HCM Is No Longer Enough: The Rise of HXM

Employees are the heart of every business. They make it possible to keep the lights on, turn a profit, create happy customers, and ultimately to achieve the larger mission. That’s why customer-centric businesses are shifting to put employees first through a concept called human experience management (HXM). It’s a complete rethinking of what the HR function does, and how, with a human-first approach, to impact the entire enterprise.

HXM was created in the void of human capital management (HCM). HCM was designed to support HR-driven processes like paying, training, and hiring. But business has changed, and like so many technologies and processes, HCM was no longer enough to meet the needs of organizations’ most important asset: their people.

A huge gap emerged, reflecting the expectations and experience of employees, managers, and candidates, and the realities of everyday life at work. HCM didn’t leave room for optimization or a rethinking of HR’s role in creating an engaged and highly productive workforce. HXM flips the typical HR narrative on its head to create a better environment that empowers employees with the software and support needed to do their best work. 

This cultural shift is a new way of approaching HR by proposing that business success hinges upon putting people first. It’s about delivering best-in-class experiences whereby HXM extends beyond HR and has a positive impact on all individuals: managers, employees, candidates, new hires, HR leaders, contingent workers.

It’s about reinventing people’s experiences at work to make what they do easier, more intuitive, and seamless. 

Why Is HXM the Right Approach?

HXM differs from other approaches by adding a new layer of data and understanding that wasn’t available when the term HCM was coined. HXM marries operational and experience data to provide a comprehensive snapshot of your organization.

Experience data is a newer asset for businesses that focuses the organization on experience management. It offers a glimpse into how employees feel and what employers can do to support them better. By combining this data, organizations are able to understand the “what” and the “why,” and then take action based on those insights.

Additionally, the future of work centers on being able to provide the right data to the right people at the right time. This requires ongoing collection of data and proactively listening to employees to understand key facts and figures such as how employees feel, how they are performing, and what percentage of candidates that start an application finish.

These qualitative and quantitative measures can help businesses unearth challenges before they have a negative impact. HCM taught HR teams to value process, but HXM practitioners listen to employees and explore data to close experience gaps. With these two types of data in hand, HR teams can understand what’s working and what’s not to drive continuous experience improvement.

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Why Now?

2020 has been a challenging year for businesses across the world and across verticals, making the need for HXM efficiency paramount. Switching supply chains or handling skyrocketing demand overnight requires having the right people on staff to roll with the punches and help the company emerge victorious. Employees have accomplished these feats while juggling childcare from home or having to wear a mask and distance from colleagues onsite. Everyone is talking about employee experience — but implementing an HXM strategy is how organizations truly gain flexibility in a market that requires it. 

Business now moves at the speed of light and only modern HR systems are able to keep up. Take a thriving ecommerce business that saw a massive and sustained increase in orders during COVID-19. This company needed to grow their team rapidly in order to fulfill the uptick in orders and customer service requests. Being able to hire the best candidates and get new hires trained quickly is essential to making the most of the revenue potential.

With HXM, systems are explicitly designed with people in mind, how they work, and what they need to be productive. All so that HR managers can quickly hire and new team members can easily get onboarded, trained, and paid.

Looking Ahead

HXM is here to stay and will grow as companies double-down on their people strategy. When HXM is executed effectively, employees will be their company’s biggest fans because they have been supported at the highest level. They will exceed their goals, refer excellent candidates, and get promoted more often. And this has tangible benefits for companies, including improved morale, reduced turnover, increased performance, and greater competitive advantage.

The question facing modern businesses is this: How can we better understand our employees and candidates to offer truly individualized experiences that allow them to do things more efficiently and empower them in new ways? HXM provides the opportunity to solve this challenge in a way that elevates HR from checking boxes to being a true partner across the organization.

Lara Albert is vice president of solution marketing for SAP SuccessFactors. She leads the global go-to-market strategy and execution for the SAP SuccessFactors Human Experience Management (HXM) Suite, which includes talent management, core HR and payroll, analytics, employee experience management and cloud platform tools and technology as well as initiatives such as diversity and inclusion and well-being at work. Prior to her career at SAP, she led Marketing for a Seattle-based marketing tech startup, and held leadership positions in brand and product marketing at VeriSign, AOL and Kraft Foods.

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