, disruption, loss of time, and negative hit to your reputation as an HR leader is unrecoverable.

HR Cloud 9 requires a great ecosystem

woman_cloudHR Cloud 9 is being in a state of perfect contentment with your HR ecosystem. Getting to HR Cloud 9 isn’t a trivial matter, and it isn’t about choosing one vendor to handle everything. The choices you make when building out your HR ecosystem will either form your utopia or nightmare. To get to HR Cloud 9, consider how your ecosystem will fair in the following areas. If you do, you’ll be well on your way to Cloud 9.

You want intimate customer service experience that is highly accessible and feels like an extension of your staff. Vendors that strive for an intimate customer service relationship take customer service to a different level. Service personnel staff have relevant up-to-the-minute information such as sales orders, setup documents, and all service history. Each and every service staff member has the requisite and relevant industry and product expertise to be knowledgeable and helpful to customers. Customer service people who are empathetic and highly value the voice of the customer. They are reliable, interchangeable, efficient, and effective in resolving customer service issues and exceeding customer expectations. This is more than just responding quickly. Each customer exchange is a seamless, predictable experience, and a customer is never asked to retrace or rehash a service issue. And for those issues that require more than a few days to achieve resolution, service staff clearly communicate timelines and resolution expectations to mitigate misunderstandings upfront.

You want software designed the way HR people think and works the way it’s expected to. Great HR software is built with the end user in mind. The HR user experience should mirror the way HR people think and work. The manager experience should complement the managers’ work and work day. The employee experience should be designed for casual use and promote communication and feedback to encourage engagement and recognition behaviors, which lead to happy workers. Don’t settle for clunky and hard to use. There are way better options today. This applies to HCM and more. Today, the Girl Scout’s Digital Cookie™ app[i] is used by Girl Scouts to “gain new business and social skills in an entertaining and engaging way.” Your HR Cloud 9 needs this too.

You need speed and accessibility because lack of speed and accessibility kills productivity. Review service level agreements for reasonable up-time guarantees and response time measures for all major application functions. If you require access at remote locations or via mobile devices, verify that your solution supports those forms of access. Most cloud vendors use a shared infrastructure of web servers, applications servers, and database servers that are accessible via the public internet. Many cloud vendors do not offer exclusive use to a single organization, so performance can be impacted by what other users are doing at any given time. Don’t get bogged down by poor performance; it’s a real drag and a time suck.

You need to be sure that the vendor’s solution “box” of capability is big enough for your needs. A single code base is another key tenant of modern HCM systems. A lot of Cloud providers have application policies to customize look and feel and even some parts of the customer experience. So, that doesn’t necessarily mean that every customer is stuck with the exact same user experience. But it does mean that code customization for the unique need of a single customer is not supported. Keep in mind that mature solutions tend to have a bigger “box” of capability that allows more organizations to be easily supported by the product. Choose solutions that meet your needs today and for the near future.

You need an evolved reporting capability that shields end-users from complexity. Modern HR Cloud software solutions are built on large data repositories with comingled customer data because this is most efficient and affordable for them. This multi-tenant design requires programming to separate customers logically and adds complexity to data reporting. Techniques like de-normalized database views and metadata layers facilitating intuitive data relationship, grouping, and summaries go a long way toward enhancing the productivity of a reporting user. Ultimately, the best approach eliminates all reporting complexity by abstracting the data relationships from the end-user altogether. This yields point and click report definitions, grouping, and summaries in the most user friendly format available and ultimately makes the reporting function available to a greater cross section of your organization.

You need good support for system integration, data imports, and data exports. Supporting the data needs of the various executive that an HR department services means getting data in and out of the system in a secure and efficient manner is an essential requirement. Employee loads, time imports, carrier feeds, G/L files, and published web service integration points are just a few examples. Don’t get painted in a corner with cloud solution that doesn’t meet your integration requirements.

Achieving the perfect ecosystem for your HR function could mean multiple vendors.[ii] Look for each of those vendors to provide an intimate customer service experience, fast and reliable access, flexible software capabilities that meet your current and future needs, a user experience that mirrors the way people work, and reporting and data extraction that don’t require a programmer to use.

Choose your partners wisely and be on HR Cloud 9.

This blog was written by Richard Cangemi, Chief Executive Guru at PeopleGuru™. This post may not be copied or published without permission.

[i] Girl Scouts. Digital Cookie 2.0. GirlScouts.org. Retrieved from https://www.girlscouts.org/en/cookies/all-about-cookies/digital-cookie.html (accessed 18 August 2016).

[ii] Fosway Group Limited and Decebo®. (July 2015). Integrating the HR Landscape on the Cloud. Retrieved from http://www.cedma-europe.org/newsletter_articles/misc/Integrating_the_HR_Landscape_on_the_Cloud_(Jul_2015).pdf

Dark clouds of vendors are hanging over us

Do you listen to who uses your software?  Are you really listening to those who are responsible for the success of the project and your product? Or have you completely deprioritized your existing clients’ needs due to the constant push for new customers and revenue growth? Are you slamming customers onto the software without regard to their unique needs and befuddling and disappointing stakeholders and end users with lack of tangible results from their investment and hard work? Are you forcing new clients to compromise core objectives to accommodate overly optimistic go-live dates? Do you feel compelled to be a jack-of-all-trades and showcase feature parity with competitors hijacking your development roadmap leaving your product a mile wide and inch deep?

In my experience, the answers to these questions are now too often “Yes,” which is a strategy that is short sighted and sure to backfire. Bloated, hard-to-use software, rushed implementations, and low user satisfaction rates are not a recipe for success or growth. They are the recipe for failure. Cloud software vendors need to rethink their priorities and focus on change in the following areas.

Feature parity and one-upping your competition consumes development pipelines.

Rebalance priorities from adding new features to simplifying user experience.

It’s so easy to get caught up in a feature parity race and checking all the boxes on RFP responses that you completely neglect making the experience intuitive and creating the mobile-friendly experience that users desire. Your priorities are skewed toward taking orders while the needs of an existing, loyal user base are missed. The software gets bigger, more bloated, and harder to use. Users’ reject the software because the added features actually take them backward not forward. This alienates your users and lowers customer satisfaction. That consistently results in client losses over time.

Conversion of data in and out of the system is way too hard.

Step up to the plate and provide tools to make transforming data to and from your system fast and easy. 

Do vendors make it is hard to extract accurate and complete data from their system so they can’t easily be fired? Is conversion of data into a new system overly technical where it requires the use of expensive professional service resources just because the vendor wants the professional service revenue? Cloud based systems are often inherently inefficient and time consuming for data entry. Getting data into the cloud has been the Achilles heel of the industry. Vendors that do nothing to assist their users with data conversion features leave their customer between a rock and a hard place.

There is little focus and no vendor commitment to achieving the users’ desired outcomes and process improvement opportunities are ignored.

Truly engage as a partner ensuring that customers desired outcomes are fully met.

Once you’ve signed a contract with your cloud software vendor you’ve now begun a race to the finish line. Why is that? What is the rush? Is it because the vendor needs the client to go-live to recognize the revenue? Understanding user needs and business needs and then tweaking the software to meet those needs adds time and complexity to an implementation project. It’s faster and easier to ignore the uniqueness of each customer and conduct a vanilla implementation. Vanilla is what some Cloud software vendors push.

The result is an initial implementation with many missed opportunities for process improvement. Simply moving your current way of doing things over to a new system without thoughtful consideration of how the new system can be leveraged to improve things will likely perpetuate existing problems and inefficiency.  It is shame for Cloud vendors to railroad and marginalize users this way. It is not just a common courtesy, it is an obligation, for a vendor to ensure that their clientele isn’t hurried through implementation so that each client can get the most of their software investment.  As some claim Einstein said1, and as Rita Mae Brown wrote in Sudden Death, “Insanity is doing the same thing over and over again, but expecting different results.”2

Cloud vendors would be smart to wise up and address some serious strategic problems that stem from their insatiable desire to add new clients at the expense of taking care of the ones they already have.

1 Becker, Michael. (2012 Nov. 13). Einstein on misattribution: ‘I probably didn’t say that. Becker’s Online Journal. Retrieved from http://www.news.hypercrit.net/2012/11/13/einstein-on-misattribution-i-probably-didnt-say-that/

2 Brown, Rita Mae. (1983). Sudden Death. (pp. 68) New York: Random House. Retrieved from https://books.google.com/books?id=QJj9VqInFyUC&pg

HCM – Transition to Strategic and Predictive, Highly Engaged and Highly Productive

HCM Implementation Hierarchy

Phase 1 – Wage and hour, payroll and tax compliance requirements

Like food and shelter are to Maslow’s Hierarchy of Needs, Phase 1 HCM needs are fundamental to successful existence for any organization. An HCM implementation ensures these needs are fully met first.

Even mid-sized companies can struggle with Phase 1 needs and can find themselves in a fight for their lives. This can be due to growth spurts, mergers or acquisitions. Growth in employee counts, geographical footprint or revenue, all subject the company to governmental regulations including the Affordable Health Care Act, multi-jurisdictional taxation, and wage and hour law requirements, which strain an over-committed and growth-oriented management team. Spreadsheets, small-business payroll outsourcing and paper approvals are overwhelmed by sheer volume, inefficient procedures and duplicate processing. Information is lost, entered into systems multiple times, or otherwise inaccessible, inaccurate and/or ignored by managers.

I’ve seen first-hand how disruptive Wage and Hour or Department of Labor audits can be without the underlying recordkeeping to properly support the company; a costly event in precious time, legal fees, and fines. I have also witnessed dishonest employees and managers falsifying timesheets and payroll records literally robbing a company of payroll funds for years. Those management teams were preoccupied with growing the business and just didn’t have the proper HR systems in place to protect their company adequately.

Make no mistake that organizations with Phase 1 needs can be exciting companies with an impressive growth story, compelling products and services, and a management team engaged in fueling the rocket with talent and capital. And often those same managers are savvy enough to recognize that to continue their impressive growth story hinges on fixing these foundational HR issues.

Phase 1 of the HCM implementation is all about reduction in the number and complexity of manual paper-based payroll transactions to ensure accuracy of management reporting and compliance with governmental regulations. This means deploying HCM features like:

  • A system to facilitate daily collection of time and labor (biometrics as needed) with manager oversight and approval directly fed to payroll.
  • Enterprise level payroll processing with the controls needed to ensure proper federal, state, and local taxation and labor allocation broken out by the needs of the company, whether that be by location, department, project, job, and/or task. That information is ultimately reportable and fed to the general ledger so the organization has a true picture of its spending in the various areas of its business.
  • HR recordkeeping practices are transitioned from small-business payroll, spreadsheets, and paper to an electronic system so this information is touched once and compliant with governmental regulations and can be managed efficiently.

Phase 2 – Improve transactional efficiency and productivity

Phase 2 is largely about workflow automation and can account for a good portion of the return on investment projected for the entire HCM project. Paper processes and duplicate work are transitioned to a vastly more efficient framework of system workflows and notifications. The organization benefits greatly by using Employee and Manager Self Service as data entry and approvals can be handled one-time and at their point of origin. Employee adoption of self-service is key to this phase and will likely require cultural reinforcement from top management.

The Phase 2 implementation delivers the benefits of HCM features like:

  • Employee Self Service allows employees to help themselves via a mobile device or web browser to view or modify information about themselves, including time-off requests, timesheets, compensation, and benefits. This feature reduces the demand for HR and managers to service enquiries from employees.
  • Manager Self Service empowers supervisors to manage information for their direct reports via a mobile device or web browser and to approve requests for time-off, payroll, benefit, or schedule changes online and in real-time.
  • System workflows and notifications streamline approval processes that are uniquely programmed to adhere to company policy, inform all relevant decision makers and collect electronic approvals.

Phase 3 – Talent Management

Phase 3 is about Talent Management features such as Recruiting, Onboarding, Benefit Enrollment, Performance Management, Salary Administration, and Career Development. Each of these capabilities addresses a specific area of the Human Resource function with a mobile and web-based capability to engage employees and supervisors in administering this work conveniently and efficiently. Careful attention must be paid to the foundational system workflow policies to ensure that the companies underlying HR policies are respected at all times.

  • Recruitment features include branded candidate mobile and web portals for job seekers, assessment and review tools for hiring managers, and system workflows to guide candidates through the process of completing job applications, screening questionnaires, interviews, and ultimately the offer process.
  • Onboarding walks a newly hired employee through the hire process, collecting relevant information and signatures for hiring paperwork.
  • eDocuments eliminate the paper documents and replace them with a mobile and web-based presentation and repository system that records signatures and document versioning.
  • Performance management provides for talent assessments, performance reviews, and succession planning with employee, supervisors, directors, and peers all engaged in the feedback loop.
  • Salary Administration distributes salary increases and bonus assignments across the entire organization respecting department, division or location budget requirements and engages the decision-makers with a multi-step approval process. Once all sign-offs are made, the system records employee and payroll changes seamlessly.
  • Automate Benefit Administration using online enrollment, carrier eligibility feeds and billing reconciliation tools. Employees enroll in benefits online and changes in those enrollments are conveniently fed to carriers electronically.

Phase 4 – Social HCM and Predictive Analytics

Phase 4 is for the most committed, sophisticated, and engaged management teams. These organizations consider human capital vital and invest accordingly striving to achieve a highly-productive workforce that is highly-engaged, and this can be an elusive goal. It’s not as simple as implementing system features. An employee engagement philosophy of teamwork, collaboration, rewards, and recognition is vital along with a management commitment to transparency to the drivers of the business. And the benefits can be tremendous with productivity gains and improved employee retention. It’s a simple fact that recognition, now distributed and administered by the system, can play a big part in employee retention and productivity. As Tom Peters co-wrote in Excellence, “…the simple act of paying positive attention to people has a great deal to do with productivity.” The Social HCM acts as both a conduit for teamwork and collaboration, and it speeds the feedback loop between project stakeholders and contributors to help keep projects and people on track.

Phase 4 is focused on the following initiatives:

  • Predictive Analytics provide a real-time, deep, and intuitive understanding of your organization and transparency to reveal the drivers of the business.
  • Social Collaboration features foster an engaged workforce enabling employees to easily build relationships, cross-collaborate, learn, share knowledge, and ultimately improve productivity.
  • Recognitions and rewards capabilities provide a framework for consistent, fair and public recognition to those deserving such accolades. Automation of badging and awards with points tracking removes the chore of reconciling points for redemption of gifts or other company rewards.

This phased methodology makes transitioning to a strategic, predictive, highly-productive, and highly-engaged workforce an orderly and controllable process. Of course, getting to the top of the pyramid requires real commitments to transparency and a philosophy that engages and rewards employees.

For organizations that aspire to be strategic, predictive, highly-productive, and highly-engaged, a modern HCM is just too compelling of a technology for those businesses to ignore.

References

McLeod, Saul. (2007/2014). Maslow’s Hierarchy of Needs. Retrieved from http://www.simplypsychology.org/maslow.html

Peters, Thomas J., Waterman, Robert H., and Austin, Nancy. (1992). Excellence: In Search of Excellence and A Passion for Excellence. (pp. 94). Quality Paperback Book Club. Retrieved from https://books.google.com/books?id=scy5AAAAIAAJ&dq

Are you ready for a storm of cloud-based software?

Knowing the right questions to ask when buying anything is essential. Sourcing cloud-based software is no exception. Cloud software can be tricky to evaluate because it’s bundled as a service to eliminate complexity. As a result, vendors are conditioned to provide little or no transparency to buyers. We are all too familiar with what happens when we make assumptions, right?

When you evaluate cloud software, break down each part of the service bundle and consider it individually. Here are tips to help you avoid a storm-cloud-based software solution.

Be sure to understand how the infrastructure is managed.

Cloud-based software is most often a shared infrastructure similar to the way we share public highways and bridges. This is called a multi-tenant configuration. The challenge is that heavy traffic and congestion at certain times can be a fact of life. Just as public transportation is not always suitable or convenient for transporting wide and heavy loads or private secure cargo, cloud-based solutions may not be suitable or convenient for supporting every unique business requirement. Larger and more sophisticated organizations can still make use of cloud solutions because the most sophisticated cloud vendors optionally support dedicated virtual machines for database, application, or even web servers. These configurations can eliminate many of the typical limitations of a shared infrastructure. If you need this today or in the future, choose a vendor that has the flexibility to customize the infrastructure to meet your needs.

On the infrastructure side of the cloud service, you should consider the following points before buying:

  • Will the vendor support a private connection with guaranteed bandwidth to eliminate traffic and congestion from other clientele?
  • What additional layers of security protection are optionally available?
  • How is the service updated for new functionality and compliance?
  • What are the intervals for applying maintenance releases and updates?
  • What are the service-level guarantees for uptime that are provided by the vendor?
  • What are the security policies for protecting your information from malware or other threats?
  • What level of reliability and redundancy is built into the service infrastructure?
  • Can the service be optionally configured to support dedicated hardware, virtual instances, or even in hybrid environment for companies with unique business needs?

Gauge how the system is going to perform in real life situations.

This one could really zap you if you’re not careful. Thoroughly evaluate performance, or you could be dead in the water and loosing revenue. Think in terms of your peak usage times or peak season and then make sure your cloud vendor understands your needs and can keep up with the influx of system activity that your company and others may need the cloud infrastructure to support. Get performance guarantees in writing.

Evaluate the functionality to be sure that it will serve your business needs.

Most of us instinctively think in terms of the web front-end functionality for this new cloud software we’re getting. But it’s not enough to just evaluate this piece alone with cloud solutions. Cloud vendors bundle the front-end that you see with the back-end functionality that you can’t see or touch. You need to know what is going on behind the scenes so you can ferret out what might be missing. Ask questions like:

  • What devices, OS’s, and browsers does the vendor support?
  • What level of customization can be supported to adjust the product to more closely match your requirements?
  • Can you manage the customization or is this only handled by the vendor? How are customizations supported?
  • How are integrations with third-parties handled?
  • What about single sign-on or items like active directory integration?
  • How do you access your data or even download your data for safekeeping?
  • What functionality is not real-time and subject to scheduling?
  • How are alerts managed?
  • What are your options for reporting and analytics?

Understand the true cost of using the cloud service.

Take the time to truly understand the pricing model and your true costs. Don’t solely rely on the sales proposal and estimate provided by the vendor. Find out:

  • How is the pricing incrementally adjusted for growth or shrinkage in the use of the service? Is it adjusted based on transactions or number of covered users or not at all?
  • How is data storage and bandwidth consumption managed? Are limits imposed or do charges kick in at certain thresholds?
  • What pricing guarantees can be provided to ensure that your price continues to be fair down the road?
  • Does the vendor offer a scaled down use of the service after cancellation? What are the charges for this usage?

Check out the bricks and mortar behind the cloud service.

What services are available conveniently and affordably from the vendor? Don’t assume. For example, PeopleGuru’s payroll cloud service bundles services for ACH origination, garnishment processing, check printing, new hire reporting, and federal-state-local tax filing with a dedicated account management team but many of our competitors don’t. Clients that are used to these traditional payroll outsourcing conveniences that switch to a cloud service without a bricks and mortar support operation have the unique challenges of staffing up to support these functions in-house. So, be sure to understand what services your cloud vendor is offering:

  • How is the vendor’s support operation structured?
  • What level of support is provided during your implementation process?
  • Does the vendor have a structured process for guiding your through the implementation?
  • What tools does the vendor provide to facilitate data conversion into their product?
  • How is training delivered?
  • Are self-help tools available?
  • Is technical support immediately available when you need it, or do you have to wait 48 or even 72 hours for a response to an email?
  • Will you have a dedicated account management team and an escalation point of contact, or will you have to wait in a call queue to get the next available representative at a call center?
  • Did you check two or three client references?

By considering the infrastructure management, real life performance, functionality, true cost, and bricks and mortar, you’ll avoid storm-clouds and will be able to identify the best cloud-based solution for your organization’s unique needs.

Super size me Service, please!

According to Merriam Webster’s online dictionary, “Super” is defined as being “of high grade” or the quality of “exhibiting the characteristics of its type to an extreme or excessive degree.” Merriam Webster’s online dictionary also defines “Serve” as “to be a servant.” So, really “Super Service” can be said more powerfully as: extreme servants delivering excessive service.

Wouldn’t it be nice if you could super-size service like you can super-size your lunch and transform your company culture to one of extreme servants delivering excessive service? This is certainly a dream come true for many growing companies. Unfortunately, it isn’t that easy to get to Super Service standards. It is possible however, over time to position your company to Super Service by adopting the following, mostly simple (one not so much), recommendations.

Know the needs and service history of all of your customers.

Starting with the sale, continuing through setup, onboarding, and then ongoing with continuing service, it is essential to document your customers’ service needs and open issues to be able to super serve your customers on a consistent basis. At Mangrove, we use a CRM (Customer Relationship Management) system to store relevant customer information such as sales orders, setup documents, etc., and then document customer encounters to create a customer profile with the institutional knowledge that is essential to serving our clientele with Super Service. When we engage a client, our service person can quickly review the CRM and determine the background information for important customer handling clues, such as: Has the recently called for a similar issue? Is someone else already working this issue? What out-of-the box service commitments do we have with this customer? This CRM allows us to perform as a united team and to collaborate toward developing and sharing a full understanding of our customers’ service needs and service history.

Communicate service expectations clearly and concisely.

In many cases service failures occur when the customer expects one thing, but your firm is doing something different. To be a Super Service organization, you’ll need to consistently manage your customers’ service expectations by documenting your service commitments and then sharing those documented commitments with teammates so you’ll effectively collaborate toward exceeding service expectations as a united team. With every customer exchange, a Super Service organization takes their obligation to communicate an understanding of what the immediate key service objectives are, develop and then communicate a plan to meet those objectives, and then arrive at an agreement of how success will be measured for achieving the previously defined objectives. This protocol of establishing an up-front agreement takes the guesswork out of service and ensures success, as long as you follow through with timely performance of your agreed-to service plan.

Measure your performance and how customers perceive your performance often.

Internal and external measures of your company’s performance are essential to maintaining Super Service levels and to making appropriate changes to improve service levels that aren’t making Super Service grades. At my company, Mangrove Software, we use a variety of tools to measure our performance including monthly department-level score cards, which objectively report our performance against our defined internal service levels and external customer surveys that help us gauge how our customers feel we are doing.

It’s not enough to just fix problems. Do something for the customer’s trouble.

The timely fixing of a customer’s complaint is essential to good service, but it’s just not enough to qualify for Super Service. To be a Super Servant, you must mend the relationship and rebuild trust that has been damaged by the service failure. Often the customer accommodation doesn’t have to be extravagant or excessive. Your customer will feel better if you simply recognize their inconvenience. It is always reasonable to credit charges for services failures, but often a small denomination gift card is more personal, powerful, and effective.

Follow up.

A few days after the dust settles, follow up with an email and a phone call. These follow-up communications are needed to reinforce your commitment to service and will help to strengthen your customer’s perception of being valuable to your firm. The intention is to convey these few things in this email and phone call:

  • A sincere apology and the accommodation provided, if a credit was issued. Personal gift cards should be handled in a separate communication.
  • An explanation of what went wrong, how the issue was resolved, and why it won’t happen again in the future.
  • Thanks for their patience, trust, and continued patronage.

Learn from your failures.

View every service failure as an opportunity to learn how to provide your clientele better service. Many customer service issues are symptoms of issues elsewhere in the organization and can and should be avoided with some planning and better, more concise communication. Empower your frontline service people to document service failures and then hold your leadership team accountable to identify the root cause of the service failures and create the needed policy, product, documentation, and/or service changes required mitigate these issues and keep them from happening again.

Put your money where your mouth is.

This is by far the most difficult recommendation to implement, but it is the one that can have the greatest immediate impact toward culturing Super Service. Give your customers control over a portion of your fees that will be earned by you based on your service performance, and then directly align your service team’s compensation with customers’ payment of these at-risk fees. This concept of having some percentage of your fees at risk where your firm earns its keep based meeting periodic measures of service-levels and/or quality expectations forces your service team into some important Super Service behaviors. For this program to work, your service team must define service expectations with the customer upfront and then manage to them with periodic and meaningful performance reviews with the client. This alignment between your customers’ expectations, service needs, and service, along with customer-controlled incentives to serve, is a very powerful tool toward being Super Service organization.

Taming the monsters inside us

An awful lot is written about security from an Information Technology perspective, so we are pre-programmed to think that security means firewalls, encryption protocols, password policies, tokens and the like. Unfortunately, organizations are most at risk of theft and fraud from those that have intimate knowledge of their inner workings. We often don’t hear about these events because they are perceived to be embarrassment to the victimized entity.

Over my career, I’ve seen a number of situations where organizations have unwittingly put themselves at great risk for internal or even customer fraud. I’ve also been privy to some clever (but misguided) attempts that have failed miserably.

And I’d like to share a few of these past situations that have left an indelible impression on me.

I’ll start with the Canadian felon who duplicated a legitimate client refund check and then proceeded to issue hundreds of duplicate checks off this account. Then there was the controller that embezzled cash by processing refunds to inactive client accounts and redirected the refund deposits to his mother in-law’s bank account. Another incident involved an accounts receivable clerk that literally cashed hundreds of customer checks into a duplicate company account that she fraudulently opened in her name only. I was once exposed to a situation where a payroll manager cleverly voided federal tax deposits and then transferred those exact funding amounts to her own bank account. I should also mention the former Human Resources manager that used his still-valid payroll login credentials to change employee net pay bank account numbers to fund anonymous electronic payroll debit cards. Not so long ago, an IT worker retaliated against his soon-to-be former employer by posting all employee salaries on multiple bulletin boards at work. And finally, the data processing technician who gleaned bank account numbers from a payroll export file and then made payments to credit cards online using those stolen account numbers.

The common denominator in all of these situations is an insider. Well thought-out internal security protocols and procedures are our best defense against this type of fraud.
Here are my recommendations to be protected against being defrauded by the monster inside us.

Be ever vigilant with your cash and cash accounts. Reconcile bank accounts frequently and separate the reconciliation responsibility from those who processes payments or create client accounts. Use online banking access to match checks, electronic payments, and deposits to your accounting system daily. Require two signatures and/or electronic authorization for all checks or transfers greater than a threshold amount. Place blocks on your accounts so only authorized third-parties can debit funds from you. Use positive pay banking features, and flag unknown transactions and investigate them immediately. Good internal controls and procedures are the best deterrent to internal fraud. These basic steps will not only reduce your exposure to fraud but they’ll help you identify it really quickly when it happens so you can mitigate your damages substantially.

Separate Duties. I’ll say it again for effect. Separation of duties is essential. For example, never-ever-ever have the person who receives the money and credits the client accounts also produce your client billing. Client setup and termination should never be handled by the person that collects and posts your money. The person who reconciles the bank accounts should be different that the one that makes journal entries into the accounting system. You get the idea here: Separate duties so one accounting function provides a built-in audit to the other accounting function.
Expire access to systems and facilities prior to terminating employees. Termination can trigger retaliation and drama. Don’t put your company at risk for embarrassing post-termination drama. Get your ducks in a row prior to letting all employees go by terminating their access to all systems, collecting all their company assets, and ensuring that their access to facilities is limited.

Treat your payroll vendor like it is giving away your money. Just because you’ve outsourced your payroll doesn’t mean that you are safe from fraud. Make sure you separate the duty of changing account numbers from the person that reviews account number changes. It is a good practice to audit direct deposit account changes prior to processing each payroll. Also verify all third-party deposits. Review all manually entered checks, adjustment checks, and voided payments. Ensure that appropriate security is setup so sensitive information like salaries, social security numbers, and account numbers are available on a need-to-know basis. Limit those who can create output data or exported reports with sensitive data. Interface and export files should be encrypted at the source before they are downloaded or transmitted. A good payroll vendor will provide features such as warnings and detail reports to make these audits and verification steps fast and painless. If your payroll company doesn’t support these important features, then get a new payroll company.

The above recommendations are not intended to be exhaustive. The examples should make you think and assess your fraud risks and create a plan to mitigate them. Disciplined audit and security protocols are a great deterrent to fraud, and that deterrent may just be enough to tame those monsters inside your organization.

The Social HCM

With more than one billion active Facebook users already, social networking is strong and getting stronger as literally hundreds of millions of new users join a social network this year.

Unfortunately, business adoption of social networking hasn’t extended much past the marketing department. Business has made its social network investments targeted toward gaining more customers and selling more products or services. Companies are behind the eight ball in their use of social network tools within the workplace and aren’t taking advantage of social networking’s potential to reinvent how workers connect, collaborate, and learn in the workplace. These tools can ultimately improve profits and promote a happier and more engaged workforce.

The modern dispersed workplace needs “social.” Business suffers with fundamental communication issues ranging from misinterpretations and assumptions to lack of follow-through, privacy issues, and inadequate distribution of vital information.

A workplace social network solves these problems because it redefines communication in fundamental and convenient ways. We now connect with friends and family and share multimedia content, update statuses, and check-in at familiar destinations—all paradigms that didn’t exist ten years ago. These new paradigms take social media beyond its entertainment value and improve communication in ways that benefit the sender and the recipient, making social media the most convenient means for sharing information. With such a dynamic shift in people’s communication preferences, why has business been so slow to adopt social networking tools for its workforce? This is for one simple reason. Current social collaboration products simply mimic the features of consumer products and lack the game-changing benefits needed for organizations to adopt them. Businesses will adopt a workplace social network when the products transcend novelty and entertainment-value to become an actionable tool for communication and vital business decision-making.

Human capital management fused to a social network is what is needed. The social graph inherent to the Human Resources function is the foundational element for building a “socially networked” workforce. This Human Resources function, once made socially-aware, can be used to identify, predict, and facilitate many of the actionable aspects of Human Capital Management to drive substantial productivity gains and cost savings. I refer to this game-changer as Social Human Capital Management or Social HCM for short.

A few of the productivity gains and cost savings that can be expected from a Social HCM are as follows:

Speed information flow and decision making.

A social network with its diversity of relevant connections increases communication and collaboration. When employees communicate and collaborate they are more careful and thorough in their thought processes, and in turn they develop better plans. Better planning improves speed, quality, and execution. Agility shortens the cycle of innovation and learning, and these are the keys to establishing a competitive edge and profits.

And it doesn’t stop there. Social HCM distributes actionable events, polls, and notifications, all within an easy-to-follow and familiar interface for information consumption. Users need only to look in one place for all relevant actionable items, such as time off requests or other items needing review, action or approval. Define and schedule favorite informational reports and event notifications to be delivered to your stream or to others as well. And keeping tabs on the whereabouts of your subordinates is gracefully managed by following check-ins and status updates from your direct-report workgroup. A manager can offer his employees instant feedback or tag items for future reference. As feedback from manager to employee is more frequent and conveniently indexed, the chore of managing performance is minified, and reviews can be conducted more accurately and more often with the most relevant content and feedback organized chronologically, by good or bad, or even by competency.

Improve relevancy and avoid Information overload.

The social network is an intelligent design with an intuitive framework for managing the high volume of information that workers face today. Replacing e-mail as a primary business collaboration tool will accelerate the benefits of the social network since the social network allows you catch what you need from the flow information, when you need it, without having to consume the entire river of information. Documents, multimedia files, ideas, and experiences can be exchanged privately or to entire departments, locations, workgroups, special project groups, or private communities. This flow of information can be tagged and retention periods defined so that relevancy for future learning remains high. Like, view, comment, share, alerts, along with tagging activities for follow-up—these concepts are intuitive ways for information consumption and exchange that are adopted from the consumer social network and optimized for use in business. The end result is relevant information accessible like never before–from your desktop browser or mobile device.

Promote employee engagement, productivity, and retention.

“The simple act of paying positive attention to people has a great deal to do with productivity.” ― Tom Peters.

Recognition is a very effective and often underused form of motivation. Ask any HR professional and they’ll say that a recognized worker is more likely to be a satisfied and long-term employee. Social HCM both automates and provides for ad-hoc distribution of frequent, consistent, and fair public recognition to those employees deserving such recognition. Connect social badging metaphors to HCM’s traditional award and points tracking capabilities, and you’ve removed the chore of managing and assigning points for redemption of gifts or other company rewards.

Speeding the feedback loop between project stakeholders and contributors is essential to ensure that projects remain on track. As Henry David Thoreau once said, “It is not enough to be busy… The question is: what are we busy about?”Communicating status and milestone updates regularly to the stakeholders and contributors is one way that Social HCM helps teams stay connected, engaged, on-track, and held accountable for their individual and team productivity. These are the very teams that are most likely to take pride and ownership in their work and perform better.

Increase compliance and utilization of intranets and self-service.

How do you get highly distracted employees to focus on quality initiatives, complete paperwork, read and follow important corporate communications, and respond to surveys without making them feel badgered and controlled? You provide simple and intuitive means for employees interact with the company by adopting the social network metaphor. Punching time clocks gives way to check-ins, status updates serve to update project milestones and project members, pay stubs are securely delivered to an employee’s stream, and events like open enrollment are simplified by virtue of the familiar easy-to-use interface—all of this making these tasks feel more like entertainment and less like work.

Improve knowledge transfer and business continuity.

In businesses, data is typically recorded and information is filed. But what happens to the great percentage of information that resides in the minds of employees? How do those in need of learning connect to those who can teach? For all businesses, it behooves them to establish a dialog before a vast amount of knowledge walks out the door as millions of baby boomers retire and their replacements lack essential core competencies. Social HCM can be the critical resource used to facilitate mentoring and sharing of organizational knowledge. Its metaphor both motivates and reinforces appropriate and responsible corporate citizenship as the social network promotes convenient, open, and transparent communication—the type of communication that is so much less likely to be ignored.

Social HCM will find its way into businesses as HCM software vendors fuse the social network metaphor to Human Capital Management. The virtues of this combination will be just too compelling of a technology for businesses to ignore.

Avoiding the “Saashole”

Software-as-a-Service (“SaaS”) is a software delivery model where the product and its associated data are hosted in the cloud, and users gain access to the application via a web browser. In recent years, many business applications including accounting, customer relationship management, enterprise resource planning, and human resource management have moved from on-premise licensed installations to SaaS as a primary delivery method. Gartner Group estimates that SaaS revenues will reach a projected $21.3 billion by 2015.

I should say upfront that I am a big fan of SaaS. Its simplified product and service model yields lower retail costs, improved vendor profitability, and makes customer support more convenient for everybody. Unfortunately this sometimes means that all customers have to be shoe-horned into “the box” of canned functionality. A “one size shoe that fits all” solution may work well for some organizations, but it often doesn’t for all. Organizations that have customization needs or unique integration requirements will find that SaaS is too restrictive for them and in turn may end up in the “Saashole” trap. There are often better choices for these organizations such as hosted or an on-premises license.

Here are my tips for avoiding the “Saashole” trap:

Review service level agreements for reasonable up-time guarantees and response time measures for all major application functions. SaaS applications are cloud-based, meaning a shared infrastructure of web servers, applications servers, and database servers that are accessible via the public internet. SaaS does not offer exclusive use to a single organization so performance can be impacted by what other users are doing at any given time.

Does the vendor support the browser and platform that you desire? Now days SaaS is accessed using a web browser. Are you patient enough for browser-only access? Is your intended use conducive to browser access? Is your internet connection stable and fast enough?

Choose a vendor with a more evolved reporting capability that shields end-users from system complexity. SaaS vendors commonly use a large data repository comingling customer data as this is most efficient and affordable for them. This multi-tenant design requires programming to separate customers logically and adds complexity to data reporting. Techniques like de-normalized database views and metadata layers facilitating intuitive data relationship, grouping, and summaries go a long way to enhancing the productivity of reporting. Ultimately the best approach eliminates all reporting complexity by abstracting the data relationships from the end-user. This yields point-and-click report definitions, grouping, and summaries in the most user-friendly format available.

Make sure the vendor’s “box” of capability is big enough for your needs. A single code base is another key tenant of SaaS. A lot of SaaS providers have application policies to customize look and feel, and in some cases, parts of the customer experience, so that doesn’t necessarily mean that every customer is stuck with the exact same user experience. But it what it does mean is that code customization for the unique needs of a single customer is not supported. Keep in mind that mature products tend to have a bigger “box” of capability that allows more organizations to be easily supported by the product.

Don’t get “Saasholed” into a long-term contract without cancellation options. Yes it is true thatSaaS has a subscription pricing model, but many vendors impose minimum contract terms or early termination penalties. It’s no fun to be pigeon-holed with a contract for a product that is not working well for you. And what if your organization requires change? You must consider your future needs as well.

Don’t overlook your system integration points, data imports, and data exports. In our business of HR, Benefits, and Payroll, getting data in and out of the system in a secure and efficient manner is an essential requirement for our clientele. Employee loads, time imports, carrier feeds, G/L files, and published web service integration points are just a few examples. Does the SaaS solution you are considering meet your integration requirements?

The key to every successful SaaS implementation is matching customer requirements to the capability of the solution. Before making a buying decision, conduct enough due diligence to know if the solution is a good fit for your unique requirements. Like with so many things in life, the proof of the pudding is in the eating. One sure way of avoiding the “Saashole” trap is to try the service before signing a long-term contract.

Are you hunting Purple Squirrels?

The Purple Squirrel is a term used by recruiters to refer to the most elusive of candidates matched to the most difficult of job requirements. A highly sought after and elusive Purple Squirrel candidate possesses the perfect match of education, experience, and qualifications to fit a job’s diverse requirements like a glove;  it is therefore assumed that this prized candidate can immediately assume the job’s responsibility with little or no training and perform with enhanced productivity.

Recruiters dread the “setup-to-fail” Purple Squirrel candidate search because it can be nearly impossible to satisfy a hiring manager’s unrealistic expectations for these job openings. And it is a growing problem. The current buyer’s market for talent has led to hiring managers with expectations that are unreasonably selective where qualified candidates are passed over with the hope of finding more closely matched candidates or even ones with lower compensation needs—a really frustrating no-win situation for the recruiter and the candidate. It is a tragedy that more people aren’t working while so many jobs remain unfilled for months while organizations conduct exhaustive searches for their Cinderella of candidates. This is not an entirely new problem. A few years back I was involved in the sourcing of candidates for a company with many job openings. Our team was excited about the size of the opportunity with this new client but we failed to realize that this client had engaged us in a Purple Squirrel hunt. This client’s expectations were so impossible to meet that after several months of unrewarded efforts we parted ways. When we discussed the situation with the client he mused that a workforce of perfectly matched employees would enable his businesses unit to function with fewer workers and greater productivity.

So why shouldn’t we be incredibly demanding and selective in hiring? What’s wrong with this thinking?

Extended candidate sourcing expenses can exceed the incremental training costs for traditional candidates. Purple Squirrel jobs are so difficult and time consuming to source that the cost-of-hire for a Purple Squirrel can often exceed the incremental training cost for hiring less well-matched candidates. Time is money and wasted time leads to missed opportunities. Wasting excessive amounts of time interviewing and sourcing the Cinderella of candidates can leave your department or organization lagging in productivity or even behind schedule in other areas of the business altogether.

Technical capabilities have overwhelmed your sourcing criteria. If you are recruiting Purple Squirrels you are likely weighing the technical capabilities of your candidates too heavily. Candidates should be evaluated in a balanced manner where qualities such as cultural fit, self-motivation, willingness, adaptability, aptitude to learning, and the ability to work in teams can be just as important to long term job success as a specific degree, certification, and targeted industry experience. Weighing technical qualifications too heavily in the recruiting process can leave you open to turn-over and cultural and morale issues down the road.

You can’t predict the future so don’t paint yourself in the corner by hiring a one trick pony. Markets and organizations change and so do job duties. A better employee is so often the one that can adapt to change, learn new skills, and rise to future challenges.

Been there and done that already. Employees perform best when challenged with growth assignments. The whole concept of a finding a perfectly matched Purple Squirrel candidate is counter to the concept of a growth assignment. Do you want an employee that is willing to settle for a job that really isn’t that challenging, growth-oriented, or provides them with a learning opportunity?

For Pete’s sake…let the stale air out and bring some fresh in. Promoting from other departments or sourcing from outside your industry has real benefits. You gain employees with fresh perspective, access to sources of new talent, and ideas; this in turn creates fertile ground for positive change. Any additional training or startup costs for hiring newbies can be defrayed by lower initial compensation requirements.

Don’t let the parade pass sourcing Purple Squirrels. Here are four recommendations to limit your organizations exposure to the wasted time, effort, and the missed opportunities that accompany Purple Squirrel hunting.

1)      Set a fixed reasonable duration for sourcing candidates for each job opening. Use a talent management system like PeopleGuruTM to define reasonable durations (like 90 days) for sourcing open jobs. Hold HR, recruiters, and hiring managers accountable for executing within these defined time intervals and escalate the recruiting process using workflow notification events at defined points throughout the sourcing window.

2)      Encourage hiring diversity, equality, and balanced candidate evaluations by defining corporate-level hiring standards such as cultural and physiological evaluations along with job specific evaluation criteria; enforce these standards via automated online questionnaires and ratings with assigned balanced scoring and knock-out criteria ensuring that the job-specific requirements do not overwhelm the candidate sourcing process. This has an added benefit insomuch as it ensures that candidates are evaluated in the same manner and judged using the same criteria.

3)      Engage internal candidates first. Release new job openings to employees via employee self-service for at least two weeks prior to accepting outside candidates. This will ensure that your internal candidates get priority consideration and foster a culture of achievement.

4)      Track cost of hire accurately. To accurately track costs of hire you have to consider all recruiting costs including internal and external costs. Use your HR or recruiting system to assign costs to each phase of the recruiting process and not just the external costs. Track internal costs by allocating expenses and overhead to the internal resources consumed in addition to external costs. Only this approach will provide a true picture of your total cost of hiring for each job opening.

Purple Squirrels may sound adorable and harmless; I assure you they are not. For job seekers and recruiters alike it’s a growing nightmare of unfilled jobs waiting for a dream Cinderella candidate that really doesn’t exist.