Mastering change management through HCM transformation

In today’s rapidly evolving business landscape, HR, HCM and payroll transformations are no longer optional, rather they’re essential for staying competitive. While they offer undeniable benefits and value, these transformations can be daunting and complex.

It’s no surprise, then, that Strada’s latest research report, Unlocking value with HCM transformation: Insights on AI, value realization and growth, reveals that 100% of companies surveyed enlisted the expertise of an implementation partner to support their HCM transformation efforts.

Are HCM transformation implementation partners measuring up?

The good news is that, according to our study, the majority of companies rate their implementation partners as ‘strong,’ with 61% reporting they are ‘satisfied’ or ‘very satisfied’ with their partners’ performance. Partners even exceeded expectations in areas such as technical expertise, customization, and project management.

However, nearly a quarter of the organizations surveyed (around 24%) felt their partner fell short in change management.

With the rapid advancement of HCM and payroll technologies, it’s understandable that many employees might feel intimidated and resistant to the changes these transformations bring. Even those who embrace the latest innovations may face a skills gap that complicates the adoption process.

Below, we´ll explore the root causes of change management challenges and provide strategies to ease employees' adoption and engagement with new systems and processes.

Barriers to successful adoption

All organizations and implementation partners will encounter some degree of difficulty during the adoption process. The important thing to recognize is that these challenges often stem from deeper issues beyond employee fears and frustrations.

Our report, "Unlocking Value with HCM Transformation", highlights the following key factors:

Lack of a structured change plan

Employees often struggle to adopt new systems because they were not provided with a clear roadmap. A tendency to focus on system configuration without a well-communicated change plan can lead to confusion and frustration.

Lack of early engagement

Sudden shifts from legacy processes can often leave employees feeling excluded and unprepared. Early engagement is crucial to make them comfortable with the changes.

Limited executive alignment

Without strong sponsorship from executive leadership, HR teams may feel uncertain about how to drive change effectively, leading to doubts and confusion among employees.

Weak post-go-live support

While it’s easy for implementation teams to focus their energies on preparing for go-live, long-term coaching, performance tracking and process optimization are essential for a smooth and successful adoption. 

By understanding these root causes, organizations and their implementation partners are better able to develop effective solutions to circumvent many of the difficulties they face during the adoption process.

A new challenge: Bridging the AI skills gap

The advent of AI and machine learning (ML) has introduced a wealth of benefits and possibilities to HR and payroll technology. New advances in automation, integration and data insights have the potential to dramatically improve the employee experience by alleviating many laborious and repetitive tasks.

However, this rapid technological progress has also created significant challenges. Innovations have progressed at an accelerated pace, leaving many organizations and their employees struggling to catch up.

Traditional training and workshop programs offered by vendors or implementation partners may no longer suffice in preparing employees to effectively use these new technologies. A focus on system navigation over real-world use cases can leave employees feeling unprepared.

As AI and ML technologies continue to evolve and expand their capabilities, it is crucial for organizations to address this skills gap. Ensuring that employees have the necessary skills to leverage these technologies effectively is essential for maximizing their potential benefits.

Overcoming HCM transformation challenges

Navigating the complexities of transformation can be daunting, but there are effective strategies to ensure successful adoption. Strada’s Unlocking Value with HCM Transformation highlights the following approaches:

Develop tailored change strategies

Employees will be more receptive to change when provided with structured frameworks that prepare, engage and guide them through the transformation process.

Strengthen communication & engagement 

Clear communication that emphasizes the benefits of transformation can help reduce resistance and encourage buy-in. 

Secure executive sponsorship 

Strong endorsement from executive leadership can inspire employee confidence in the transformation’s success, driving alignment and  long-term ownership. 

Extend post-deployment support 

Ensure the success of your transformation goes beyond go-live by providing post-deployment support, such as structured adoption tracking, workflow enhancements, and continuous optimization which can help employees adapt to new systems. 

Redefine training approaches

New technologies demand new skill sets. Ensure your workforce is ready for the innovations and advances that transformation will bring by offering hands-on, role-based training that helps employees apply new processes in real scenarios. 

While a range of technical skills may be required depending on your transformation plan, our report identifies three key areas organizations should focus on:

• Data and analytical skills to help employees make sense of the data and uncover key trends and relationships between different variables.
• Technical and data management skills to equip employees to manage database systems, ensure data security and extract data for various tasks.
• Problem-solving and critical thinking skills to enable employees to apply what they’ve learned to real-world business problems.

The future of change management and HCM transformation

While businesses engaged in HR and payroll transformations often prioritize selecting the right technology, it is equally crucial to ensure that technology is adopted by an informed, prepared and fully engaged workforce. Without proper change management, adoption rates suffer, leading to confusion and underutilization that can undermine the success of the entire transformation.

To drive value and achieve the best ROI, implementation partners must collaborate with their clients to prioritize adoption. This involves providing clear roadmaps, effective communication and comprehensive training to employees. By ensuring that employees are engaged and informed, businesses can accelerate adoption and guarantee the success of their transformation efforts.