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Inside HR Tech Column

http://www.hreonline.com/images/SteveBoese106x106.jpgPromises from the Cloud

Even seemingly "administrative" technologies reveal HR tech's new promise of turning workforce data into an asset for operational and strategic advantage.

Friday, April 11, 2014
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Last month, I opened the Inside HR Tech column by sharing the HR technology question I get most frequently: "Which HR software is best?"

This month, I'd like to expand on, or at least explore, a related and complementary question that I am also getting quite often lately, namely, "What are the benefits, particularly business and strategic benefits, my organization will realize from so-called big data after we've implemented HR technologies?"

Last month, my answer to "Which HR software is best?" was, "It depends." This month, to the "What benefits can I expect to gain from big data and HR tech?" question, I offer up the same frustrating answer: "It depends."

The additional data-driven insights and benefits that an organization can expect to accrue from the implementation of any HR and workplace technology are as varied as the myriad types of HR technologies that are available, the unique motivations of the companies that purchase these solutions and, finally, the complex blend of specific company culture, people readiness, project management, product capability and urgency for change that all factor into HR-software outcomes.

We have all heard the oft-repeated mantra that HR-data outcomes are only ever as good as the quality of data inputs. Even big data can just mean more bad data if HR leaders are not careful.

The growth of modern HCM technology solutions that are delivered via the Internet (aka the cloud) to hundreds and even thousands of customers are allowing some of the solution providers to do what was previously impossible -- collect, analyze and provide customers with insights on massive amounts of workplace data that are driving a kind of new paradigm in HR technology. Before, each individual customer's data resided only on their own. Now all HR technology projects are (or at least can be) big data projects, even ones that seem on the surface to be about simple automation or improving mundane and administrative processes.

This idea of data being at the core of every kind of HR software project is something I gleaned from my attendance at the recent Equifax Workforce Solutions annual customer conference in Scottsdale, Ariz.

The real power of "Modern HCM" delivered in the cloud: It's all in the data.

As explained at the Equifax event, when enterprise-software-solution providers first began delivering software over the Internet and on-demand, the primary benefit (particularly for the small and mid-size organization) was that the customers no longer needed to host the software themselves, which often required IT investment, resources or both.

With modern cloud technology, these concerns diminished as solution providers did all of the "heavy lifting" on the IT side. While offloading IT costs and complexity from the customer to the vendor was and remains a benefit of the cloud deployed solutions, the more powerful benefit now emerging is the ability for vendors to provide to their customers rich insights and visualizations from the massive amounts of data they have access to, and that are generated from across their customer base.

Just one example of how this phenomenon actually looks was shared at the event, when Equifax announced the release of its Workforce Insights solution. With this tool, Equifax' customers (and even for some data, the general public) have access to aggregated, anonymized and analyzed data sets on workforce trends such as turnover, salary and hiring. The solution provides employers with real-time access to important labor and employment trends that is based on transactional employment data, rather than self-reported and survey information. The net benefit to customers is the ability to see how they measure up against workforce benchmarks and trends based on industry and geography without having to invest time and resources to collect and interpret millions of data points on their own.

Data also drives and supports compliance.

Gleaning insights from the macro trends in hiring, separations, compensation and more, and then breaking down that data by industry and location, can provide HR and business leaders with some fantastic information from which to make comparisons and draw conclusions. But the data itself, and the ability to extract value from data, are also having an impact in more fundamental and even more compliance-related ways. One of the hot topics on most U.S.-based HR leaders' "Things I am worried about" lists would surely be understanding and complying with regulations, specifically the ever-confusing Affordable Care Act.

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Maintaining an understanding of the ACA reminds me of the punch line for that old joke about the weather: "Wait 10 minutes and it will change." Even the most knowledgeable HR leaders are going to struggle to stay on top of all the nuances and evolutions of the ACA.

Here is where data, technology and the combination of the two are helping HR and business leaders. Equifax's Affordable Care Act Management Platform, a winner of HRE's Top HR Products contest for 2013, helps organizations navigate the ACA in two critical areas: staying on top of the changing nature of the regulations and providing a data-driven technology platform that helps organizations understand how their workforce makeup and decisions affect not only their compliance with ACA, but also how these decisions impact the organization's bottom line.

Data-intensive technologies like these help leaders make the best decisions to questions such as "Will reducing employee hours to avoid ACA coverage requirements be the right strategy for us?" "How are the trends in labor hours impacting how my labor force is tracking, individually and in aggregate, with respect to ACA coverage eligibility?" and "What would happen if we changed the labor-force composition and/or schedule in this way with respect to eligibility, costs and compliance risk?"

Equifax Workforce Solutions (as well as several other solution providers) is working toward the new reality in HR technology: that every HR technology project is, at its core, a project about data, some of it even "big data."

When considering HR tech investments in the future, the question I referred to at the start of the column, will eventually become moot. The real question will be, "I have all this amazing HR data; what shall I do with it first?"

Steve Boese is a co-chair of HRE's HR Technology® Conference and a technology editor for LRP Publications. He also writes an HR blog and hosts the HR Happy Hour Show, a radio program and podcast. He can be emailed at sboese@lrp.com.

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