Types of Classes: Public versus Private

Once the organization has decided to move forward with training, it has a fundamental decision to make. Where will the class be held?

Organizations that want to build internal expertise in new applications have two choices: They can either send their employees to public or private training classes. Public classes typically take place at vendors' offices or at vendor-approved locations. These classes cost in the neighborhood of $500 per day per student. Many organizations in different stages of an implementation send users to public classes to learn how their systems work in a generic sense. In other words, a payroll manager should not go to a public class intent on learning how to set up and process payroll at her company, although she should walk away with more than a few ideas from the class. Because payroll personnel from other organizations attend public courses, the instructor will discuss the payroll application in general terms.

For public classes, clients travel to vendor sites, sometimes incurring significant travel costs. To the extent that client end users are out of the office, they should be able to focus exclusively on the class and the applications being taught. From a technical perspective, vendors should have sufficient computer terminals and training data areas. In other words, clients need no organizational IT involvement to attend a public class, nor do they necessarily need to bring laptops with the applications already on them.

Private classes are very different than public ones, both in terms of costs and content. For one, it's not uncommon for a vendor to charge upwards of $3,000 or more per day for a customized class at the client's site, because vendors know that client end users will not have to incur travel costs. Thus, from a strict cost standpoint, a private class with more than six people will probably be cost-effective for the organization. As for content, instructors will typically customize agendas specifically for each client. In a private payroll class, for example, the payroll manager can ask many specific questions related to her company's payroll setup and processing.

While, it may be less expensive for clients to host private classes in which trainers come to them, understand that employees attending private classes are in the office. Crises or emergencies can take them away from the class, reducing overall learning. Also, from a technical perspective, the trainer is not going to bring laptops configured with the software and training data areas. Consequently, the amount of IT involvement is much greater than that of a public class. The organization that brings in an instructor at $3,000 per day should ensure well before trainer's arrival that its hardware and software are "up to snuff". Nothing inhibits a class and frustrates all concerned more than "buggy" software and the lack of a proper training data area. The last thing that a client's management wants from a public class is a disaffected end user base.

Outside of a formal class (whether public or private), independent learning has become more populate. Recent advents such as web-based training (WBT) have become increasingly popular. While the cost savings are obvious and the convenience factor is high, remember that employees at their desks are often distracted by daily calls, e-mails, and old-fashioned door knocking. Consequently, the cost of a public course can sometimes be justified by the additional learning that tends to take place in an isolated environment.

Opportunities and Benefits

Organizations with tight budgets may not need to reduce headcount at present. There is a fundamental tension between lean staffing levels and organizational bench strength. Lack of widespread end user application and technical knowledge is dangerous in the event that a key employee decides to walk. Yes, even in these economic times some employees voluntarily leave their jobs for whatever reason.

To this end, organizations should consider expanding employee training, not cutting back. Whether employees are being cross-trained in different functions or learning new technologies altogether, the benefits of training can more than offset their costs. First and foremost, training mitigates the risk of key employee turnover. Second, the mid- or long-term savings of training may more than pay for itself. Two super users with substantial skills and a global perspective may be able to do the work of three or four limited end users, especially if they are skilled in different automation methods. Finally, while hardly tantamount to reassuring nervous employees about their employment futures, training can send a strong message to attendees: the organization wants you to develop your skills. And the message becomes "despite current economic challenges, we are committed to growing our employees' skills and abilities." This attitude may reduce the likelihood of voluntary employee attrition.

Growing Organization Risks

While understandable and often imperative for the continued survival of an organization, the aforementioned cutbacks promote a vicious cycle of increased organizational risk:

* Organizations reduce or eliminate formal training and informal opportunities for users to learn how to better utilize enterprise systems.
* This solidifies many users' bad habits and suboptimal processing methods.
* At the same time, organizations trim staff, resulting in more work among fewer employees. This means even less time for cross-pollination where employees are trained in multiple jobs.

Organizational risk is compounded if key employees leave the organization and, as is often the case, user documentation is lacking. For example, incumbents may scramble to figure out how Alex ran regular interfaces, Neil matched invoices, Julian filed tax reports with the government, and Nancy created database backups. If Alex, Neil, Julian, and Nancy are no longer with their organizations, then they are, in all likelihood, unable or unwilling to assist their former employers in the event that their help is needed.

Often, the best case scenario is that jobs performed by ex-employees are partially understood by their replacements. Nonetheless, this may very well result in increased risk of error, financial irregularities, expensive engagements with external consultants, or some other highly undesirable outcome. In the extreme, a single employee's departure may result in a missed payroll, an eventual government audit, or security breaches.

Breaking with Tradition

Traditionally, the next phase of the project would involve issuing a request for proposal (RFP), in which you would draw up a list of high-level requirements and submit it to a large list of HRMS software vendors. After reviewing your requirements, interested vendors would notify you if they were interested in competing for your business.

This approach is time-consuming because you have to wait for vendors to complete their reviews of your requirements and contact you with their intentions. The next step would be to draft a request for information (RFI) to send to those vendors that chose to compete. The RFI should describe your requirements in more detail, list your project goals and objectives, provide a high-level project timeline, and request background on the vendor (including information about its proposed solution, the technical architecture employed, implementation approach and methodology, hosting options or partners, references, testimonials, and pricing strategies).

I recommend skipping the RFP, and start contacting the three or four short-listed vendors that you feel may have the best solution for your needs (based on your research). Your goal is to determine their willingness to conduct a scripted demonstration (versus a canned sales demo). This requires the vendor to “script” (prepare with detail) the demo according to your specific needs and scenarios.

Once you have the vendors' commitments, you can then send them a detailed RFI, and schedule the scripted demos. By skipping the RFP process, you can reduce the project timeline by as much as a month.

Preparation: First Things First

So … you're either in the market for your company's first human resources management system (HRMS), or you're ready to move up to a more sophisticated system, and you're struggling with whether to bring in the consultants or tackle the evaluation process by yourself. Can you do it yourself? The answer is yes, and maybe. It all depends on whether or not you can commit the time and resources to doing it right.

Be prepared for a fairly time-consuming process, ranging from at least three to nine months or more. You'll also need to recognize that it will require a considerable outlay of capital and staff resources to bring the project to fruition. Your company will have to live with your decision for the next eight to ten years or more, so you want to make sure that you do it right—the first time.

For starters, it will be extremely helpful to begin with a clean slate and an open mind. The less biased you are regarding a specific software vendor or application (either “for” or “against”), the easier it will be to make an objective evaluation and decision. In the last five years or so, vendors, software applications, and hosting options have undergone significant changes. Making a decision based solely on past experiences (good or bad) may be a disservice to your organization. Try to remain unbiased throughout the evaluation process. Whether you use a consulting firm to help you in your quest, or decide to strike out on your own, following a rock-solid methodology is the key to success.

User-Needs Assessment

The process begins with a user-needs assessment (UNA) to develop a wish list of features and functionality you expect the new system to deliver. In this phase, brainstorming sessions with each group of functional and technical users are scheduled to discover what they like about the current system, what they dislike about the current system, and what they are looking for in a new system.

There are various ways to build this information. Some people use questionnaires and surveys to collect this information, and some use the tools that software evaluation companies like Technology Evaluation Centers (TEC) offers to help organizations build their requirements. In addition to these tools, the interactive nature of face-to-face meetings with small groups of users allows useful information to be exchanged to help the decision process along. Some users may know exactly what they want out of a new system, while others may have difficulty envisioning their future needs. You'll have to facilitate the discussions and prod the users by asking such questions as “What are you doing manually today that would save you time if it were automated?”

While you're conducting these sessions, be sure to ask how new features and functionality will affect efficiency and productivity. This information will help you later when you prepare a cost-benefit analysis to justify the expense of the new software.

Next, take a look at some of the software vendors present in the marketplace. In the mid-market, there are no less than 20 vendors that could be considered “players” (prominent in the industry), and there are many more that are trying to enter this market. There is no way that you can evaluate all of them in depth, but there are some shortcuts that you can use to narrow down the choices.
One option available is to see what the analysts have to say about the major players in the HRMS software arena. Gartner's Magic Quadrant for HRMS, Forrester's Wave, or TEC's eBestMatch™ are all effective decision support systems offered by software evaluation organizations that can help you evaluate different vendors.

Another option is to attend conferences, such as those held by the Society for Human Resource Management (SHRM) and the International Association for Human Resource Information Management (IHRIM). These conferences usually have an exhibit hall, and the major HRMS vendors will each have a booth and product specialists on hand to discuss their offerings and to provide demos of their solutions. Often they will arrange a vendor shoot-out, where each vendor demos its solution to the assembled attendees, and the attendees decide for themselves which offers the best solution.

You can also use the Internet to research the vendors, but beware: this could turn out to be the equivalent of looking for a needle in a haystack. On the day I wrote this article, I did an Internet search on “HRMS software vendors,” and it returned 728,000 hits. You are going to either have to narrow your search, or be prepared to do a lot of surfing.

One other way is to do some sleuthing and try to find out what your competition is using. There are several vendors that have carved out a niche in the marketplace, and that have specialized solutions tailored to specific market verticals (such as health care, professional services, manufacturing, etc.)—a case of “birds of a feather …” This research should allow you to narrow your choices down to a handful of promising vendors. Call each one to request a copy of its company's current product information, and see if it has an online demo to provide a high-level familiarity of its products. This should help you come up with a shortlist of perhaps three or four prospective vendors.

Top 5 Trends in HR Technology

Over the last decade, the face of human resources (HR) has changed dramatically. What was once a seemingly low-priority department has now become an integral part the organization—and its bottom line. Today, HR is all about the understanding that maintaining a positive and productive work environment is good for business.

Accomplishing this more-than-ideal scenario can seem difficult because many organizations don't understand what is required. So, how can today's businesses manage this change? Simple: by adopting HR best practices and leveraging HR technology.

Recession or not, innovation in HR technology continues to grow and to alter the way in which people work. This technology impacts all of us—in both our personal lives and in the workplace. It's important that we continue to embrace technology in order to have the tools that will help create better communication and collaboration within our grasp. Technology (e.g., social networking, mobile phones, etc.) helps people connect within their work environments and fuels the potential for increased productivity and creativity.

But no matter what the current trends are, the most important point remains: organizations need to keep both their current and future workforce requirements in mind before turning to a new solution.

As we approach a new decade, here are five of the top trends that I believe are making the biggest impact in the HR arena.

* talent management
* social networking
* outsourcing
* software as a service (SaaS)
* mergers and acquisitions (M&As)

1. Talent Management
Talent management adds to the core HR mix, providing a combination of recruitment, performance and compensation management, succession planning, and more. As such, the enterprise software industry has seen a drastic increase in vendor offerings—as well as the types of vendors who are selling them.

This year's 12th Annual HR Technology Conference & Exposition in Chicago, Illinois (US) was proof that talent management is alive and well, and making an impact on the way organizations do business. Today, both talent management and employee development are critical in determining an organization's performance potential. But it's the ability to manage performance that often sets organizations apart—and the primary differentiator between an organization that produces so-so results and one that exceeds their expectations.

Talent management is a strategy that combines core HR functions such as, personnel administration, payroll, and benefits with acquisition, development, and performance. These solutions provide a comprehensive suite of tools that helps organizations take a more strategic approach to the way they select, manage, and retain their employees.

The vendors that offer talent management solutions today are an extremely diverse bunch. This can make it difficult for HR decision makers to determine which solutions can truly satisfy all their needs. The decision makers need to decide which solution is better for their organization by determining whether or not to purchase an out-of-the-box HR solution, an learning management system (LMS) solution that fits nicely with their current core HR system, or an enterprise resource planning (ERP) system that can replace many of its separate solutions. The combination of systems available is endless.

The five main types of talent management offerings include

* traditional HR vendors that have added talent management functionality to their core HR applications;
* ERP vendors that have developed talent management add-ons to their core product(s);
* LMS vendors that blend learning with talent management;
* niche players that focus on one particular area of the talent management spectrum (e.g., applicant tracking, recruitment, workforce management, performance management, etc.); and
* talent management software vendors that focus solely on the four pillars of talent management (recruiting, performance management, learning management, and compensation management).