Welcome to the #HRTechChat podcast, where we delve into the realm of human resources and explore the latest trends and innovations in HR technology. In this episode, we had the pleasure of hosting Maria Scarangella, a talent strategist, executive coach, and consultant, who shared her valuable insights and experiences in HR economics and its impact on organizations.
Understanding HR Economics:
According to Maria, HR economics serves as a decision-making framework, guiding investments in people to maximize returns. In today’s complex business landscape, where organizations face overwhelming changes, having a structured approach to decision-making becomes crucial. By aligning HR strategy with organizational goals and leveraging data, HR leaders can make efficient and effective decisions that drive results. Ultimately, the goal is to deliver value to customers and maximize returns for owners.
The Story of Geico:
Maria shared her experience as the Vice President of Talent at Geico, where she faced the challenge of optimizing staffing. Instead of focusing solely on hiring, Maria’s team took a holistic approach by analyzing the entire employee lifecycle. They identified the cost associated with each stage and sought to address the unintended consequences that arose. By assembling a cross-functional team of experts and leveraging HR technology, they revolutionized Geico’s hiring process, delivering better results while reducing costs and improving the candidate experience.
Leveraging HR Technology:
Maria emphasized the need for HR leaders to view HR technology as more than just an automation tool. It should be seen as an ecosystem that adds value to candidates and employees. Maria shared how Geico utilized a tech stack that included Workday Recruiting, Phenom, Brazen, and SHL assessments to streamline the hiring process, improve cultural alignment, and simulate job experiences. The strategic integration of these technologies transformed Geico’s approach, resulting in cost savings and increased efficiency.
Unleashing HR’s Strategic Potential:
To replicate Geico’s success, HR leaders must begin by aligning their purpose with organizational goals. By understanding the value of people and the associated costs, HR professionals can build a solid business case that demonstrates their contribution to the organization’s success. Equipped with financial acumen, HR leaders can engage in strategic conversations with operational leaders and the CFO, establishing themselves as valuable partners who drive business outcomes.
Final Thoughts:
The conversation with Maria highlighted the critical role of HR economics and technology in shaping the future of HR. By adopting a strategic approach and leveraging HR technologies, organizations can maximize returns on their investments in people. HR leaders must align their strategies with business goals, utilize data to inform decision-making, and understand the financial impact of their initiatives. This transformation elevates HR’s role to that of a strategic business partner, creating value and driving success across the organization.
Join us for more insightful discussions on the #HRTechChat podcast, where we uncover the latest trends and innovations in HR technology. Together, we can shape the future of HR and create thriving workplaces.
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Transcript:
Jennifer Dole 00:00
Welcome back to the #HRTechChat podcast where we dive deep into the world of human resources, and explore the latest trends and innovations in HR technology. I’m your host, Jennifer Dole. And in today’s episode, we have a very special guest, who is a talent strategist, executive coach, and consultant. And she brings a wealth of knowledge and experience to the table with her expertise in various areas such as culture, coaching, team effectiveness, leadership development, I am thrilled to introduce you to Maria. And Maria, thank you so much for joining us today.
Maria Scarangella 00:44
Thank you, I’m so happy to be here.
Jennifer Dole 00:47
So it is our pleasure, Maria. And let’s just dive right in. Because when we spoke earlier, you talked about HR economics, and its impact on organizations. And I would love to hear from you. What it means to you, what does HR economics mean to you?
Maria Scarangella 01:11
HR, economics really is a framework for decision making, and a way to guide your investments and people to get to maximize the return. And if you think about how complicated our world has gotten over the past three years, there’s so much coming at at all, and having a structure for that decision making allows you to strategize as well as impact results. And if you think about, you know, organizations like 360 insights, helps people sort through all the overwhelming change to make the right decisions. And to me, there’s really three parts of it. So first, it’s your strategy, where are you going? And then how do you use data to efficiently and effectively guide your decision making? And then what’s the impact? And it you know, if we just dig into each of those a little bit more every organization is in existence to deliver value to their customers, and some type of result to their owners, whether they’re public or private. And I work with a lot of PE backed firms and help them sort through, there’s really two things their owners want. It’s, you know, EBITDA, and net working capital to be maximized or EBITDA. And inventory reduction. So if you think about that bigger strategy, labor plays a big impact on it. And then, yeah, it really does. And then the data is, is HR economics.
Jennifer Dole 02:58
Yeah. And I love how you call it HR economics, because HR needs to tie their strategy to the business strategy, HR needs to tie their data to the business data. And I love what you’ve come up with.
Maria Scarangella 03:16
Thank you. Yeah, really, it was formed because I ran both operations and HR at a very senior level for Geico, which is a huge insurance company. And I understand the pressure that operations have to deliver and that HR has to be able to support. So, I created HR economics to guide that with understanding. Okay, so what is the cost of turnover? affect us? And what are the components that lead up to that? So what’s your cost of higher What’s your cost of performance gaps, and when you look at the amount of money that is lost through effectiveness or inefficiency, you could take a portion of that investment and or that that loss or that expense and invest in your people, you can get 10x return and have a big impact.
Jennifer Dole 04:25
And that return on investment is what many HR technology vendors are trying to connect to. Yeah.
Maria Scarangella 04:33
And if you talk about it in terms of what’s the return on investment, you end up seeing that you could get a 10x return from implementing some technology solutions, which really is fantastic.
Jennifer Dole 04:47
Yeah, I’d love to hear your experience doing this because I know you’re leading a consulting firm right now. But you’ve gained so much expertise from being an HR practitioner, using technology to help drive the strategy in the data and the impact, can you share a little story for us?
Maria Scarangella 05:11
Yeah, I’d be happy to share a story. So when I was first promoted to the Vice President of talent, the biggest problem that we were trying to solve is staffing. And, you know, I always tried to get to what’s the biggest problem that we’re trying to solve, because there was a focus on hiring, there was a focus on training, there was a focus on turnover. But if you could step back and look at the full employee lifecycle, and put a cost to each stage of the lifecycle, it allows you to create a much more dynamic model where you get benefits in each of those different steps. So really looking at what’s the full problem? And what are some of the unintended consequences that come from each stage? So we built a team that was very talented of IO psychologists, some data scientists, and some experts in branding and recruiting and learning and development. And what we did was look at what was happening at each stage, and how was it impacting downstream areas? And what were some of the unintended consequences of the way that we were doing each of the stages? As a great project? Yeah. And you know, being able to step back and look at the whole process allowed us to make very different decisions, because we were constantly re evaluating based on the additional data that we had. And we use the Agile Model. So that we would continue to iterate and improve. And I’ll just tell you a little bit about some of the things that we did and some of the vendors that we used, if that’s
Jennifer Dole 07:11
okay, that’s great. I’d love to hear it.
Maria Scarangella 07:15
So we started by looking at how are we hiring an onboarding and training and what we did was implement workday recruiting. And then we supplemented it with phenom, which is a candidate relationship management system that allowed us to help people choose a job that that would most resonate with what they were looking for, in the work that they were doing. And that would help us give an indication of the culture. And to support some of that immersive understanding of the culture we use brazen, and had videos of different leaders talking about their experience and successful employees talking about their experience. So it gave a candidate a good understanding of what they were about to walk into. And then we supplemented to understand the skill sets, because when you’re hiring, you’re looking for two things, right, you’re looking for someone who can do the job and someone who’s going to stay and be connected to the culture and aligned. The eight SHL assessments allowed us to simulate the experience of what it would be like to talk to a customer and see a realistic job preview. So we put together all of those pieces and implemented and adjusted and, you know, looked at the value and the cost of all of those technologies. Were still cheaper, and delivered a better result than our old process.
Jennifer Dole 09:11
So there’s so much to unpack that Maria. And it’s such a great example. Because you use your tech stack, to do more than just automate, but really to create value for the candidates, but as well as the people within your organization. And that is like that is where people want to go right? It is beyond automation at this time. But it’s using that technology to get to the conversation faster with the right people
Maria Scarangella 09:43
Right. So we took a really labor intensive, time consuming hiring process and strategically added technology that created an efficient, effective process. delivered better results for the company reduced frustration for the hiring managers and created a better candidate experience.
Jennifer Dole 10:09
Yeah, what an amazing story. And the fact that you started with process with this cross functional team, and you looked at everything you did the entire experience, and really picked those areas where you could have the biggest impact.
Maria Scarangella 10:30
Yeah, and we really, you know, stepping back and looking at what’s the problem we’re really trying to solve and not stopping at hiring or not stopping at training, but it’s an overall staffing solution. So if you step back from that, and you decide the strategy first, and then think about how the pieces fit together and solve for the bigger issue, then you seek out the technologies that solve each of the steps of your process or that supplement. And then you can consider some of the unintended consequences. And really put together a suite of technology that’s more like an ecosystem rather than a hiring solution or a training solution.
Jennifer Dole 11:25
Yeah, for sure. So, so let’s so with this story that you’re telling, like, what recommendations do you have for other HR leaders that are looking at this saying is such a big change? I don’t even know where to begin? Yeah,
Maria Scarangella 11:43
I think the very first step is getting really closely aligned with what you have to deliver to the organization. So what’s your purpose? And what are those big goals that the whole organization has? And what’s the work that you’re doing? How does because it either takes you a step closer or a step further away from those goals. And then building out the financial metrics that allow you to make decisions about how to spend your money, and then calculate what’s the projected impact of the impact of each of our investments and understand that, you know, when you purchase a piece of technology, you’re not going to get all of the results in the value day one, but you should get a significant lift. So maybe you start at a 3x return on your investment, and then build the rest of the infrastructure to support getting to that 10x. And you really should expect and target a 10x value on your investments. And that’s, yeah, it is. It’s a very big number. But that’s a lot of the work that I do now, is helping organizations see that bigger picture, and then strategize of how you get there.
Jennifer Dole 13:13
Not and so it’s, is it building the business case? Or is it beyond that?
Maria Scarangella 13:21
I think it’s beyond that. I think it really is understanding the value of people in your organization, and the overarching, cost and value and then building the business case, after you understand that as a practitioner, or as an HR leader, then you can use that data to inform your business case. And then the operational leaders understand how you really are helping them achieve their goals, because everyone is aligned.
Jennifer Dole 13:59
Yeah. I was just reflecting on my time as an HR practitioner at Liberty Mutual competitor of guy goes, and you know, there were conversations where headcount was an expense. And, you know, times have changed, because we now look at what’s the value that these people can create with their skills? Yeah. And it’s a lot of information and data that we need to have at our fingertips to be able to tell that story as HR leaders.
Maria Scarangella 14:37
Yeah, and I think that, you know, when HR leaders can speak about the financial impact, they are so empowered to have a different conversation. And at times, you know, you think about how there’s been so much change to our workforce edition. and subtractions layoffs, if the HR leader can really guide the business on this is the value that this group of people deliver. And this is how we can make this group more efficient or effective. It changes the whole story. It’s a completely different conversation.
Jennifer Dole 15:25
It does, it makes HR much more of a strategic business partner.
Maria Scarangella 15:30
Yeah. And that’s really where they should be, they should have a seat at the table. I think that as HR professionals build this financial acumen and this skill, they also can have much more effective conversations with the CFO and be in alignment.
Jennifer Dole 15:49
Yes. And the CFO wants to have those conversations, they want to understand. They want to debate ideas, because they’re doing it with other leaders. They want to do it with HR, too. Yeah, I agree. Well, thank you for sharing your story with us. And really appreciate your time. It’s there’s just so much lessons to learn. And I’m so happy that you are out there helping others do what you’ve done to be successful.
Maria Scarangella 16:24
Thank you. My pleasure.
Jennifer Dole 16:28
So thank you for being with us today. This is the latest podcast for HR Tech Chat. And a very good one, some great experiences stories shared today. So thank you very much and we’ll see you soon.