Technology Guide: eHR - Hi-tech mental blocks
Mary Cowlett, January 04, 2008
Research given exclusively to Human Resources magazine shows a high percentage of HR departments failing to adopt the technology that would improve their efficiency.
Audi has been espousing it since the 1980s with its slogan, 'Vorsprungdurch technik', which roughly translates as 'progress throughtechnology'. And in most areas of business technology has had atransformational effect.
Cue some familiar HR-bashing: according to research given exclusively toHuman Resources magazine by HR systems, services and consultancyprovider Qikker Solutions, the HR department still seems to becharacterised not so much by the 'haves' and 'have-nots', but moreworrying, the 'wills' and 'will-nots', when it comes to implementing HRtechnology. While many leading departments have implemented advancedelectronic or eHR systems to streamline their processes, (see casestudies in the rest of this guide), in the main, the HR function appearsto be resisting moving with the times.
The study shows that while there is high awareness of such tools asinternet-based talent management tools (75%), a whopping 70% ofcompanies admit they still depend on manual paper processes (see box,opposite).
"If you think of the employee life cycle across recruitment, assessment,performance management, learning management, career development andemployee engagement, in the majority of cases most processes are beingdone without a central database,' says Qikker's managing director, MarkBarlow. This uncomfortable fit between people management and technologywould be less significant if it were not recognised by HR directorsthemselves.
"I have a real problem with the whole idea of eHR. HR has failed tograsp the potential of technology and now plays second fiddle as aresult," says Michael Doolin, HR director at Geopost, the umbrella brandof Parceline and Interlink Express.
All of which begs some fundamental questions. Where is eHR going wrongand who is responsible? Are HR practitioners so unfamiliar with what thetechnology suppliers offer, or are there blocks further up the commandchain, from the IT and finance functions or senior management?
Doolin has his own answer: "HR has allowed itself to fall into aposition where the technology drives the function rather that the otherway around," he says. One other reason could be HR's apparent inabilityto explain what an integrated eHR solution can deliver. Of the 52 seniorHR directors who took part in the Qikker study, only 35% had prepared abusiness case for a talent management initiative that had subsequentlybeen given the green light. "This suggests the greatest barrier toadopting eHR solutions is a lack of clarity from HR in terms ofoutlining a compelling ROI," says Barlow.
Bio-pharmaceutical firm UCB, which employs more than 10,000 peopleacross 40 countries, says it has overcome this hurdle by focusing on keyperformance indicators. "We look at eHR as a tool for the wholebusiness, rather than just HR, so we measure how technology helps toimprove the performance of the entire organisation," says director ofglobal talent development Europe Michael Puri. This includesbenchmarking individual teams and competitors and examining evidence putforward by think tanks.
Puri has also developed sound financial arguments. Most recently, hedemonstrated how establishing a global online recruitment talent pool -using specialist software from Taleo - had dramatically cut the $1 million his firm spends each year on headhunting agencies in the USalone. Similarly Greg Aitken, global head of employee engagement at theRoyal Bank of Scotland -which, he says, prides itself on having a"single-view employee database that is also used by the financedepartment" - is able to prove that a 1% reduction in turnover, throughperformance management systems, will save the company 30 millionper year in hiring costs.
Other blocks to adopting eHR include lack of awareness, time andknowledge, while some HR professionals can be protective of their patchand worry about losing control of confidential information (see feature,p9).
Others are more vocal though, arguing that HR needs to grow up andembrace eHR as a driver of business change, rather than as a simpleadministrative aid. "If you look at something like the increasing use ofemployee self-service, technology only automates and moves tasks such asprocessing holiday requests or changes of address out of the HRfunction," says Chris Berry, managing director of software services anddata management provider Computers In Personnel. "But when you look atareas such as recruitment, where systems allow you to post informationon job boards and corporate websites, technology actually challenges HRthinking and transforms recruitment to more of a marketingexercise."
This view is echoed by Jason Boyle, director of HR operations atintegrated IT and communications specialist the KCOM Group, who says:"All this debate is really about is using technology in organisations toengage HR in a more strategic and services-oriented manner." In 2004,his firm invested in a system that provides employee self-service. Sincethen, it has integrated a new performance management process linked topay strategy, moved its flexible benefits programme online - and iscurrently in the process of launching I Recruit Total, an onlinerecruitment platform and portal. "As a result our headcount in HR alonehas dropped from the low 50s to 37," says Boyle. "We've improved ourservice provision, repositioned the HR team and added real value to thebusiness."
Similarly, Hilton Hotels has enhanced the strategic value of HR byinvesting around 20,000 in a web-based program developed byKenexa to help attract, retain and develop its HR people around theglobe. This involved identifying essential HR traits to formulate asuccess model based on job analyses, focus groups and questionnaireswith HR talent and general managers across the business.
Five years down the line, Hilton's vice-president for HR in Europe TeaColaianni says the business case was relatively straightforward to sell.Existing systems were all manual and the project fitted within herbudget. "Now that we've got this technology, ironically, the realstruggle has been finding HR professionals who can activate change andact as real business partners," she says.
For Hilton Hotels the budget was signed off centrally to the HR teambut, according to Alex Bartfeld, managing director EMEA of software andservices provider Softscape, eHR finance is not normally so freelyforthcoming. "HR directors often don't hold the budget for IT projects,so have to lobby either the finance or IT director," he says. He alsohighlights the perceived capital costs of investing in technology,despite the recent shift in distributing talent management applicationsfrom a licensing-purchasing model to a subscription or rental basis.
This, according to research conducted by database expert FileMaker, cancause the worst type of approach to eHR - what it brands as IT'free-styling' - where businesses think it is easier to customise andcreate their own mix of systems, which perpetuates the 'silo' mentalityof business processes. It found that 77% admitted this problem. It alsofinds one third of HR professionals lock away crucial companyinformation, typically on their PCs or in email, leading to workflow andcompliance problems.
"There are an awful lot of gifted amateurs out there doing their ownthing, and when you put IT in the wrong hands, it can be a dangerousweapon," says FileMaker's regional manager for northern Europe, TonySpeakman. "If different people are storing different data, not only areyou getting duplication, but HR is spending hours looking forinformation it already owns. In addition, how do you prove that you arecomplying with employee legislation, for example, or how do you identifywhere there may be a problem, such as absenteeism, that needs to befixed?"
The point is this: in the right hands, eHR ought not only improveeffectiveness, facilitate long-term planning and reduce operationalcosts, but ultimately it should also enhance productivity, driveorganisational performance and deliver competitive edge. "This meansbuilding something from the ground up with people who sit down and askhow you do your business, rather than tell you how to do your job," saysRoss Adams, sales executive at software and services provider Snowdrop."The questions organisations should be asking are: How will this help meunderstand my business? How will this save me time and money? And howwill this help me stay compliant?"
As the UK catches up with the significant take-up in eHR in the US, HRprofessionals need to ensure that web- based systems and programs arenot just automating existing ways of working. Real progress istechnology that provides the intelligence to take an organisation whereit wants and needs to go. And as Buckingham County Council HR directorRichard Ayres says: "If an HR person says to me: 'I don't do technologyor figures', then I say: 'You don't do your job'."
- There is 75% awareness of internet-based talent management tools, yet70% of organisations still depend on manual, paper-based processes
- 48% state the main barrier to implementation is cost and 52% believethey need to put aside capital expenditure to invest in eHR
- 65% of respondents considered their own HR technology competency to behigh versus a corresponding 27% level for their organisations
- There is nearly a 50:50 split between those organisations that hadinvested in eHR training versus those that had not
- Only 35% of respondents have successfully prepared a business case fora talent management initiative that has subsequently been actioned
- 74% of organisations surveyed have budgeted or are budgeting foreHR
- 87% felt that their IT department was supportive of talent managementinitiatives
- The CEO or MD is the most supportive of HR talent managementinitiatives. Work must be done to bring the finance and IT departmentson board
Source: Qikker Solutions 2007
Research was conducted by independent consultancy VMH Associates,through in-depth telephone interviews with 15 leading HR practitioners.In addition, 52 senior HR managers, directors and board directors acrossprivate, public and not-for-profit organisations completedquestionnaires.
One third of respondents work for companies that have a turnover inexcess of 100 million, 28% of respondents work for companiesemploying between 250 and 500 people, and a further 28% for thoseemploying up to 5,000 people.
NASCO SUCCESS STORY
Three years ago, health benefits processing firm NASCO had a paper-basedstaff-performance review system. In 2005, with the support of its chiefexecutive officer, the US-based company asked software and servicesprovider Softscape to streamline its processes and introduceefficiencies to better manage its workforce. NASCO brought all of itstalent management functions together in a single solution, enablingmanagers to link employee performance to company results.
"It's important people know what's expected of them, how they did, andthat they receive feedback to help their performance," says thecompany's manager of human performance development, Denise Peek. "Nowwe're able to give our people the tools they need to facilitatecommunication, bridging the gap between directed and undirectedperformance."
Indeed, according to its own research this summer, the firm has achieveda 38% improvement in its performance management processes as a result.Since then, NASCO has begun rolling out a new talent management andsuccession module, to encourage more knowledge-sharing and identifywhere organisational skills lie. Meanwhile, it plans to launch a360-degree review process this coming summer to improve employees'career development and learning opportunities. According to Peek, inputfrom existing staff and a structured training programme has been at theheart of the new system's success to date.
"That has been critical, and we're pleased that once people have learnedhow to use it they all agree that the HR system works well," she says.