This article is first published in HRM Singapore – Issue 9.10: Annual guide to HR Technology and Outsourcing
It’s a digital era, particularly when it comes to HR and its processes. Now, more than ever, technology is freeing HR to concentrate less on transactions and more on strategy. HRM considers the latest movements in an ever-changing market.
If there’s one constant thing in this ever-changing world, it’s the continual evolution of technology in all parts of life. HR may be an essentially people-focused discipline, but its certainly not immune from this. Indeed, the pace of technological change when it comes to HR solutions is as fast as in any other business function.
The market for HR technology products and systems can be a busy and confusing one: a wide range of products seemingly solving a wide range of HR processes and problems. So what is the already busy HR professional to make of it all? Is it too much effort for too few savings?
Chia Chew Lee, Deputy of Director, Office of HR, Republic Polytechnic, says that’s definitely not the case. Indeed, properly integrated software solutions actually save both money and time. “Our organisation fully embraces information technology and (it) is now an indispensable HR tool for all staff,” she says. “The most visible advantage is the reduction is bureaucratic red tapes, resulting in faster decision making.”
Ari Kopoulos, Sales and Marketing Manager for EmployeeConnect says the latest systems are designed to work in tandem with the HR professional’s unique skill set.
“HR technology on its own is not a solution,” he says. “But combined with good HR practice, it allows the HR professional to apply their management expertise and become not just a service component to the business, but a source of continual improvement and value-add, ultimately contributing to the growth of the business.”
Automation and analysis
The benefits of technology fall roughly into two distinct areas. In the first instance, software solutions can be used to automate typical HR transactions – from leave calculations to candidate sorting. But more sophisticated applications are used to collate and analyse data from throughout the portfolio, creating real and usable metrics for longer term talent and performance management.
The transactional assistants cover a wider range of areas. Kopoulos says the most basic – but probably the most in demand – for these is leave management. “Going beyond a simple leave liability report, the most effective managers are able to identify those team members with excess leave entitlements, identify absence trends and manage resources effectively,” he says. Technological applications allow HR to be fully aware of these important factors in real time, allowing them the greatest windows for dealing with any issues. “The graphic reports allow managers to quickly assess and forward plan not only a reduction in excess entitlements, but ensure that current entitlements are taken to prevent ongoing build up of excess leave and liability.”
Analysis tools use a range of information to go a step further. “This delivers transactional efficiency and savings, but more importantly it allows you to measure, manage and inform,” Kopoulos says. Take the current economic downturn as an example. With many companies looking to decrease their headcounts at the bottom of the economic trough, there was a significant difference in the capabilities of HR departments to make the best possible decisions – and know they were making the best possible decisions.
Unsurprisingly, those with access to intelligent information systems came out on top.
With carefully selected HR information systems, HR can receive (again, in real time), graphic reports plotting a range of metrics for single or multiple employees. “This allows managers to quickly assess information on key positions, valued skill sets, (and) performance assessments facilitating targeted and value-based downsizing.”
But the latest market offering go even further still, creating total solutions that integrate systems and processes throughout the HR department. Cher Chan, Head of Field Marketing, Asia Pacific, Stepstone Solutions, says these systems boast greater analysis capability – drawing on data from a wide range of sources. “An integrated solution has analysis power,” she says “It helps to develop meaningful numbers, graphs and charts.”
Perhaps surprisingly, she says many organisations –even some large multinationals – have found themselves stuck using antiquated technology solutions, leaving them behind the pace when it comes to making high quality informed and justified decisions.
“Some companies are still using isolated Excel spreadsheets and databases, or old finance software applications,” she said. This may help back up simple decisions relating to a single metric or data set, but cannot do much when HR needs to consider the overall performance of an employee or suitability for higher duties.
Chan cites one of Stepstone’s clients, a multinational with offices throughout the Asia Pacific region. It needed a system that not only considered overall performance management, but also helped HR to make important succession planning decisions. “This manufacturer’s ability to ensure it has the right person in every post depends on careful succession planning,” she said. “It needed an efficient way to identify and nurture candidates with leadership potential who could execute the company’s strategy.”
Stepstone developed a comprehensive web-based solution for the client. It provides a single solution for creating storing and managing employee talent profiles across the region, with a self-service capability that engages employees and reduces the HR administrative workload,” Chan says.
The results have been immediately noticeable. With some 23,000 employees throughout the region, the company now has a single, integrated talent management solution that also contributes to building that much-needed talent pipeline for the future. Further, the HR department is now freer to analyse and interpret the reports in line with the company’s overall strategy.
“Because the solution releases HR from the administrative burden of maintaining and updating spreadsheets, locating information from multiple sources and handling training registration, HR personnel can now focus on proactive analysis of employee information and other higher-value activities.”
Kopoulos says integrated solutions can also help analyse people-related costs, including employee turnover. “Understanding turnover and its drivers can provide you with key information to manage staffing needs and associated costs,” he said, noting that company turnover, turnover by position, turnover by location, and team and position – specific turnover can all be measured separately. The right technology can take these metrics and allow HR to assess if the numbers are significant in the context of the changing labour markets.
“These KPIs can be benchmarked against industry and national statistics to access whether the turnover is acceptable in the current market,” he said. “Furthermore, you can overlay this data across demographics such as age, gender and length of service to assess any potential diversity issues.”
As the world moves into what will hopefully be a sustained economic recovery, many observers are asking what will be next for the information systems that are fast becoming the life-blood of HR departments.
The Watson Wyatt 2009 HR Technology Trends Survey has found that while the economic downturn certainly reduced HR budgets throughout the world, it also highlighted the need for new, improved, and above–all, comprehensive HR information systems.
The survey, of more than 14,000 US employees, found that almost a third of businesses report that talent management is now a higher priority. At the same time, more than half of respondents were planning to invest in more talent management technology over the next 24 months.
Watson Wyatt says the focus is likely to be on integration – with 46% of employers working to integrate existing applications and 27% planning a new integrated suite of technology products.
EmployeeConnect’s Kopoulos is not surprised. Indeed, he warns any business about getting left behind in the technology stakes. Even now, HR information systems are developing further to take on wider range of analytical tasks, he says.
“The trend is towards a new set of tools that interpret the business strategy into a measurable HR strategy,” he says. “That means functionality that will effectively put employee related activities on the balance sheet.”
“HR software will (also) become more intuitive, analytical, and predictive, with reports that give clear instructions to a user, based on a logical condition being met.
Technology in tough times
How can you make technology work for you when the economy is still struggling through a slow recovery? Make sure you consider these important tips.
- Update your HR Technology strategy: Consider the new systems available, the needs of the organisation and the options for delivery;
- Review existing HR technology budgets and determine the likely return on any new investments;
- Conduct a HR-systems audit to identify any gaps or double-tasking;
- Review internal strategies and policies to ensure HR focuses on core, value-add activities – not those that could ne done more efficiently by third parties