Open letter to all HR software vendors

HR products haven’t really evolved much the last decade. Sure, many have changed their business and delivery models to become SaaS (software as a service) vendors but the functionality is still little changed from the 1990s.

HR products haven’t really evolved much the last decade. Sure, many have changed their business and delivery models to become SaaS (software as a service) vendors but the functionality is still little changed from the 1990s. Yes, I know that talent management has seen some changes over the last few years but, honestly, are concepts like 360-degree evaluations and tying compensation to performance all that new? No.

Today, I will get a call from a dear friend who I’ve had the pleasure of working with for approximately 10 years in two different firms. About 10 years ago, she went to work with a firm closer to where she lives. The commute was great but the workforce, pay and management weren’t. She then left to join another firm but will likely tell me today that she is leaving them. Why? Gross mismanagement from the top.

I know from whence she speaks as I have toiled under inept, corrupt, morally bankrupt and vile bosses. I have seen what bad bosses do to organizations and the people who work (or worked) for them. I’ve seen them fire great people to make room for their toadies or people who won’t become a threat to their position. I’ve seen bosses with an air of superiority so bad that they wouldn’t dare think of listening to a mere commoner like me or others.

Did you know that close to 85% of the time that people leave one employer for another is because of their boss? I can believe it. And yet, amazingly, human resources (HR) software vendors don’t do anything to detect bad bosses. Seriously, how can you have a talent management product if you can’t even detect which of the managers or executives are causing large numbers of people to leave?

Now before every HR vendor out there flames me, let’s establish some basic tenets. Yes, many HR systems and firms support exit interviews. It is in these interviews that employees are supposed to tell an HR person why they are leaving. Do you really think they’ll cop to “My boss is a demeaning, narcissistic twit who verbally abuses everyone and makes our lives a living hell”. No – they’ll give some passable statement like needing to make a quality of life change. That way they’ll still have some chance of getting a neutral or positive reference from this soon to be former employer.

Many HR software products also support 360-degree feedback. This allows workers to provide upward feedback to their bosses. Well, this may be a shock to HR software developers but the average employee knows their responses to this evaluation will not be kept confidential and private. If these employees ever did spill the beans about a bad or dysfunctional boss, repercussions would likely follow but unfortunately they’d likely clobber the employee not the boss/manager. Even when bad bosses do get some tough feedback, research indicates that the narcissistic tendencies in these folks ensures that they will not change.

Third, HR products often possess analytic modules today. HR vendors will contend that these solutions can report which boss has higher than normal attrition. Well, isn’t that a great help! This tool causes firms to lose a lot of great talent until enough people (a statistically significant quantity) have left so that a monthly or quarterly report shows that there is a problem. This is such a waste of analytic (and executive) time as a great analytic tool should be predicting which managers may need an intervention before the attrition goes off the charts. Instead, the current analytic tools wait until the problem is really bad before the software reacts to the problem. Businesses need analytics with foresight not hindsight.

Here’s what an analytic application should do. First, HR vendors must learn to use something else besides just transaction data. They need to ask questions of executives to learn how they detect a bad management situation. They would learn about ‘proxies’ or ‘clues’ that something is amiss. They would then build an analytic application that scans all employees, all managers and all departments to see:

- which departments are experiencing higher than average transfer-out requests - which departments are experiencing higher than average sick time - which departments have personnel cashing in all of their stock options - which departments are seeing their average personnel evaluation scores dropping - which departments have a higher than average vacation time usage rate - etc.

When a single department is leading many of these indicators, these are ‘early warning’ indicators that a bad, dysfunctional, ineffective, toxic or pathologically flawed manager is in charge.

Top executives want to know who is driving off their best talent. AND THEY WANT TO KNOW ASAP! But, do HR products do this? No way. Should they? You bet.

So will you, HR vendors, create these predictive (not historical), analytical tools? Will you help businesses identify and purge themselves of the narcissists, egomaniacs, paranoids, bullies and other managerial misfits that hurt your customer's profitability, efficiencies and effectiveness?

The current crop of HR products was apparently designed to manage workers but not managers. These technologies are embarrassingly light when it comes to putting appropriate focus on middle and top management. It’s almost as if these vendors don’t want to upset those who might authorize the purchase of their products. In my conversations with HR executives, many of them are frightened to confront bad managers. Giving them the real insights into their business and its management might embolden HR professionals to rid their firms of bad managers/executives.

HR software vendors seem too content to stay in the HR transaction processing sandbox. Analytic thinking is not about presenting transactional data in new, pretty formats. Yes, it’s nice that a vendor can show a graphical correlation between performance reviews and compensation. But, that correlation isn’t exactly innovation. An innovative idea would be to look at non-transactional matters and create a new way to study, analyze and resolve those issues. So far, HR analytics have come up way short on the truly innovative scale.

I started this blog because of my frustration with HR vendors and their inability to spot bad bosses. My last word on that matter is that while you can’t legislate integrity, you can get rid of those who lack it. HR executives need better analytics and HR vendors should be creating the innovations in this area to enable them.