Of all the pressures that contemporary HCM practitioners face, finding and keeping quality talent ranks above everything else. In order to attract and retain talent, Best-in-Class organizations focus on optimizing the employee experience. This Research Report explores how electronic signature solutions and other technologies can improve that experience throughout the employee journey.

MODERNIZING HCM: WHY THE DIGITAL EMPLOYMENT EXPERIENCE MATTERS January 2016 Peter Ostrow, VP/Research Group Director, Customer Management, Sales Effectiveness Howard Adamsky, Senior Research Analyst, Human Capital Management

Report Highlights

Best-in-Class HR departments are 62% more likely than Laggards to invest in employee-friendly technologies.

Competition for talent is the #1 pressure faced by today’s HCM teams (by a 69% margin!).

HR organizations using an electronic signature solution report a 28% higher level of employee engagement.

E-signature users integrate four major HRIS applications more effectively than non-adopters.

P2 P4 P5 P9

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The authors of this report are old enough to remember when one could recognize the handwriting of their workplace colleagues. While this admittedly is no longer a valuable skill, it does illustrate the enormous change that ubiquitous digital technology has brought to every facet of our work lives. Why, then, are many human resource (HR) departments still printing, signing, scanning, and snail-mailing crucial employee-centric documents? What does it say about an organization’s dedication to progressive growth when it recruits, on-boards, enrolls, and communicates with employees in a distinctly 20th century style?

Embracing HCM Automation for the Right Reasons

The automation of processes with the aid of digital, mobile, and social applications in both consumer and business environments is not yet total, and need not become so, especially in the Human Capital Management (HCM) space, where the personal touch remains so important. After all, there’s a reason why it’s still called human capital management. Nevertheless, the efficiencies of automation in the workplace cannot be denied, and Aberdeen’s significant HCM research library continues to prove the competitive necessity of digitizing the vast majority of what a generation ago were perfectly acceptable, paper-based processes.

New Aberdeen research data showcases that Best-in-Class HCM teams (see sidebar, page 3, for definitions) more aggressively embrace automation within their line of business. Indeed, when we look at a comprehensive list of 21 human resource processes – from applicant tracking and benefits enrollment through succession planning and time-and-attendance management – we see that top performers reported “full automation” of 34% of these tools, compared with 32% among Industry Average

Why are HR departments still printing, signing, scanning, and snail-mailing crucial employee-centric documents?

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organizations, and only 21% within Laggard firms. The fact that the Best-in-Class are 62% more likely than the worst performers to have already achieved this level of technology enablement provides a valid rationale to pursue how electronic signature solutions (e-signature) can create better HCM results. Here is what the data reveals: 39% of the Best-in-Class report that “electronic signatures on employee and HR-related forms are captured digitally,” versus 37% and 17% respectively among the Industry Average and Laggards. In other words, while eSignature is still in the early-adopter phase within the HR function, more than a third of companies across the board see the value in it.

Think Sales is Competitive? Try Working in HR

In order to gain a better understanding of the most significant pressures business leaders face on a day-to-day basis, Aberdeen’s research surveys often begin by asking respondents, “What’s keeping you up at night?” As we see in Figure 1, nearly three-quarters of HR professionals identify talent shortages due to global competition as their prime concern.

Figure I: Top Pressures Facing Modern HR Practitioners

The Aberdeen 2015 HR Trends Best-in-Class Defined In June through August 2015, Aberdeen surveyed 247 end-user organizations to understand their Human Capital Management best practices. The performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these HR teams are: • 87% of employees rated as “highly engaged,” vs. 59% among Industry Average and 30% for Laggard firms • 30.3% average year-over-year improvement in customer satisfaction, vs. 5.9% for the Industry Average and a 2.0% decline among Laggard respondents • 10.0% average year-over-year improvement (reduction) in employee turnover, vs. 0.6% and 4.4% worsening of (growth in) turnover, respectively, for Industry Average and Laggard

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To address this pressure, we can see how companies might turn to e-signature solutions when trying to answer the question, “How can I streamline my talent acquisition process, for example, obtaining an accepted offer letter as quickly as possible?” Furthermore, seeking a digital solution in this case makes sense insofar as all of the other pressures cited can be addressed with the appropriate technology.

Aside from the efficiencies afforded by enabling technologies, they also help create a positive, digital employment experience, a necessity in this competitive sourcing and HR management environment. For example, it is crucial for effective hiring practices that an employer seeking to woo Millennial candidates appear as a leading-edge, progressive organization We also know from Young & Talented but Lazy? Not So Fast, Millennials are the Real Deal! (February 2015) that Best-in-Class HCM practitioners are far more adept at finding and keeping quality employees who belong to this cohort.

This is where e-signature solutions can not only play a role in making the hiring organization attractive, but also save time for all involved parties by reducing the menial acts associated with traditional paper, ink, and fax machines. From hiring and onboarding activities, through to learning, development, and even off-boarding needs, the minutes saved here can turn into hours, and eventually result in the cost savings that modern HR practitioners clearly consider atop business pressures. The second end-user concern from Figure 1 – visibility into HCM data – is also well-served by such platforms, as the ease of tracking documentation throughout the employee lifecycle is amplified when “finding the file” means searching through database, as opposed to physically walking to a manila-folder-filled records room.

Someone has to create, support, and terminate the digital footprint (email, security, HR applications) of employees, so it behooves the forward-thinking enterprise to automate the predictable flow of data between the HCM and IT departments.

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It should also be noted that in addition to cost, data, and time, a fourth important tenet of modern HCM management revolves around compliance. While “adherence to federal, state, and local regulations and compliance requirements” only clocked in at 16% popularity among survey respondents selecting their top-three pressures, the proactive value of collecting, storing, and accessing electronically signed employment documents is quite evident for enterprises smart enough to protect themselves against future legal issues. We will address compliance again below, but it is worth noting that e-signature solutions can help even here.

E-signature: What Does it Mean for HCM?

Meanwhile, let’s take a deeper dive into the research data, and segment out the 31% of HR organizations that have already deployed e-signature in order to compare them with non-users. We begin by noting in Table 1 that a series of crucial HCM key performance indicators (KPIs) reveal a correlation with using these solutions:

Table 1: Improved Performance Associated with eSignature Deployments

n= 247; Source: Aberdeen Group, December 2015

HCM metric eSignature users Non-users Percent of highly engaged employees 68% 53% Turnover rate among high performers/high potentials 13.9% 15.3% Year-over-year change in revenue per FTE 5.9% 3.9% Year-over-year change in customer retention 3.6% -0.4% Year-over-year change in voluntary turnover 0.3% 0.8%

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If we remember the key business pressures from Figure 1 above – competition for talent, stresses about managing data, and controlling costs – then the advantages of lower turnover, higher employee engagement, more efficient revenue creation, and, of course, customer satisfaction, need no explanation. A modern HR organization neglecting to leverage every opportunity to improve these metrics is not serving their enterprise very well, and may as a result experience a more personal kind of turnover, if you get our drift.

Paying attention to what matters in HR means ensuring that beyond the daily grind of resumé tracking, benefits forms, and in-house learning, HCM leaders are wise enough to create more visionary, management-by-objective (MBO), high-level goals for their team. As we see in Figure 2 below, e-signature users today are more focused on these necessities than non-adopters, as indicated by the percentage of each cohort that indicates a high or very high level of current attention paid to these 30,000-foot strategies:

Figure 2: What Should a Successful HR Organization Pursue in 2016?

It is crucial for effective hiring practices that an employer seeking to woo Millennial candidates appear as a leading-edge, progressive organization.

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Indeed, the Best-in-Class lead All Others in the same survey response pattern – indicating a 4 or 5 on a 1-5 scale of importance – around all of the items in Figure 2, telling us that both top-performing HR teams, as well as the more successful ones utilizing e-signature, are emphasizing these priorities and deploying e-signature solutions in part to more efficiently achieve them. For example, much as Best-in-Class HR teams are 72% more effective than All Others (50% vs. 29%) at complying with legal regulations, we see e-signature-enabled firms also more adept at mitigating corporate risk. This stems directly from the fact that permanent, digital records around document delivery and receipt are more reliable, available, and legally binding than the ink-and-paper trails of old.

Technologies are Great…If We’re Ready to Leverage Them

Simply purchasing an electronic signature solution for an HR team, however, is not necessarily going to instantly mitigate all the business pressures defined in Figure 1 above. Aberdeen’s research methodology emphasizes the need for organizations to ensure that before deploying automation solutions, they are optimally positioned to leverage the benefits of such technologies. For example, Best-in-Class firms are 15% more likely than All Others (61% vs. 53%) to hard-wire their Human Resources Information Systems (HRIS) data to the IT department, in order to provide more efficient onboarding and off-boarding transactions. In Figure 3, we see a much larger delta (42% = 68% vs. 48%) between adopters and non-users of e-signature when it comes to a host of competencies that make the deployment of an electronic signature solution more effective:

The ease of tracking documentation throughout the employee lifecycle is amplified

when “finding the file” means searching through database, as

opposed to physically walking to a manila-folder-filled records room.

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Figure 3: Best-in-Class Processes Supporting eSignature Deployments

These processes represent an interesting take on 21st century enterprise IT support. While most line-of-business (LOB) leaders such as Sales, Marketing, and HR have heavily gravitated toward deploying self-service, cloud-based technology enablers that require little or no IT involvement, this does not mean that the IT folks can’t add additional value. In the case of HR, after all, someone has to create, support, and terminate the digital footprint (email, security, HR applications, etc.) of employees, so it behooves the forward-thinking enterprise to automate the predictable flow of data between departments.

An additional core competency related to enterprise efficiency that Aberdeen studies is knowledge management: The way top-performing organizations effectively collect, store, and distribute vital data and learnings. For starters, Best-in-Class firms average a 30% higher adoption rate than All Others around the three capabilities summarized in Figure 4, which also reveals significant adoption deltas when comparing users against non-users of e-signature tools:

Aberdeen’s research methodology emphasizes the need for organizations to ensure that before deploying automation solutions, they are optimally positioned to leverage the benefits of such technologies

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Figure 4: Managing Tribal Knowledge: Digital Beats Paper

Figure 4 also demonstrates the importance that leading organizations put on providing staff quick access to data and information. If you believe that bringing a knife to a gunfight is a bad idea (it is), it seems obvious that the stakes and speed of 21st century HR practices have been raised; the need for immediate access to data of all kinds simply begs for digitally deployed solutions.

What’s in YOUR Technology Mix?

The enterprise HCM function is tasked with eliciting peak productivity from employees and retaining top employees for the longest possible timeframe. Aberdeen’s data demonstrates (Figure 5) that e-signature users deploy a host of additional technology enablers more aggressively than non-adopters, thus creating a more holistic HRIS ecosystem. These enablers cover a number of HCM needs.

Performance management solutions, which are critical for the capture of objective data about employees’

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accomplishments vis-à-vis expectations, particularly for medium-sized and large organizations, and which also help HR management scale a fact-based understanding of their team members’ strengths and weaknesses.

Figure 5: How eSignature Supports the Overall HCM Technology Ecosystem

Best-in-Class HR practices are 54% more likely than under-performers (63% vs. 41%) to deploy automated benefits enrollment solutions, understanding that a seamless employee experience, particularly at the onboarding inflection point, is crucial to both corporate efficiency and in gaining the respect of the workforce. E-signature-enabled organizations integrate the two solutions to complete the circle of productivity.

When it comes to defining and tracking OKRs (objectives and key results) for any particular employee, the utilization of goal management tools reveals a 47% popularity rate among all survey respondents, but a significantly higher rate among e-signature users. This is due to the general understanding in HR management circles that if something is written down, it carries more

E-signature users also deploy a host of additional technology enablers more aggressively than non-adopters, creating as a result a more holistic HRIS ecosystem to help digitize even more of the employee lifecycle.

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weight and formality. After all, it’s easier to ask for a raise – or deny one – if tangible objectives and accomplishments can be tracked by all parties involved in an employer/employee relationship. In a work culture attuned to digital communications, e-signing a quarterly review or personal improvement plan becomes a natural, baked-in expectation of formalized talent management conversations.

The same logic applies to the use of compensation management applications. How many times has a new manager been faced with an employee claiming that the manager’s predecessor promised them a raise, and yet no documentation exists to support their assertion? This is a lose-lose situation that can be avoided within an employment culture focused on proper digital documentation of all HR-related conversations and milestones. When staff are in the habit of receiving and providing digital communications, knowing that the enterprise is documenting everything – good and bad – the chance that awkward, counter-productive scenarios can be reduced.

Conclusion and Recommendations

In the end, deploying electronic signatures seems like a relatively simple value proposition: reduce paper, capture everything digitally, and make life for all parties that much more streamlined. And yet, as we know from five years of Aberdeen’s Sales Effectiveness research, business adoption of such tools remains below the one-third range in overall popularity. Why is

Within a work culture attuned to digital communications, e-signing a quarterly review or personal improvement plan

becomes a natural, baked-in expectation of formalized talent

management conversations.

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this? Some industries, particularly heavily regulated sectors such as finance and healthcare, tend to be risk-averse regarding security concerns and privacy fears. Indeed, in a pending study from this research group, only 4% of financial services firms report e-signature deployments.

Figure 6: Top HCM Competencies Map to the Digital Employment Experience

That being said, there’s a reason why Best-in-Class firms in multiple disciplines – sales, HCM, etc. – are leading under-performers with investments in these tools: line-of-business culpability for peak performance. When e-signature solution providers are able to put security concerns to rest – indeed, many of them employ “Chief Privacy Officers” specifically to help customers understand how paperless transactions are no less secure than traditional – their cloud-based offerings represent a wide variety of productivity advantages, as evidenced above.

When it comes to the HR line-of-business in particular, such productivity is no longer a luxury. As we see in Figure 6, being adept at a wide variety of crucial HCM competencies –

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competencies that pervade the entire employment lifecycle – are rendered more attainable when e-signature tools and workstyles are introduced into the equation. Concerns over privacy and security cannot be overlooked by companies curious about implementing e-signature solutions, but if and when such issues are put to bed, the overall competency of HR leadership is clearly more likely to look like a winner to senior management.

For more information on this or other research topics, please visit www.aberdeen.com.

Related Research

Benefits to E-signature Users are Vast and Varied; October 2015 Leveraging E-Signature in Your Contracts: Best-in-Class Advantage; May 2015 e-Signature for Sales: Five Best Practices You Need to Adopt; March 2015

CRM + eSignature: Digitizing the Sales Handshake; March 2015 Case-in-Point: Western Union Scales Up With eSignature and Sales Contracting; February 2015 Signed, Sealed, Delivered: Integrating e-Signature into the B2B Sales Cycle; August 2014

Authors: Peter Ostrow, VP/Research Group Director; Customer Management, Sales Effectiveness; peter.ostrow@aberdeen.com Howard Adamsky, Senior Research Analyst, Human Capital Management; howard.adamsky@aberdeen.com

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About Aberdeen Group

Since 1988, Aberdeen Group has published research that helps businesses worldwide improve their performance. Our analysts derive fact-based, vendor-agnostic insights from a proprietary analytical framework, which identifies Best-in-Class organizations from primary research conducted with industry practitioners. The resulting research content is used by hundreds of thousands of business professionals to drive smarter decision-making and improve business strategy. Aberdeen Group is headquartered in Boston, MA.

This document is the result of primary research performed by Aberdeen Group and represents the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group.

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