SAP : Welcome to the Age of Human Experience Management

When the Business Roundtable came together in August 2019, they decided It was time to shift the purpose of a corporation from solely profits and shareholders to a focus on people, specifically on a company's employees and customers.

By all accounts, this new definition more accurately describes how best-run companies operate today: by investing in their workforce and putting people at the center of business. This is a powerful new declaration and one that is long overdue.

In recent years, human resources (HR) and business leaders have been actively dedicating time and resources to improving the people experience and developing the right culture to engage, motivate, and inspire their workforce. The term 'experience economy' is not new, and organizations know that optimizing the people experience is key to business success.

In fact, according to a recent Gallup study, companies that focus on employee engagement realize 17 percent higher productivity, three times more revenue per employee, and 40 percent less turnover. Yet many organizations continue to fall short when it comes to meeting employee expectations.

Employee Experience Gap

The reality is that even though organizations place great focus on experience today, in many cases they are not equipped to properly address it. In Deloitte's 2019 report on human capital trends, 84 percent of leaders point to employee experience as a top priority. But only nine percent believe they are ready to address the issue.

Meanwhile, there is a significant gap between what leaders think is happening and what is actually taking place. According to salary.com, 69 percent of CEOs believe they are delivering a superior employee experience. But a Gallup study found that employee engagement remains at just 34 percent. This is a huge gap - what we call the experience gap. Every day, they are happening across our organizations and we see the impact: low employee morale, poor collaboration, failure to innovate, employee attrition.

We all know the ideal experience we want to give to employees. The question is why can't we seem to get it right?

Power of Knowing the What and the Why

While most organizations have more data than ever to help identify and solve problems, HR and business leaders continue to be surprised by experience gaps in their workforce. The answer is not more data, it's actually about a different kind of data. And it is what you do with it that makes all the difference.

There are two types that organizations often keep in silo: operational data (O-data) and experience data (X-data).

O-data is rich, transactional HR data such as how many employees are leaving the organization, how many candidates accept offers, or what percent of training is completed. It is very powerful in that it tells you what is happening in your organization.

X-data, on the other hand, is fundamentally different. It's the human factor data, or the beliefs, emotions, and intentions that tell you why, for example, employees are leaving the organization or why candidates are rejecting offers.

Organizations cannot change the employee experience until they marry O-data and X-data to truly understand the what and the why. This is the real power of combining SAP SuccessFactors solution and Experience Management solutions from SAP (Qualtrics). Capturing the employee voice and understanding where the experience gaps exist provide a baseline for HR to begin making improvements.

Evolution of HCM

This focus on experience is a significant change in how we have traditionally approached the use of HR technologies, which is why we believe we're on the forefront of the largest shift in our industry.

It is the type of shift that gets 200 CEOs together to revise the purpose of a corporation. It is also the kind where organizations across industries and geographies are raising people to a board-level priority and leveraging intelligent technologies in ways that position HR as a strategic growth driver like never before.

Human capital management (HCM) as we know it today is no longer sufficient on its own to meet employee expectations. Just like the Business Roundtable's new statement on the purpose of a corporation, we are also now redefining the purpose of our field to put employee experience at the center of HR and business today.

Now is the time to evolve HCM to HXM, human experience management.

Introducing HXM

This new strategic intent means we will stop defining our people as interchangeable assets. Instead, we must care as much - or more - about our employees as we do our customers. HXM pushes HR processes and decisions to go beyond simply facilitating transactions to truly reinventing employee experiences in ways that accelerate business growth.

HXM is not about making incremental improvements; it is about redefining HR technology as we know it and going beyond the limits of traditional HCM platforms.

At SAP, this means redesigning experiences with the end user in mind across the entire HR ecosystem. In other words, creating experiences that allow candidates, new hires, recruiters, employees, managers, and HR leaders to do things more quickly and easily so they can be more productive - from recruitment to learning to retirement. It means helping employees take advantage of artificial intelligence-based chatbots and machine learning-based recommendations to provide suggestions, insights, and nudges that guide the right decision and actions, and help ensure personalized experiences.

It also means providing the tools businesses need to continuously listen to their workforce and understand where there are gaps so they can improve experiences for both individuals and teams. And finally, it is about making it easy to tap into the latest innovations, beyond SAP, to help our customers fill the experience gaps that matter most to their employees.

Now is our time to fundamentally change the way people experience work. Welcome to the age of human experience management.

Greg Tomb is president of SAP SuccessFactors.