The promise of HR technology

The promise of HR technology

Article Type: Strategic commentary From: Strategic HR Review, Volume 9, Issue 1

Thought leaders share their views on the HR profession and its direction for the future

The HR department, it seems, is on a constant quest for influence and credibility. It has been variously portrayed as a Cinderella function, a necessary evil, a brake on the system, an unnecessary evil and, perhaps most woundingly, just a cost center. Though other platform services suffer in similar ways, HR tends to get the toughest deal in the organization. Among the many reasons for this include lack of visibility, accountability, strategic awareness, responsiveness, quality, engagement with the line and real voice in the executive suite. The solution, of course, is for HR to be smarter, faster, more strategic, more flexible, more efficient and more client-oriented, and if possible, all at the same time. What will also help is evidence – data into how HR is making an impact and its contribution in terms of practices and also overall. The rise of HR technology has promised to help in all these ambitions.

A familiar mantra is that for HR to be credible, and to gain a seat at the strategy table, it must do the basics right. Efficiency in HR service and delivery is crucial. Technology offers a way to make this happen, through the development of shared service provision, the simplification of processes, automation and, in many cases, the outsourcing of services.

HR guru David Ulrich has stated that HR technology mastery is a major competency for HR professionals, not least because the effective use of technology can bring greater efficiencies and allow HR professionals to concentrate on strategic activities. Further, the promise of HR technology is that HR can become, like marketing, a decision-science with “a measurable impact on business results.”

How HR technology can contribute

A useful way to identify the possible contributions of HR technology is to distinguish between operational HRM (the basic activities of HR, such as payroll and personnel data administration), relational HRM (HR practices such as recruitment, performance management, training and development) and transformational HRM (HR activity that is strategic in nature, such as transformational activities, knowledge management and strategic re-orientation).

There is little doubt that for the operational aspects of HR to work, the use of both information systems and e-HRM has significant impact in terms of efficiencies. Self-service or automated systems have helped to transform HR administration across the board, providing benefits in terms of record keeping and access to timely and accurate information. In terms of relational HR, the benefits to clients are also clear. There is greater speed, efficiency and consistency and access to knowledge has become better in many cases. All this with the proviso that line managers are trained and knowledgeable about the systems and that they do not feel dehumanized by the system.

Technology at the transformational level

But what about the promise of technology at the transformational level? There are two arguments here. First, HRIS support a more strategic role through the provision of better data to inform business decisions. Second, the move towards greater embracing of technology allows HR professionals to have more time at the strategic table. Regarding the first, certainly embracing technology allows HR professionals to have a greater understanding of the drivers of employee productivity and also to measure human capital interventions more effectively. As with any increase in the specification of analytics and evidence, more clarity on such metrics suits the language of the executive committee and increases the impact of HR-related decision making. But many of the analytics such as revenue and expense per employee, cost of hire, time to fill, absence rates and so forth have been around forever, without too much by way of HR image improvement. What still seems to be lacking in a systematic sense are the transformational analytics, the use of demographic data, dimensions of generational change and attributes, knowledge management and scenarios for strategic HR involvement. The promise is that technology will lead to new ways of organizing work, developing new knowledge and skills and building teams, but though this can be seen in a few elite organizations, widespread evidence of this is lacking. The second argument that HRIS will free up time for HR professionals to focus on strategic issues, remains elusive.

Technology has become an essential component in HR service and delivery and HR professionals must be technologically savvy individuals. But can HR professionals use the efficiency gains that undoubtedly come from technology use to drive credibility and address more strategic aims? For that, technology is one just key element; judgment and will are the others.

Philip StilesBased at the Judge Business School, University of Cambridge.

About the author

Philip Stiles is Director of the Centre for International Human Resource Management (CIHRM) and university senior lecturer in organizational behavior at the Judge Business School, University of Cambridge. He is a member of the university’s organizational analysis research group and the HR and organizations teaching group. His research interests are international human resource management, chief executive succession, and the dynamics of board behavior. Philip Stiles can be contacted at: p.stiles@jbs.cam.ac.uk