Technology is becoming increasingly important to HR. Keith Rodgers looks at the areas it has
Central HR management
The emergence of employee and manager self-service comes as a welcome relief
from HR administrative functions that have wasted time rekeying data or
providing employees with basic information.
Opening access to central systems allows employees and managers both to view
data (such as benefit entitlement or compensation history) and amend it. Most
HR processes – including recruitment, payroll and training – can now benefit
from some element of self-service.
But while self-service grabs the headlines, it’s important not to forget the
core HR management (HRM) system that drives HR transactions. In many cases,
these application suites contain components that users haven’t implemented,
particularly modules designed to support basic HR disciplines such as
competency management and succession planning. Although it will cost money to implement
them, the license fee will usually have been included in the original price –
so if you’ve paid for it, why not use it?
Strong reporting functionality is also essential here, as the central HR
database contains key data to establish HR metrics. Many vendors supplement
their core reporting tools with separate analytical applications, designed both
to measure HR efficiency and provide broader business metrics, such as rates of
One alternative to managing these administrative processes in-house is to
hand them over to a business process outsourcer. It may not be noticeably
cheaper, particularly in the short-term, but outsourcers do bring with them
best practices for HR processes.
Self-service has also crept into the payroll domain – many organisations
allow employees to view their pay history securely online and some distribute
payslips electronically. Not only does this cut the cost of printing, it also
usually means that pay advice arrives earlier – an important benefit for employees
when a mistake needs correcting.
Outsourcing payroll remains a popular option for many HR functions, although
some fear for the security of their data and remain concerned that the function
will lose control over a highly-sensitive process. But unless the payroll
function is providing unique services to the business, it’s usually worth at
least considering a third-party service provider, whether simply to manage the
IT application or to take on the entire payroll function.
While vendors often claim to support payroll across a range of countries,
it’s worth checking the small print to understand their ability to meet tax and
regulatory requirements and the degree to which different country payroll
applications are integrated.
Face-to-face interviewing is so critical in recruitment that many
organisations don’t even consider internet-based recruitment or process
automation. But while it will never fully replace traditional techniques,
internet-based recruitment extends the reach of organisations way beyond
traditional print advertising, and at a lower cost.
Allowing candidates to apply for jobs online – either directly or through
third-party sites – is merely the starting point. Companies can ‘sell’
themselves online through techniques such as ‘virtual tours’, and send
personalised information about future vacancies when candidates register a
Recruitment process automation is another cost saver, particularly where
organisations can manage CVs electronically and automate scheduling.
Training and learning
Most HRM systems contain some kind of training management capability, and
there are often gains to be made in centralising training administration and
sign-up procedures. Organisations are also increasingly focusing on training
metrics, from basic data such as the level of course completion to more
sophisticated analysis that attempts to determine the business impact of
E-learning has yet to live up to the hype, but it demonstrates the huge
potential for providing and managing training information. Ultimately, any
systems should accommodate the learner’s needs – from a two-day residential
course to a 10-minute burst of sales information distributed to a shopfloor
It is still hard to believe how many companies go through an exhaustive
financial budgeting process, yet fail to apply the same principles to people
planning. Many companies have only a tenuous grasp of their people capability,
so some kind of competence measuring system is essential. It should include
data on part-time workers and contractors, who often comprise a sizeable
element of the workforce.
Workforce planning is no different from financial planning – it’s about
assessing the potential of the existing workforce, and establishing where new
skills need to be developed or acquired. The latest software applications cater
for ‘what if?’ modelling – allowing organisations to test scenarios – and also
link into budgeting applications so the financial costs of different scenarios
can be assessed.
At an individual employee level, automating the appraisal process may not be
top of your HR IT agenda, but it has its benefits. Like recruitment automation,
the aim is not to replace the face-to-face experience, but to ensure that the
conclusions of the appraisal are acted upon. Rather than filling out a form,
filing it in a cabinet and pulling it out one year later, appraisal action
points can trigger requests for training and be used to update competency
Performance management, however, goes way beyond the individual. Ultimately,
it’s about measuring performance in the context of corporate goals. A range of
applications exists to help organisations set metrics and measure their
corporate performance – including balanced scorecard applications – as well as
distributing them to employees. That’s where the concept of an employee portal
– effectively, an in-house home page for employees – really comes into its own.
Incentive and reward
It’s impossible to separate performance from incentive and reward. Incentive
management, often viewed from the perspective of sales but actually applicable
to other roles, is an emerging area. The idea is that organisations should be
able to consolidate the different systems used by sales managers and finance,
manage them centrally, and model different incentive packages. Compensation
should then be linked to successful performance, which requires some level of
integration between the relevant applications.