If talent management and employee engagement are such pressing priorities, why do investments in Human Resources technology keep getting pushed to the back of queue? Maybe it’s time to build a compelling business case in the language executives can understand.
BAI Banking Strategies
December 17, 2013
by Cindi Pacanin
Virtually every bank CEO acknowledges being in a fierce battle for talent. After the financial crisis occasioned layoffs and the tarnishing of banking’s reputation, attracting and keeping the right people and anticipating future job needs are strategic priorities. And not just in the latest skill areas of compliance, risk, cyber security, social media, and so on. In traditional areas such as sales, service, and lending, the skill bar is higher, and talented people have options in and out of banking.
Why, then, does the Human Resources (HR) department, which is instrumental in acquiring and deploying this talent, often find itself stuck with the most antiquated and least connected technology in the bank? Often, for example, HR lacks the tools to perform functions such as predicting staffing levels and modeling costs for acquisition or downsizing scenarios, spotting attrition or turnover trends, crunching huge amounts of data to target the best recruits, measuring performance and tying compensation accordingly, managing employee development plans and tracking the value of training programs.
These deficiencies can’t be linked to a lack of HR initiative. Most banks we visit do have in process a formal request for buying, integrating, or upgrading HR technology. HR doesn’t get pushed to the back of the queue because executive management doesn’t care about talent management, but rather because too often the business case isn’t convincing, with a theme that goes more or less like this: “The new system will make HR processes much more efficient, HR employees more effective, and the department will have new capabilities.”
That may sound wonderful to HR, but what CEO lies awake at night worrying about HR’s efficiency, in the grand scheme of things? As long as paychecks get processed, employee records get kept and HR keeps passing its compliance audits, everything’s fine, right? With competition so intense for every technology dollar, it is easy to see why, when managers have to choose which projects to de-prioritize, they find it safest to scratch HR. Risk, compliance and mobile all seem more pressing than a system that will help HR employees work more efficiently.
To get approval in this competitive environment, the HR technology business case needs to emphasize business – the business of the bank the way the CEO and CFO think about it.
First and foremost, the ideal business case should educate. HR technology capabilities have expanded well beyond traditional HR functions; it takes an expert to keep up. Human capital management, HR analytics, collaboration and self-service tools, employee development dashboards, wellness programs – if your bank doesn’t possess these capabilities, it’s doubtful your CEO and CFO share your insights about them.
By educating them about the technology’s benefits and how other companies, perhaps competitors, have profited from them, citing reliable research statistics, you can move your decision makers from “sounds good but” to, “that would be awesome.” Promising that this enhancement will ensure that we have a ‘single source of truth’ is a good start. But educating executives as to how long it currently takes to get an accurate picture of a single employee’s compensation history is convincing. So is describing how a manager-employee collaboration tool would let the chief financial officer, for example, at his/her convenience, pull up each direct report’s development plan and instantly see who is on track or who needs a push, instead of asking for information and waiting days for it to be assembled from different sources.
Education also means anticipating questions executive management is or will be asking HR, such as: In the next five years, where will we face a skill set shortage? A skill set surplus? Do we need a chief data officer and how would that work organizationally? What is the age/retirement status of our remaining programmers of legacy languages? How do the demographics of our workforce stack up? How do our workforce costs compare under possible scenarios? And questions they might not think to ask include: Would our current HR system support an acquisition or doom its success? Are there troubling trends in our turnover? If you can’t answer those questions efficiently, that’s key to your business case.
Second, the HR business case must dollarize. Not to discount the importance of anecdotes – even CFOs are not immune to the power of a memorable story. But anecdotes should supplement, not substitute for, the economic benefits. And again, that means benefits rendered not just in HR terms (time saved running payroll, or improved productivity of benefits administration) but in terms of the business of the enterprise. It’s fine to point out that an upgraded employee portal is a huge efficiency gain for HR. It’s essential to calculate the efficiency gain for the bank’s rainmakers in, say, lending and wealth management, and put a number to the portal’s attractiveness to recruitment prospects.
Likewise the total cost of ownership of today’s HR systems can eliminate costly integration management, software maintenance and infrastructure support for multiple legacy systems. If you are proposing self-service tools, the calculation is partly about HR cost reductions but mainly about better productivity across the bank when employees in the business units can manage their own development plans, along with their managers, without depending on HR staff.
If you can cite external research about a three-fold return on investment (ROI) on wellness programs, go ahead and dollarize that impact for your own bank. If you cite proven numbers about how employee self-service technology increases total organizational efficiency while reducing HR costs at other organizations, dollarize the impact for your bank.
Which brings us to collaboration, the third essential quality of a solid HR information systems business case. If finance people don’t instantly recognize the virtue of potential HR capabilities, neither do HR people instantly recognize the financial metrics needed to enlist support for their proposal from finance. A close collaboration with finance on the business case for the new system will open HR’s eyes to better ways to rationalize the purchase, enlisting the support of finance at the all-important fund/don’t fund decision spot.
A collaborative business case also contains thoughtful input from the business lines it is intended to support. Who better than the head of wealth management, for example, to help rationalize the need for technology that keeps the best relationship managers from looking for greener pastures? Who better than business line managers to support HR’s contention that self-serve HR tools will make managers and employees, no matter where, more content and efficient? Who better than IT executives to point out how they could profitably use technology people on revenue-driving projects once they no longer have to be assigned to making old HR systems talk to each other?
It’s time to eliminate the obsolete paradox – People matter most, but HR technology matters least – by building a compelling HR technology business case in the language of the CEO and CFO.
Ms. Pacanins is a senior consultant at Waypoint. She can be reached at