The business of HR

7th October 2011

Human resources professionals and HR systems are going through a period of accelerated development, which is good news for the bottom line, as FSN writer Lesley Meall discovers.

The workplace today is very different to the workplace yesterday, thanks in no small part to a mixture of economic pressures and advances in technology. We are all under orders to do more with less, our personal experiences now colour our professional expectations of software and systems, and we all demand the same accessibility and ease of use wherever we are and whatever we are doing. So it is hardly surprising that the management of ‘human capital’ is rather different to the management of human resources. HR professionals and the software and systems they rely on are both going through a period of accelerated evolution, and what is expected of them is changing inside and outside the HR department.

 ‘Because workforce challenges are constantly changing, so are the challenges facing HR,’ says Karen Bull, product strategy manager at Midland HR. ‘Over the past few years, HR has been whittled down into a proper business partnership role,’ she adds, ‘and HR people now have to walk the walk and not just talk the talk.’ This perspective is echoed by Dee Caporali, sales director with the HR software vendor Access Select: ‘There is an expectation that HR people and HR systems will have a positive impact on the bottom line,’ she says, ‘and there is a move among HR people to align themselves with changes in the business, such as increases in profit or revenue, and to prove that this success is linked to HR strategy.’

Back in 2007, a study by the Chartered Institute of Personnel Development (CIPD) found that 46 per cent of large HR departments had already restructured service delivery to reflect their new role as a ‘business partner’, and even small organisations saw the need to view their role in a more commercial light – and this trend has progressively become more widespread. The days when HR was just a support function and HR systems were about just reducing the admin burden have passed. ‘Everyone in the business now interacts with the HR system to a greater or lesser degree,’ says Caporali, and it now needs to support everyone in the business, so what they expect from HR systems, and what they are capable of delivering has evolved. 

‘When employee self-service facilities were first rolled out, their use was often limited to basic admin tasks,’ reports Bull. The possibility existed for them to be used much more productively than they were, and although individual workers took over low -value, unskilled HR admin work (such as changing bank details), the self-service ethos didn’t spread much further until more recently. But HR systems are now being used to automate entire processes, and self-service functionality now extends to line managers too. ‘By building best practice workflows into HR systems you can give people the ability to do things without understanding the processes,’ says Richard Anderson, sales director with Cascade HR, which can bring some significant benefits. 

‘HR can decide how it wants to handle processes such as adding a new member of staff to a department, or taking disciplinary action, and then map this into workflow,’ he explains, and the system will then guide managers through the process, so they can do these things without needing to remember how or understand why. ‘People just do what the system tells them to do,’ adds Anderson, which can be liberating for them and HR. ‘It’s easier to react to feedback from the workforce and then improve and refine processes,’ he suggests. Changing the workflow is much less challenging than trying to explain to 100 people why they need to do things a slightly different way, let along get them to do so. 

Technology developments have also made it easier for HR to ensure that people are doing things when they are supposed to. ‘HR used to have to pull information out of the system and then send it to managers. Now they have access to dashboards, HR can manage on an exception basis,’ says Caporali. Take absence management, for example. ‘HR can set up a dashboard to show live information on it, and the system will highlight things such as employees with more than three or four absences in a month, and then automatically send the manager an email, prompting them to do something about it,’ she explains, adding: ‘Because they don’t need to push paper around the system any more, HR is becoming a much more skilled role.’ 

The ease with which data can now go in and out of HR systems, makes turning it into information less arduous too. ‘Built in tools such as scorecards and key performance indicators help HR to correlate the statistics with the strategic, so HR is becoming much more data-driven and analytical,’ says Caporali. ‘HR reporting isn’t about measuring processes any more,’ adds Bull. ‘In the past, when HR ran reports on the workforce they looked at things such as which line managers had completed their appraisals. Now they’re more likely to be looking at real performance data,’ she says, ‘analysing it and illustrating what its impact is,’ so that other parts of the business can use this information to make more informed decisions about the future. 

This allows HR to demonstrate that its interventions add value. ‘Knowing how many high performing or low performing employees the business has, can help HR to align performance objectives with organisational objectives and operational goals,’ says Bull. ‘Being more analytical about workforce data means that the business has a better chance of achieving “X” in customer service or “Y” in sales output,’ she adds, and it helps to position HR as more strategic. ‘HR professionals have always believed that they were strategic and could affect the bottom line,’ says Anderson, ‘but it was difficult because they didn’t have the systems to support this.’ Now that they do, the entire business can benefit.