Flexing the arm of HR

HRM’s Leslie Knudson speaks with Lisa Rowan, IDC’s Program Manager for HR and Talent Management Services, about the crucial role technology plays in augmenting the HR function and how technology is helping to strengthen the ‘human’ aspect of HR.

The core concept may seem like a contradiction in and of itself – using technology to drive human performance – yet the HR technology market is becoming saturated with a variety of technology, ranging from e-recruitment software to self-service portals to talent management suites and beyond. The challenge for organizations thus lies in understanding how to utilize technology in such a way as to minimize the efforts spent on manual tasks while freeing resources to concentrate on improving employee touch and relations.

What organizations need to realize however is that streamlining the workflow of HR through automation doesn’t directly translate to improving the quality of applicants or the quality of hiring decisions. Rather assigning tasks to technology should be a careful delegation that allots HR departments to devote more of their resources to the key processes that require greater attention and will ultimately produce better recruitment and performance results.

With hot consumer technologies already banging on the door of HR – blogs and iPods are being cited as the next major trends that will make their way into recruitment and employee management processes – we took a step back from examining individual technologies to get a bird’s eye view on the overall impact of HR’s evolving marriage with technology.

Pairing HR with technology

In recent years advancements in technology have significantly altered the function and role of HR by enabling it to shift its energies away from trivial nuisances such as paperwork and other time-consuming manual processes that can bog down the department, and place greater focus on the core processes driving HR.

Lisa Rowan, IDC’s Program Manager for HR and Talent Management Services, echoes the fact that this shift of focus is enabling HR to steer away from worrying about process details. “Recently we’re starting to see a more rigorous automation around functions that have never been automated before like performance management, so it’s actually enabling HR to lead the pack in terms of doing a better job at performance management because it’s not so much about the process anymore.”

“In the past when you’ve had a totally paper-based process, you worried more about compliance and making sure that management gets their reviews done, etc. and there’s not that much attention then being paid on the frequency to how often performance management gets done or to the ways in which feedback can be provided, and so on. The technology is actually a real boon because it’s not only getting rid of some manual processes but at the same time it’s helping HR do a better job at the function itself.”

Technology has lifted a large burden off the shoulders of HR, largely evident in the realm of talent-related functions, to make for more readied decision-making and improved performance management practices. Rowan cites recruiting as being one of the strongest cases for how technology has improved the HR function. “We’ve come so far [with recruiting] and now we really have a better overall process for selection because you pay more attention to the selection and the criteria that you use for choosing top performers than you do worrying about how to process the paperwork.”

Reigning in new technology

Identifying which core processes can be assigned to technology is a conversation that goes hand in hand with what processes can be outsourced. “I think it has to do with culture and it goes alongside a discussion of what could be outsourced,” Rowan says. “If you take a look at everything the HR department does, you should assess whether it is core to driving either a business improvement or whether it actually serves to improve retention. If it doesn’t meet those criteria, chances are that’s a possibility that capability can be outsourced.”

Yet beating the competitors to the punch with the latest technology has its ups and downs. Daring to be the guinea pig in terms of enduring early implementation pains that other have not yet experienced in relation to the new technology does have its drawbacks. But giving yourself an edge over the competition with a new tool in your arsenal is a risk some companies are willing to take.

Ultimately, adopting the latest advancements in technology offers a quantifiable competitive advantage if organizations can demonstrate quick turnaround in putting the technology to use from the get-go.

“Not everyone adopts the same technology at the same time,” Rowan says. “So, if you can stay ahead of your competition in terms of deploying the latest and greatest in those regards then you continue to have an advantage. We’ll never see a scenario in the industry where everyone has adopted the same technology at the same time so there are always laggards and early adopters. Early adopters, to a certain degree, have to go through some of the growing pains associated with some of the newer technologies but in the end they are ahead of the game in terms of beating their own competitors to the punch.”

Where organizations consistently fall short with fully and properly utilizing HR technology after implementation comes from ineffectualness at realizing the expected ROI of investments. Yet measuring ROI of such different technology systems depends upon the nature of each process that is being automated.

Rowan stresses that determining ROI depends on the system in question. “If it is a compensation or rewards system, you would keep track of factors such as linking performance with turnover, if you can keep track of who your top performers are, keeping track of whether you’re holding onto them longer than you used to hold onto them, whether you are attracting high quality candidates, etc. Every one of these will have a different set of metrics that could vary by industry and clearly vary by organization. It requires sitting down and figuring out ahead of time what it is that you as an organization see as success or measure as success and then setting up metrics that mirror that.”

Execution of the process is also critical to producing the greatest ROI from new technologies. For example, the growth of employee self-service and manager self-service applications have expanded use of the web for delivery and utilization of HR applications on a service basis. While this should directly result in greater convenience and improved usage for the employee, the level of overall employee communication and satisfaction will be determined by how effectively the process is executed.

“If it’s done effectively, I do believe that it leads to a higher level of employee satisfaction because employees don’t have to stop and think, “I need to call HR because I can’t figure out how to do this,” and what have you. It’s all in the execution. If it’s poorly executed and it still ends up with frustration, then your employees are going to be thinking they’re not getting the right tools to be enabled to do it effectively so it’s taking them longer and then they wish they could just pick up the telephone. So again, it all has to do with, and hinges on, execution.”

HR challenges for technology

Looking at some of the challenges facing HR, Rowan feels that customization is one of the most pervasive hurdles. “I believe that HR generally is too customized today. Most of the systems that are out there have been too highly customized and that’s a big challenge. My word of advice is that when you’re implementing or re-implementing or you’re looking at new technology or a new vendor, that you step back and really take a hard look at what you’re trying to customize and whether it really needs to be customized.”

Rowan also notes that customization can significantly slow down processes or even halt adoption. “It’s very costly because every time the vendor issues a release, you have to worry about your customization. It slows down your process and sometimes causes people to hold back and not adopt the latest versions of vendor software. So I think that’s one area where HR really needs to push back on its internal organization as well as its own processes. They need to take a look at whether they could possibly be doing it much more easily and efficiently if they take it as it is delivered.”

One of the greatest challenges HR will be meeting head-on in the near future is a much larger problem than customization. The Baby Boomers, a massive generation that accounts for approximately 80 million American workers, is nearing retirement age and threatening to produce a drastic worker shortage.

“The demographics and the numbers don’t lie about the fact that, not only in the US but throughout the world, we’re going to have some challenges around having insufficient resources to get jobs done,” Rowan says. “Companies will be competing for a fairly tightened pool of applicants for jobs so there will be stiff competition. Technology’s role will be to enable prospective employers to act much more rapidly to make a selection of a candidate and get that candidate on board as quickly as possible.”

Industries that are predicted to suffer the greatest setbacks from worker shortage and the pending baby boomer exodus are poised to offset the challenges by embracing technology. “Particular industries will suffer more than others when it comes to early retirement and some of the boomers leaving the workforce,” Rowan says. “Those include the utilities segment, the manufacturing segment, almost anything in the public sector, the government, because of the fact that usually public sector and government agencies have fairly attractive pension plans so the retiring age seems to be younger than in other industries.”

“Technology is going to be able to help the organizations pinpoint where the critical talent is needed in the organization, workforce planning if you will, and that’s going to be critical because organizations are going to need to do an awful lot of upfront planning in order to not be caught short. Last but not least, I think technology will also play an important role in helping employers identify top performers, rewarding them appropriately and hopefully improving their ability to retain them.”

Future trends in HR technology

The HR sector looks to continue to adopt technology at an increasing rate well into the future as well as follow the trend of outsourcing.

“I do think that there’s going to be continued interest in outsourcing with a particular eye towards specific and point scenarios,” Rowan says. “I think there’s going to be an uptick in looking externally to outsource. For example, as we get deeper into what looks like it could be an emerging or reemerging wealth of talent, I think organizations will be looking externally for help for more of the recruitment processes.”

Rowan also sees consulting as a burgeoning area. “I also think that HR is going to be seeking quite a bit of consulting in the coming years around the areas pertaining to rewarding and compensating the workforce and assessing the workforce. So there will be an uptick of interest in consulting in that space along with investments in technology.”

In terms of technologies, HR is predicted to leverage the latest consumer technologies for use in the employee lifecycle – from podcasting and blogging in recruitment, to computer games for orientation, to iPod videos for leadership training, and so forth.

Overall, Rowan sees further adoption of technology down the road and a continued trend of automation. “For the first time we have four generations in the workforce at the same time. However, there are a lot of what you would call Millenials or Gen-Yers coming into the workforce and they are used to being online, where everything is at their fingertips, and they’re the workers of the future. So I think that the more we can automate, really the better, because it’s going to play right into the population that’s entering the workforce.”

Lisa Rowan serves as IDC’s Program Manager for HR and Talent Management Services research, providing expert analysis focused on human resource consulting, processing services, and Business Process Outsourcing (BPO) services, systems integration and IT consulting.

Prior to joining IDC, Ms Rowan held director positions in both business development and marketing within Genesys, and positions in both technical marketing and IT at Digital Equipment Corporation.
Ms. Rowan serves on the board of directors for the New England Chapter of IHRIM (International HR Information Management society).