Cloud-based software has opened up HR and payroll automation possibilities for businesses of any size and clearly there’s a pent-up demand for this: research indicates that 63% of organisations are planning new investments in HR tech over the next 3 years.
However, the same research indicates that up to 30% of HR tech implementation projects fail. With that sobering statistic in mind, here are 5 of the most common reasons why they fail – and how to avoid them.
1. Lack of a business case
According to Mercer, 16% of HR tech implementations fail due to the absence of a solid business case. Just like any significant investment, if HR cannot articulate what the business benefits are, they’ll likely struggle to get it off the ground and implemented successfully. A business case should be the foundation of the project, operating almost as a blueprint, outlining the how, what, why and when of the project.
As ELMO frequently highlights, any business case should contain the “default” essentials of cost savings and productivity gains/headcount reductions, but also slightly more intangible benefits that could flow from new technology, such as the ability to provide better talent analytics.
A business case should touch on the future, with indications of what technology can deliver to the business over the short, mid and long-term. New technology has the potential to significantly transform how HR and payroll functions operate so it might warrant outlining the wider repercussions of this. For example, perhaps you previously didn’t have the right tools in place, so you had no performance management process; or you may discover that the new tech will allow you to deliver HR and payroll services in a totally different way – perhaps with a shared services structure.
2. Poor change management
Mercer’s research indicates a whopping 30% of HR tech implementation projects fail due to poor change management. It’s easy to see why this is critical to get right: without effective change management, the end result can be disgruntled employees, resistance to the changes, slow adoption of new procedures or processes, and results that don’t hit the mark. Here are some change essentials to consider as a minimum:
- Involve employees. Don’t make this only “top-down”; consider who this is going to impact the most – your employees. Ask their opinions and get their input on how the business runs today and what they believe should be changed. They’ll feel more committed and invested in the change, and you’ll benefit from feedback from the frontline.
- Delegate effectively. What tasks can be handed out to employees to get them contributing to the end goal? Spreading the workload and encouraging employees to solve problems creatively makes them feel integral to the future success of any project.
- Follow through. Remain firm in your goals and ensure that changes are properly implemented and fully completed. Also, be flexible and prepared to alter your strategies if necessary.
- Build the right team. Get the right cross-functional team together. They should be fully committed to the change initiative, well-respected within the organisation, and have power and influence to drive the change effort at their levels.
3. Stakeholder disconnection
Let’s face it, there are countless stakeholders to get onboard and appease when it comes to technology investments: IT, procurement, finance, the CEO, etc. While the direct input of these stakeholders may ease once a decision has been made as to which HR software to purchase, you might want to consider creating a steering committee to meet regularly and keep them informed on implementation progress. And yes, HR should be leading this committee – not only to make sure what was promised can or will be delivered, but also for knowledge-sharing purposes. If HR understands the changes, they can sit with the leadership or executive team to pass that knowledge along. HR’s role in change management is as much managing down and throughout the organisation as it is “managing up”.
4. Taking on too much
Tech implementations often come undone when the organisation attempts to do it all in one go. Don’t “boil the ocean”; in other words, don’t undertake an impossible task by making the change program so massive that it loses both the focus and enthusiasm of those impacted. In addition to change management expertise, project management skills can help to set realistic timeframes. For example, planning some “breathing room” time – especially during user testing phases – can ensure the project doesn’t come under fire for falling behind schedule.
Remember: failing to hit deadlines can severely dent credibility. Just as critically, effective project management skills allow you to pause, draw breath and celebrate achievements as you move through the project. Highlighting quick wins can help build the case for change, especially if the quick win involves improving efficiency or automating previously manual tasks. There’s nothing more powerful than people seeing the ‘what’s in it for me’ benefits first-hand.
Piloting components of new tech within a function or department can also help to iron out teething problems and can shape the communication plan as you work along the journey to complete the whole tech implementation.
5. Not enough employee training
There’s a temptation to believe that once a system is live, the hard work is done. However, that’s forgetting the human element involved in launching anything new. Focusing on the employee experience as much as the HR and/or payroll team’s experience, and investing the time upfront to ensure your people understand what you are doing, why, and how it will benefit them, will pay dividends in the long run. This commitment extends to appropriate training.
Familiarity with technology will vary widely among employees, so training efforts should reflect this. Your tech vendor should be able to assist with training. Initially, regularly scheduled demonstrations of the new technology can help to introduce what the technology can do. These can be posted online for reference at any time. From there, some might prefer an online training session; others may need the support of a personal coach. Encourage managers to lead by example by showing their teams that they are investing time themselves in becoming familiar with the new technology. Regardless of training delivery, new processes and procedures should be documented for easy access.
HR professionals would do well to keep in mind the saying “expect the unexpected” when it comes to HR tech implementations – but with careful planning and good change management, your organisation should be able to avoid these 5 mistakes and reap the benefits of increased productivity, streamlined internal processes and the ability to make smarter, faster decisions.
To find out how ELMO Cloud HR & Payroll can help your organisation transform HR processes from hire to retire, including those relating to recruitment, learning, payroll and more, contact us and one of our consultants will be more than happy to reach out.