Human Resources: Executive Summary: Workforce Technology

As if they were some sort of evolving nervous system for organizations, HR information technologies continue to become more sophisticated and integrated into a variety of HR management duties. This evolution doesn't always go smoothly, as organizations struggle with everything from budget overruns to system incompatibilities, but HR technologies do seem to be gaining greater capabilities every year.

One of the most fundamental trends is the use of the Web to deliver HR services. As recently as 1999, relatively few surveyed companies were providing online employee benefit enrollment, according to Towers Perrin's annual surveys. By the end of 2001, over half (60%) were, and as of 2003 the number was up to 73%. By the end of 2004, 90% of respondents expect to provide online enrollment.

Already, 90% of responding companies give employees access to Web-based 401(k) information and transactions, according to Towers Perrin's sixth annual HR Service Delivery Survey of almost 200 of the world's top organizations. Most (89%) also permit workers to change their personal data on the Web, up from 66% in 2003.

Such systems may result in significant productivity increases among HR professionals. The Towers Perrin survey finds that employee self-service and manager self-service reduced HR's administrative workload at 60% of the participating companies, and manager self-service reduced it at almost half. "This shifting of administrative and transactional work to self-service frees HR professionals from mundane tasks and allows them to focus on opportunities to add value to the organization on a strategic level," said Thomas Keebler, a Towers Perrin expert in HR service delivery solutions.

In 2003, companies were more likely to upgrade existing human resource information systems (HRIS) than to install new applications, though HR technology budgets did climb by 4%, according to AMR Research. As for 2004, just 20% of U.S. companies planned to make major HRIS purchases, according to a poll conducted by the Society for Human Resource Management.

For most organizations, the goal seems to be to enhance existing systems. Increasingly, companies want to use their systems for strategic human capital management by mining and analyzing data that is useful for performance management and workforce optimization and alignment. About a third of surveyed companies said they planned to implement workforce analytics, according to a study conducted by Aberdeen Group. The challenge is to ensure that there's a genuine link between what's being measured and the organization's larger goals.

Of course, employers should beware of anyone who says building or even modifying a system is easy. In 2003, Standish Group International Inc. published a study of 13,522 information technology projects. It found that just 34% of all projects were successful. While this seems like a dismal rate of success, it's actually a huge jump from the 16% success rate of IT projects in 1994.

It's little wonder, then, that some firms want to outsource the whole headache. Half of the revenue of outsourcing firm Exult Inc. streams in from businesses that had already created an HR system of their own and then wanted to turn it over to a third party, according to CEO Jim Madden. "In some cases, maybe they tried something five years ago and have hobbled along with it since," Madden told Workforce Management. "In other cases, they have a more recent system and just want to move on."

Ultimately, of course, most of today's HR professionals must be willing to immerse themselves in HR technology to some degree. It has simply become part of the job. HR professionals have also got to become proficient at purchasing, utilizing, and sometimes implementing these technologies. This requires knowledge not only about technology but about project management, work processes, data usage, and security procedures. In addition, HR professionals must be able to effectively manage the scarce talent that creates and maintains HR systems.

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The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.