We’ve written a lot about the importance of getting maximum leverage out of technology to improve the operation of health and human service organizations – When Choosing Treatment Technologies, Leverage The Low-Cost Options, Using Technology To Transform Your Business Model & Preserve Your Mission: Finding The Opportunities In A Changing Health & Human Service System, and How Do You Make Technology “Work” For You?. But I hadn’t thought a lot about the use of technology to remake the human resources (HR) function in organizations until a recent article by Jared Lindzon in WIRED, Welcome To The New Era Of Human Resources. His key point was, “HR is at a crossroads, as technology can now accomplish many of those traditional responsibilities faster, cheaper, and better than before.”
This is important for provider organization and hospital operating budgets, where labor costs are somewhere between 50% and 60% of operating budgets (see Salaries as a Percentage of Operating Expense and 10 Statistics on Hospital Labor Costs as a Percentage of Operating Revenue). Managers are looking for inefficiencies in every administrative line item – and if you can reduce the head count for HR administration with technology, so much the better.
Driving this change is recruiting software that is more advanced (and affordable) than previous job-posting and interviewing methods; a workforce of millennials that are “digital natives” with a proven track record of using technology differently than their predecessors (see Keys To Marketing To Millennial Consumers and Getting Donations From The Next Generation); and an industry that is moving from “transaction to interaction.” You may be asking does this work? The answer is yes. TalentCulture reports that the National Bureau of Economic Research found that when it comes to hiring new staff, computer algorithms are better than people at evaluating skills, personality, and overall job fit. The computer algorithm was also able to attain longer staff tenures than those staff selected by human recruiters (see Will Technology Replace HR in 2016?).
This is a critical issue for health and human service organizations beyond just cost savings – what we need from our “HR investment” is changing. The 2015 Deloitte report, Reinventing HR: An Extreme Makeover, points out that the role of HR is shifting in three critical ways:
- HR is being forced to redefine its role from “service provider” to an enabler and builder of talent
- HR is shifting from a group of generalists to a team of highly skilled business consultants
- Professional development has emerged as a key HR capability
This newly “transformed” HR organization has both operations staff that work with line managers and employees and “business partners” who work with more senior managers to ensure that the organization’s objectives are met. This sounds great in an ideal world, but most organizations have historically not made the investment in the “transformation” of HR managers – staying focused instead on compliance and transaction management. Perhaps in this situation, tech leverage reduces the number of “operational” HR staff needed in order to enable an investment in more business-focused, talent-building HR managers.
This transformation of an administrative function is not new. At the conclusion of the Deloitte study, there was a call-out box with this statement, “Instead of simply managing transactions, implementing policies, and developing programs, the new HR organization aims to focus on understanding the needs of the business and delivering value-added solutions.”
It reminded me that we are in the same transformation of the financial management function of health and human service organizations – from transactional managers to transformational leaders. (For more on that, see Your CFO & Your New Business Model, The New Role Of The CFO In Behavioral Health And Social Services: Evolving Financial Management Role Driven By Changes In External Environment and Reinventing The CFO: The Enhanced Role Financial Officers Play In A Shifting Market).
If you are wondering whether we are on the verge of seeing white-collar jobs displaced by technological advancements, the answer is yes – with a caveat. In the 2011 article, Will Robots Steal Your Job?, writer Farjad Manjoo noted, “As computers get better at processing and understanding language and at approximating human problem-solving skills, they’re putting a number of professions in peril. Those at risk include doctors, lawyers, pharmacists, scientists, and creative professionals—even writers like myself.” I believe that if you can be replaced by a “computer,” you will be. But I would argue that technological advancements are “liberating” white-collar professionals from mundane tasks and leaving them the time to develop their value-added skill sets (see We’ll Accept Robots As Human – And Become Immortal As Human-Machines). The key to job security is to deliver those value-added skills – but time will tell.
For more on building the talented team it takes to succeed in the year ahead, be sure to mark on your calendar The 2016 OPEN MINDS Executive Leadership Retreat on September 20-22, 2016 in Gettysburg. We’ll be focused on the executive skills every organization needs to maximize organizational performance and thrive in a changing health and human service market.