Employee Experience: Come the Recession, Will Anyone Care?

At this year’s SuccessConnect, SuccessFactors CEO Greg Tomb said the time’s come to stop talking about “Human Capital Management” and start focusing on “Human Experience Management.” With that, he summed up what everyone in HR technology has been thinking for the past two years.

Just as retailers, hoteliers and restaurateurs discovered years ago that customers put as much value on ambience and service as they do on food—really, who goes to Hooters for the Twisted Texas Melt?—sometime around 2017 employers figured out they have to compete on more than salary and benefits when the labor market turns against them.

(Of course, it’s not like employers had tried very hard to compete on wages. Only late last year did pay rise above the 3 percent mark despite years of CEOs complaining about a lack of talent.)

Besides that, a variety of research has shown that engaged employees are more productive and profitable than those who are disengaged, and that ultimately their level of engagement depends on their daily experience at work. Every conversation with a manager, every time-off request they file, even the simplicity of clocking in or out contributes to the strength or weakness of the employee’s experience.

So it makes perfect sense for HCM vendors to focus their product development, marketing and support efforts on the customer and end-user experience. At SuccessConnect, SAP showed off an impressive conversational interface that greatly simplifies SuccessFactors’ use. Oracle has aggressively integrated natural language processing into its products. Meanwhile, an entire sub-industry has sprung up to measure workforce sentiment and advise corporate leadership on how to improve engagement.

Tomb said the focus on experience was inevitable—and is permanent. For evidence, he cites the Business Roundtable’s declaration that corporations should no longer focus on shareholders first. Instead, they should “share a fundamental commitment to all of our stakeholders.” That includes shareholders, yes, but also customers, employees, suppliers and communities. On top of that, Tomb argues that the roots of change—in terms of social mores, business and technology use—have grown too deep for either employers or vendors to reverse course.

Maybe he’s right, but I can’t help thinking about why “Human Capital Management” gained traction in the first place. In my mind, it was a result of HR’s ongoing attempt to develop a new roadmap for itself, to earn—to use the well-worn phrase—“a seat at the table.” But just because an organization talks about “HCM” instead of “HR” doesn’t mean it’s actually evolved the function.

Whether a company’s approach to workforce management is progressive or regressive, talking about Human Capital is a nifty way for HR to get itself taken seriously by senior leadership. See? We understand business, too! “Human capital” concedes that the workforce is an expenditure as much as a resource.

And let’s admit it: When it comes to workers, the language of corporate finance includes a lot of doublespeak. When employers speak of “increased productivity,” they mean squeezing more hours of work from individual employees. When they talk about “efficiency,” they’re describing higher margins achieved with lower headcount. And there’s a special place in Hell for whoever coined the term “rightsizing” to describe putting scads of people out of work.

The labor market is about supply and demand but despite the talent shortage, employers have acted a tad strangely for marketplace participants. Yes, real wages have begun to rise but most recruitment pitches emphasize culture, flexibility, opportunity and meaningful work. For most workers, retirement still comes with much uncertainty, with most people left to their own devices when it comes to money management. (Sorry, but “financial wellness programs” aren’t the same things as “pensions.”). And employers have discovered offering “unlimited vacation” typically results in less time off being taken.

But back to experience: While it’s true that today’s workers expect their tools at work to be as slick as their toys at home, it’s difficult to believe the idea of experience is going to carry so much weight when the economy turns. Today, we see studies that say many workers would change jobs if their employer provided them with sub-par technology. But how many of them are going to make a jump when the unemployment rate starts moving back to recession-era levels?

Ease of use, flexibility, speed and AI-supported decision-making are all important things. They contribute to the employee experience, and they also enhance efficiency. When business conditions get tough, which do you think will be more important to most companies?

We’re starting to see signs of a recession coming. When it does, I’m betting we’ll stop talking about “Human Experience Management” and start talking about “Human Efficiency Management.” When that happens, HCM tech vendors may not have to change their products very much, but their marketing campaigns will surely need a fresh coat of paint.

Mark Feffer is editor of the HCM Technology Report