What's the HXM all about?

Nowit's HXM. SAP proclaims the next paradigm shift from Human Capital Management(HCM) to Human Experience Management (HXM).

While HCM primarily focused on management and optimization of human capital by HR departments, HXM now centres on aligning HR processes with the employee experience and the needs of individual employees, or as Lars Thiwissen, Head of SAP SuccessFactors Germany, puts it: to strengthen "employee loyalty and motivation through positive experiences in and with the company" [SCH20]. An SAP SuccessFactors-sponsored study concludes that the desired culture shift from HCM to HXM "creates a blueprint for success" [IDC19] for companies. The digital transformation, the ability of companies to react agilely and flexibly to economic and social developments(e.g., also COVID-19) is only to achieve with employees. Motivating them accordingly, retaining them or attracting them to the company will be the key task of HR in order to successfully master current and future developments in the working environment, or as the authors of the IDC study summarize it: "All of this can then be translated into a reactive employee culture that is capable of development, promotes business growth that is geared to personal development and brings better returns" [IDC19].

The IDC study identifies three key action areas for realizing visionary human experience management:

1. a personalized growth and talent strategy with flexible and agile learning and development platforms, recruiting using the latest technology, internal mobility, and measures for effective employee retention.
2. the development of a suitable employee ecosystem, in which continuous feedback, real-time analysis platforms and new KPIs can be used to constantly collect, evaluate, and flexibly respond to employee experiences.
3. active work experience management in succession and development planning, in compensation and health management, always with the aim of "optimizing, redesigning or refining the employee experience as necessary with the help of survey and measurement tools that regularly record engagement and gauge employee sentiment" [IDC19].

Of course, with SuccessFactors and Qualtrics, that was acquired in 2018 for $8 billion, SAP offers the technical solutions to "design employee experiences so your company can keep up and stay awake in the Experience Economy" [SAP20]. Among others, Utah-based Qualtrics offers cloud services to survey and evaluate employee experience and satisfaction in the enterprise, and SuccessFactors as a cloud suite covers almost all areas of recruiting, talent and performance management, learning and competency management, as well as collaboration, administration, and compensation, and is also gradually expanding its solutions with intelligent technologies and machine learning.

A closer look at other providers of HR solutions shows, that by no means SAP is the strategic pioneer when it comes to Human Experience Management

Heidi Spirgi, Chief Strategy and Marketing Officer at Cornerstone, also speaks of a paradigm shift and a new "era where companies need to truly authentically know their employees [...] to drive positive change and move forward" [CS920]. With the acquisitions of Saba and Clustree in 2020, CSOD has expanded its cloud-based workforce development portfolio to include Talent Experience solutions [CS420] and an AI-powered skills engine and ontology [CS120], showing where it is headed strategically: "to make people's experience at work a better, more personal and rewarding one," as CTO Mark Goldin writes in his blog, looking at the future of AIin Cornerstone solutions.

A new employee experience (EX) platform designed to deliver a personalized and streamlined approach to managing modern employee experiences across the enterprise

Workday and Talentsoft are also expanding in this direction. Commenting on the acquisition of Peakon earlier this year, Somers, general manager of talent optimization at Workday, says to combine "Peakon's innovative, AI-powered employee engagement technology with Workday" for" fostering meaningful employee experiences" [SOM21]. French vendor Talentsoft presents its latest innovation, Talentsoft Match, an AI using solution born out of its acquisition of Crafty, which strengthens Talentsoft's ability to "improve both the employee experience and the company's competitiveness" [TAL21]. In addition, Oracle with its new innovations such as the Experience Design Studio or Oracle Journeys offers solutions that focus on employee and work experiences: "a new employee experience (EX)platform designed to deliver a personalized and streamlined approach to managing modern employee experiences across the enterprise" [IDC21].

But how new is the proclaimed paradigm of a forward-looking vision of HR as the initiator and guardian of positive employee experiences inworking environments?

In any case, the idea that motivated and committed employees are more efficient and thus make a decisive contribution to business success, and that companies are also well advised to create appropriate enabling spaces and conditions for employees, is definitely not new. As early as the beginning of the 1930s, Harvard professors at the Hawthorne Works of the Western Electric Company in Chicago were able to prove that improved working conditions for workers resulted in a measurable increase in performance [KIE99], thus initiating a countermovement to the prevailing Taylorism with the human relations approach. Already with the replacement of the human image of scientific management towards a socio-emotional person, the human relations movement propagated that the social needs of humans for communication, recognition, satisfaction, self-actualization and positive experiences should also be taken into account in the working world [GRO80]. Latest at this point, it is worth taking another look at Maslow's pyramid of needs, which is so often cited. According to this, work motivation does not depend solely on the respective remuneration, but is only awakened and satisfied by the drives located higher in the needs pyramid and their possibility of satisfaction: i.e., self-realization, esteem, independence, communication and group membership[MAS54].

Offering employees positive work experiences can be a proper step toward effectively engaging employees

Even the linguistic and content-related expression as employee experience is not a new concept, but the idea comes from marketing and is derived from 'customer experience'. As early as 2008, Abhari from San Diego State University suggested to transfer the customer experience management concept to employees in order to strengthen motivation, performance and loyalty to the company: "Offering employees positive work experiences can be a proper step toward effectively engaging employees" [ABH08].

What is actually new are the technical possibilities

In the Europe edition of the SuccessFactors Gold Guide, SAP writes: "We have finally reached a point where technology can deliver what our people - our employees - expect: Interaction, connectivity and personalized experiences" [SAP20]. This is only part of the truth, for technical possibilities go much further. They put companies in a position to collect precisely this individual experience data in real time, evaluate it, and put it in context with other company data in order to derive strategic decisions and response measures from it. Previous HR solutions were only able to collect and process business and organizational data (the so-called O-data). It was difficult to derive decisive interdependencies from this data. With the new technologies, on the other hand, it is possible to elevate employee experience data (X data) and, with the help of intelligent algorithms, to create real KPIs and causalities between O and X and not just pure statistics. With artificial intelligence technologies, machine learning and robotics combined with the outsourcing of employee-centric processes to the cloud, it has only become possible to think HR differently and, for example, gather real-time feedback, offer personalized learning and development, provide mobile working and be able to analyse the resulting amount of data in a meaningful way in the first place. Theoretically, subsuming these developments and technical innovations under the term "employee experience" is an understandable and smart trick. Products sell better when they follow current trends or generate the trend themselves.

It is likely that companies will follow the trend shift towards experience management

If one wants to argue somewhat mischievously, as the two American university professors Swanson and Ramiller [SWR04] have done, decisions for information technology innovations are usually made carelessly at top management levels and trends are followed "mindlessly", so to speak, if only they are placed sufficiently dominantly and persistently in the media, at trade shows and congresses. This decision-making moment, referred to as the "bandwagon phenomena," may certainly not be dismissed out of hand and, given the almost closed focus of major technology vendors on HXM, may in many cases determine the strategic direction of companies. However, there are also other, very present reasons why the trend will sooner or somewhat later not fundamentally revolutionize the function and mode of operation of human resources but will change it permanently.

Nowadays, people expect the same seamless consumer experience in their workplace as they do in their private lives

As early as 1992, Schulz postulated that we live in an "experience society" [SCH92] with shopping experiences, vacation experiences, Jochen Schweizer and experiential education. Conversely, this means that (positive) experiences are also expected in the working world. Jakob Kiblböck, Head of SuccessFactors CEE at SAP, puts it this way: "Nowadays, people expect the same seamless consumer experience in their workplace as they do in their private lives" [BRU20]. And indeed, the boundaries between work and private life seem to be increasingly disappearing. Futurologists and bloggers therefore no longer speak of work-life balance but already of work-life blending [PAS15]. So, what could be more obvious than to bring work-life experiences closer to private ones?

And the linguistic infiltration through marketing and product presentations by the major vendors will also ultimately contribute to the focus on the employee experience becoming the new trend in HR. Kirsten Schmidt rightly writes in SAP News that language influences our perception[SCH20] and Lars Thiwissen says: "HCM was a success story and still is today - not least because the term has also shaped a new attitude and a new self-image" [SCH20]. It will probably be the same with HXM.

And then there was COVID-19. The pandemic showed how quickly our industrial, prosperous, and feel-good society, which we thought was so secure, can be thrown out of joint and how important agile and flexible response options can be, especially in the corporate context. Home office, cloud-based access to corporate data and flexible working time models are just few of the keywords in a comprehensive corporate strategy to absorb such socio-economic upheavals without damage.

So what is it about HXM and the propagated paradigm shift?

The technical-theoretical framing with the buzzwords 'Employee Experience' or the German 'Mitarbeitererlebnis' captures the zeitgeist, but seems contrived in some places and there is little that is really new about it.

But yes - the technological innovations already realized or announced by major providers in the HR environment, especially in connection with machine learning and artificial intelligence, do indeed seem to herald a paradigm shift. The entry of intelligent algorithms into human resources will certainly transform working environments in the long term. And especially the linking of O-data with the previously largely unknown X-data can open up completely new and exciting scopes for HR and corporate strategic decisions. However, it remains to be seen whether and how companies will succeed in establishing a correspondingly accepted and lived feedback and deriving innovative measures from the insights gained. In any case, the technology for this is already available or will be in the near future.