How do you make an HR transformation project fail?

Factors that should not be overlooked in a transformation of HR tools and processes

“I’ve been waiting for months for a project manager to be recruited for my team and no sign from HR… “The yearly review process serves no purpose. Most of my targets that I set for my team at the beginning of the year are no longer valid”. “I am not sure if I want to send my teams for training. Their skills don’t seem to have improved…”. There are over 40 people in HR and I have to wait 48 hours to get a simple work certificate…”

These are some examples of comments obtained at the start of an HR audit conducted recently in a company. And yet, two years ago, this company launched a major HR transformation project to deploy the best HR practices and modernize its HR tools.

How do we explain this situation?

The CEO explained that the company had to deal with a rapidly changing market requiring constant review of the business model and continuous innovation in work methods and organization. A Business Transformation program had been deployed over the past two years affecting most of the company’s departments, including HR. The HR teams were therefore asked to do the following:

  • Structure the recruiting process: set up a plan at the start of the year; implement recruiting over the course of the year, deploy a digital solution, harmonize evaluation sheets, train managers on evaluating candidates, encourage the company’s participation in recruitment trade fairs, social media and jobboards.
  • Increase performance: implement a campaign to set targets for all employees at the start of the year and assess performance at the end of the year based on indicators. In addition, an optional campaign to adjust the targets was planned mid-year to take changes to targets into account.
  • Improve employee skills: set up skills assessment, analyze the differences between actual skills and those required for the position, deploy complete training and an ambitious training plan covering all departments within the company.
  • Restructure the compensation policy: add an annual component linked to individual and group performance and the results of the company.

And yet, according to the CEO, all the HR tools and processes required for the completion of these targets were successfully employed. Employees and managers were provided with information and training so they could understand the company’s HR transformation and the new HR tools and processes.

Everything seemed to function correctly and the CEO asked Sopra HR to make an assessment on the impact of HR transformation on the business based on the following actions: meet with a representative sample of employees and managers, analyze annual review results, analyze indicators relating to training and recruitment, analyze the HR organization, assess skills of the HR teams and analyze the use of the HRIS.

It was established that the HR department was well structured, with detailed and precise procedures and that the new HR tools were well understood.

Several problem areas were found, however:

1- A general lack of agility

All HR processes were designed to be planned over long periods of time. Targets were set at the beginning of the year for the entire year. The situation was the same for recruiting and training plans. These plans were considered “sacred” and any changes to them required approval at many levels.

This discouraged the employees, who saw the HR tools given them as tedious administrative tasks required to handle end-of-year bonuses. Employees used such words as “slow”, “inefficient”, “complex” and “inflexible” to describe actions and processes of the HR department.

2- Too little impact on Business

The HR tools implemented were not very compatible with the responsiveness required by the new business paradigms. In addition, neither the training plans, compensation system, nor the performance management process took these responsiveness requirements into account. The targets assessed at the end of the year were not consistent with the business, because they were set at the beginning of the year and there was little possibility of adjusting mid-year and they could not be based on the company’s strategic objectives.

The training plan was so rigid that employees would often take a training course that had no real effect on business, because the training plan was based on needs expressed at the beginning of the year instead of business needs.

Concerning compensation, we observed just a slight pay rise with little difference made among employees, because managers were unable to take initiatives.

3 – No real change management procedures

The HR transformation project apparently was considered as an HR project, with employees and managers not really involved. With the exception of a few internal messages sent and training organized for employees and managers, the project was led by the HR team only, without really taking change management into account. There was a significant impact on the perception and attitude of the employees and managers, who were not inclined to use HR processes, seeing them as tedious chores with no added value for teams in the field.

4- Stagnation of the HR teams

Despite major changes to HR tools and processes in line with the change in the company’s HR policy, no improvement to the HR teams’ skills was planned. The new HR policy was thus implemented with the same approach as previously. The HR teams focused on implementing the processes and not the final result. They thought it was more important to deploy the annual assessment campaign within the time frames and for all employees than to analyze the results of the campaign and the quality of the assessment. The training team’s goal was to fully implement the training plan and not necessarily focus on the quality of the training courses or their impact on team performance or on business.

The HR organization was not really reviewed. And yet, the company’s HR transformation required major changes to the HR organization for greater proximity and efficiency in the field and to ensure correct deployment of new HR tools. With the exception of a new “HR Digitization” department, the HR organization remained exactly the same and all those in charge of the process also remained, despite certain problems and sometimes their resistance to HR transformation.

5- An underused HRIS

The company made an investment to provide the HR department with a very powerful HR information system. Most of the HR processes were digitized. Analyses, however, indicated that the HRIS was hardly used. The HRIS was generally used as a way of storing and viewing data and not enough for HR management and to increase performance. Half of employees used the HR portal to store certificates and only data required for payroll was fed into the HRIS. The dashboards continued to be produced outside the HRIS in Excel format and training was managed in an external application, despite the availability of a new training module.

Following these findings, a new HR road map was defined with the company for a one-year period to make adjustments to the organization and tools and implement corrective measures.

Factors that should not be overlooked in a transformation of HR tools and processes

The HR department in this company implemented an approach based on formalizing the processes and implementing HR tools and best practices, but without any real connection to the business. A strategy to transform HR tools and processes will not be successful unless it visibly changes the performance and commitment of the teams and develops the company’s business.

To do this, HR must be more agile, more decentralized and have a greater impact on the managers. The impact of HR must be measured continuously and corrective measures be taken as a result. Change management should also be taken into account on a continuous basis. At the same time, the HR teams should change and new skills will become important for HR professionals:

  • IT, to help with in the digitization of companies and HR departments.
  • Data and analytics, to efficiently leverage an increasingly greater quantity of HR data.
  • Service, to see employees as “internal customers’ that are to be served as best as possible to motivate and retain them.
  • Business, to take the company’s development needs in the HR strategy to implement.
  • Change management, to increase the impact and ensure a successful transformation of HR in the company.