How IT will transform HR

While
technology alone will never transform the HR department, several developments
in the IT field could make a significant difference to the way the HR function
operates, writes Keith Rodgers.

The
technological revolution is having a very gradual impact on how HR operates.
But it is not simply the features and functionality contained in software
applications that are making a difference – it’s more about the way technology
can be deployed to support HR’s strategic needs.

Better
data management and analysis

Every
aspect of people management is influenced by the quality of information
available. You cannot carry out annual appraisals unless you have a record of
your employees’ activities and goals. You can’t plan your recruitment
requirements without knowing what competencies and skills you already have on
board. You can’t make decisions on compensation without relevant financial
data.

In
most organisations, the quality of employee-related data is relatively poor.
Payroll records may well be up-to-date and the core HR management (HRM) system
will contain significant amounts of employee-related information, but that
isn’t enough.

A
large amount of valuable information is locked away in silos, stored on paper
or in standalone systems that only the authors can access. From a technology
perspective, there are a number of ways to address these problems:

Increased
automation
The more manual systems that are automated, the more data can be
converted into electronic format. As well as improving operational efficiency,
‘workforce intelligence’ is a good reason in its own right for automating
processes such as recruitment, learning and performance management.

Centralisation
Electronic data needs to be managed centrally so that it can be analysed and
interpreted. Technologies such as datawarehousing, which allows organisations
to extract data from multiple systems, will become increasingly important.

Adoption
of analytical tools
Take-up of balanced scorecard applications and tools
for workforce planning, compensation modelling, and so on, will increase. As
Patricia Taylor, director of product strategy at employer services company
Ceridian Centrefile says: “Business intelligence tools and industry benchmarking
could transform the power of data into knowledge.”

Data
distribution
Mechanisms such as employee portals, which provide a ‘Home
Page’ for employees and managers to access their applications and personalised
information, will become a central part of the data management discipline.

Better
process integration

Process
integration is essential for ‘joined-up’ HR. Each step of a particular process
should be linked to the next, so that relevant data can be passed from one to
another and where necessary, trigger actions.

In
recruitment, for example, a manager’s decision to make a job offer should kick
off several activities – from approval of the proposed compensation package to
requests for references.

Similarly,
individual processes like performance appraisal should be interlinked with
other processes such as learning, so that training needs are both identified
and acted upon.

Ultimately,
as Wayne Carstensen, managing director of HR IT consultancy and services
company Arinso, points out, the whole concept of talent management requires an
integrated technology backbone to support it.

Integration
has long been a bugbear for the IT industry, but vendors are working at
solutions. Many provide pre-packaged integration to other leading applications,
and the industry is experimenting with a standards-based means of connecting
applications through advanced techniques such as ‘web services’.

Cost-cutting
and efficiency improvements

The
HR department will continue to be under pressure to cut costs, and new
technologies help with this. At least three areas are likely to emerge:

Employee
and manager self-service
Allowing employees to access HR systems to view
data and carry out basic transactions removes a whole swathe of HR’s
administrative burden and increases efficiency. Self-service can provide this
in multiple areas, including changing personal data, signing up for training,
enrolling in benefits, viewing payslips and so forth.

Outsourcing
There are several different types of outsourcing, from service providers who
manage software applications remotely, through traditional payroll bureau
services, to full-blown business process outsourcing. While outsourcing won’t
always deliver cost-savings in the short-term, it is one means by which HR
functions can improve the efficiency of their administrative functions and
focus on more strategic activities.

Specialist
applications
New applications will emerge to tackle specific needs,
particularly in terms of compliance. Arinso’s Carstensen argues, for example,
that time management applications will become a key area as organisations
attempt to demonstrate compliance with the Working Time Directive and other
legislative requirements.

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