The PWA/PersonnelToday Annual HR Software User’s Survey

HR’s enthusiasm for technology is encouraging news, highlighting a profession keen to get the best out of the latest IT systems. But there is still room for improvement, as the results of our annual Software User’s Survey show


With more up-to-date systems and a greater level of computer competency in the profession than ever before, HR professionals are still pushing to get the most out of their systems.

But it appears that the full potential of HR management systems has yet to be reached, and the compromised service currently delivered is a combination of dissatisfaction with suppliers on the one hand and the failure of users to exploit all system features on the other.

The PWA/Personnel Today Annual HR Software User’s Survey this year received 1,620 respondents – a 65 per cent jump on last year. As such, the results confirm trends noticed in the previous survey and highlights new developments. With such a substantial increase in respondents, the survey offers a real insight into the use of HR software in the function.

10% describe their HR software as excellent

Dissatisfaction with HR software appears as prevalent this year as 12 months ago. Users still rank quality of management information, software reliability and time saved on administration as essential criteria to satisfaction with a system, but marks for actual performance in these areas show that little more than 10 per cent of users think their systems are “excellent” while only a third rate them as “good”.

Functionality, rated as “essential” or “important” criteria by 90 per cent of respondents, represented a particularly significant area for dissatisfaction with almost a quarter (24 per cent) rating their software as “poor” in this area.

Alarmingly, 21 per cent rated their system as “poor” in terms of ease of use – indeed, only a third (34 per cent) of users could rate their system as “average” or “good” in this area.

These figures show no great change from 1999 – hardly surprising, given the run-on time for new HR systems to be developed or improvements implemented to existing systems. There is an issue here for suppliers, but there is still a market for a high performance HR system which produces high quality information and is easy to use. Indeed, ease of use would seem a prerequisite for any system which might be intended for use by employees across the organisation.

If the full potential of an HR system is to be reached, the information they generate must be made accessible to all employees, and not just the computer-literate.

45% consider computer competence to be very important when recruiting an HR professional

There is no doubt that IT skills are an integral part of the HR job. With only 1 per cent of respondents claiming computer competence to be unimportant, 15 per cent rate this competence as essential, a 2 per cent rise on last year’s figure. The reason for this importance clearly extends beyond the day-to-day operational concerns – 57 per cent of respondents asserted that the HR function has the final decision on the HR system implemented, with the finance and IT functions being simply “influential” on that decision.

Meanwhile, 63 per cent of HR departments have responsibility for the overall management of HR software.

Are current HR professionals up to the job? It would seem so. Self-reported skills levels have stayed as high as they were last year with 44 per cent rating their own computing ability as “good”, 35 per cent “very good” and 11 per cent as “excellent” when asked to rate their skills a year ago.

It is clear that there is a general movement towards greater skills, with 16 per cent rating themselves at zero or beginner level in 1999, falling to 7 per cent when rated now.

61% of those changing their HR systems are doing so because their current software no longer meets their needs

Overall, the percentage of respondents planning to replace their system fell from 39 per cent last year to 34 per cent in 2000. Also, more companies reported that they would be changing their system in six to 12 months’ time (32 per cent), rather than the six-month timescale preferred (26 per cent) last year.

These results could be the fall-out from investment in Y2K compliance. Many companies completed changes and replacements to their system last year, reducing the need to do so this year. This is borne out by figures relating to how long current HR systems have been in use. Last year, 27 per cent of systems were more than five years old. In 2000, however, the highest percentage of respondents (23 per cent) put the age of their systems at between one and two years.

The fact that 61 per cent of those changing their HR system are doing so because the software no longer meets their needs – and in addition, the second most popular reason stated was “inadequate management reporting” – suggests that HR departments are facing greater demands for information and enhanced HR management from their organisations. This is driving the function to get more out of their IT systems.

Interestingly, it appears that 44 per cent of those changing their current HR system want to do so to integrate HR and payroll, yet elsewhere in the survey this initiative does not appear to be popular. From the 1,620 respondents, 43 per cent reported that payroll and HR data operate separately from each other. Moreover, there has been a swing towards finance taking responsibility for payroll rather than the HR department, with 56 per cent of companies giving the responsibility to finance – a rise of 2 per cent on last year’s figures.

Of those who had integrated HR and payroll, the highest levels of satisfaction were recorded for benefits such as the increased reporting capability, the reduction of data entry and the increased accuracy of information. And, as if to emphasise the importance of the reporting capabilities of such technologies, inadequate or limited reporting facilities were cited as the greatest barrier to achieving benefits by those dissatisfied with their integrated HR and payroll system.

24% of organisations give 90- 100 per cent of their employees access to a PC

Technology use has grown substantially over the past 12 months. Last year, a third of respondents surveyed reported that only 0-10 per cent of staff had access to a PC – the largest proportion of respondents. This year the emphasis has switched to organisations offering 90-100 per cent of their staff access to a PC.

Business services, finance, telecoms and IT companies scored the highest figures for PC access while retail and the public sector continue to occupy the bottom slots, partly because most of their workforce do not need to use technology in their daily work.

Internet access has risen, and the provision of e-mail has also increased. Again it is those industries with a direct connection to technology – business services, finance, IT and telecoms firms – that show the greatest use of the technology, suggesting the HR department has benefited from knowledge and experience of IT in other parts of the business.

Of the 799 organisations currently operating without an intranet, 25 per cent plan to implement one in the next year and a further 22 per cent within two years. Yet 12 per cent reported that they would never introduce an intranet.

The figures suggest some scepticism about the use of intranets. This could be put down to the cost of implementation or simply that some organisations do not consider themselves large enough to benefit from such a network.

41% would like the ability to view, manage and report on their team’s HR data using a company intranet

Among the 808 companies surveyed that run an intranet, the use of this technology appears mundane, while both potential and future expectations run high.

Of the initiatives made available over intranets, the internal phone list appears to be the most popular, with 79 per cent of companies offering this service. Policy documents – the company handbook and personnel policies – are also made available, as are promotion notices (49 per cent) and vacancies (54 per cent).

Training courses and the ability to book training is available to only 30 per cent of organisations and yet 37 per cent of respondents stated they would like to put such an initiative in place.

Interestingly, only 9 per cent of organisations that had not put the internal phone list on the intranet said they would want to take this initiative, showing how HR managers have set high expectations for using the intranet. Rather than limiting the network to the provision of low value-added services, they want intranets to deliver significant service changes. Indeed, when asked which HR functions could be effectively streamlined by the intranet, three-quarters (74 per cent) offered training, with personal development (58 per cent), career development (61 per cent) and absence (54 per cent) all attracting more than half of the respondent’s votes.

Organisations seem split over whether on-line training will be delivered over the intranet to staff, with 37 per cent saying “yes” and 38 per cent “no”. Despite this, there is a swing towards accepting the idea compared with figures from last year, when 48 per cent said “no”.

Of those planning to introduce on-line training, 44 per cent intend to record the training carried out using on-line software, while 25 per cent will use links to the HR system from the on-line training software – both results being another indication of the high expectations HR managers have of technology in helping their work.

43% of organisations have no drive to implement a common HR system for group-wide HR purposes

The use of common HR systems throughout organisations is by no means a straightforward subject. Only 15 per cent of respondents operating solely in the UK report the same system being used in all locations while only 7 per cent plan to implement a common system in the future.

The main reasons stated for wanting to implement a common system were to share information and give access to data across departments while also facilitating central control. It would appear that organisation size and cost represent the two greatest barriers to standardising systems – in some cases, there are simply no advantages to be gained from parity between systems.

The survey found that 31 per cent of respondents, including those operating internationally, are keen to pursue a drive to implement a common HR system for group-wide HR purposes, compared with 43 per cent with no such drive. Yet the reasons for pursuing such a drive or not appear to be the same. Both groups recorded 12 per cent preference for the same reason – to ensure consistency of data/standardisation and coordination.

This issue could illustrate the greatest barrier to the accepted global use of IT in HR. There appears to remain a great deal of suspicion around the implementation of common HR systems – managers may not fully understand what these systems do or how they work.

For this reason, while some HR professionals perceive the introduction of common systems as a way to ensure data is standardised, thereby enhancing the value of that information, others believe such links would be detrimental to HR data. No doubt the size and structure of the organisation has a role to play here – whether a common system is good or bad may depend on whether the HR function is centralised or dispersed across the organisation.

34% claim reports from the HR system are regularly used by senior management for budgeting

Monitoring and careful analyses of absence is carried out by 51 per cent of HR systems. Yet when it comes to using the system for strategic planning and decision-making, there appears to be little change in use over the past 12 months.

While 34 per cent report a regular use of HR systems for budgeting, only 23 per cent say similar information is used for general business planning. Strangely, HR systems are rarely or never used for succession planning, while salary and manpower planning both use HR system reports regularly.

It is clear that there is still room for improvement in the use of HR system reports by senior management – or that such reports should be made more relevant to business management. At the moment it would appear that only HR processes which have clear and direct financial implications get a look-in but, according to the survey, there has been an overall, if small, growth in the occasions when the HR system is consulted.

Encouraging news, certainly, but not enough to suggest that IT alone can provide the key to HR gaining a permanent voice at board level.

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