A question of service

People inside and outside HR departments have been speaking for years about making HR strategic to business operations.

That HR can and should be a strategic part of any business' functioning is a no-brainer. How to free HR staff from mounds of paperwork and put them to use elsewhere, however, has proved challenging.

Says Business Connexion divisional manager of Q Data DynamiQue Rob Bothma: "Although HR has been pushing for this, it has not had the means or mechanism to do it. HR has been totally administration bound, running payrolls, leave, increase cycles and so on. There are two solutions: create two teams, one for HR administration and one for strategic HR, or look at how to get rid of the administration."

As it is highly unlikely that many organisations would be willing or able to support two disparate HR teams, technology has stepped in to fill the gap.

Adds Bothma: "Self-service technology has become an enabler and organisations are slowly beginning to adopt it. The technology itself is quite easy to implement; the difficult part is around the change management. This is one big mindset change. Self-service impacts the whole organisation. Everyone needs to be educated or you'll have half the staff calling HR and the other half using the self-service facility."

Self-service enables staff to check leave balances, apply for or approve/reject leave applications, and other basic administrative tasks that are time-consuming for HR, but not actually that complex to execute.

From self-service, the next step is manager self-service.

[Self-service] technology is quite easy to implement; the difficult part is around the change management.

Rob Bothma, divisional manager of Q Data DynamiQue, Business Connexion

Says Bothma: "Line managers work with employees, so a lot of HR functions can reside with them, but without the technological means to enable this, it was never feasible. For example, not all employees have PCs, but with manager self-service, staff can go to their manager who will interact on the system on their behalf. Because they know the people, you get a far more realistic view. HR doesn't know when people are going on leave or when they've been off and not submitted sick forms. So, if an employee phones in sick, the manager can delegate that part to his PA, who can then open a sick leave record on the employee's behalf; this way it cannot be forgotten. Once the employee is back, the system notifies them that they have an open transaction and that they need to submit a sick note."

This assists with issues like absentee management. Without accurate records and the software to track such records, it would be difficult to get a big picture on when absenteeism is highest or what it costs the company on a monthly basis.

"The whole performance management cycle, through manager self-service, can make each manager's staff assessments available to him online, and he can make these available to the employee. It thus becomes a living document that is updated continually, rather than just a form reflecting the last three months that people can remember," Bothma adds.

"By removing all of this, what you're basically saying to HR is that they need to play a consultative role in the organisation," he says.

"When a manager calls wanting to dismiss an employee, HR can advise on the process and procedure, and the correct way to do that rather than referring the manager to documents on the intranet. It's a minefield in any organisation and there are huge implications if such processes are not handled correctly."

Availability of these tools is not the problem, however. As Deirdre Stoop, product manager at Bateleur Software, notes: "I believe that it's very difficult for an HR department to make a business case for anything they would like to do because they are essentially a service to the rest of the organisation. If they do have the right kind of information that they can analyse, such as absence management, they can make a case because they can demonstrate that, with the right tools, they can save the company X amount of money."

On the other hand, says Shelley Freeman, solution manager at SAP: "I think HR, from a software perspective, has let organisations down. A lot of the HR software vendors focus on specific areas only. If you look at the whole talent management strategy that a lot of our clients are talking about, it's about pulling in performance management, recruitment and training as part of one talent management package. A lot of the software out there only deals with recruitment or performance. Business is taking a holistic view and the software needs to catch up.

"The problem is that everyone recognises that you need to measure people and that this is a function of HR. The problem up to now is that the data is inaccessible or is in so many places that you can't get to it. To transfer it to a data warehouse will be expensive and it will invariably be out of date because it's dynamic data. You need to be able to collect all the data that you do have wherever it is sitting in a unified way so that you have a single view of your staff."

Enter human capital management (HCM). According to Oracle senior sales consulting director Attie Taljaard, if you analyse the demands of today's business leaders, "it becomes obvious that they all indicate a concern for talent management, skills retention and other elements of human capital management.

"Whereas HR was a cost centre," he continues, "HCM is a profit centre. For HR to get a seat at the board and to be taken seriously, they need to put HCM across in terms of profits and losses, a way in which the financial counterparts within a company can use and understand. Whereas HR concerned itself with counting heads, HCM makes heads count."

HR analytics are increasingly being built into HR software. Says SAP's Freeman: "It gives HR much more insight into what's actually going on and it also forces HR to put key performance indicators (KPIs) in place, stakes in the ground in terms of where we are and where we want to be. HR can then use the analytics to measure progress, as well as look at things like the impact of the ageing workforce, skills shortages, and so on, and be able to plan around it."

Says Bateleur Software's Stoop: "It's important to measure people's contribution to an organisation. For years we have been measuring financial performance and production performance because we need produce at the lowest possible cost. It's now becoming increasingly important to measure the people in a company too, and analytical tools are what companies need to look at."

This is especially relevant in South Africa at the moment, since staff retention is important once employees have been trained. "We then [need to] plan career paths and find out why we're losing staff and what it costs the company. We'd not been able to measure that in the past because we've not had the tools," she adds.

Oracle's Taljaard points out that organisations should look at where traditional HR is and where these organisations traditionally are, and then compare it to the workplace of the future.

"In the past, your average worker was male, 45, married with two kids and worked for the same employer for 10 years; the baby boomers, in other words. In future, there will be more females entering the workforce [and already are], the typical age is 35, and there are a lot of divorcees; generations X and Y. There will be far more focus on work/life balance. You need to look at how the organisation plans to cope. It used to be very blue-collar. Future corporations need to be global, innovative, flexible. People today talk about positions, titles and hierarchy. In the future, it will be about skills and competencies. In the past, you looked at a salary. In future, you will look at total compensation."

Business is taking a holistic view and the software needs to catch up.

Shelley Freeman, solution manager, SAP

Organisations and their HR departments need to prepare for a generation that is always on and always communicating. People have a global view and consider it perfectly normal to have a social circle that spans three continents. They also consider it normal to collaborate, virtually, on any project, at any time, with anyone, irrespective of whether they've met them or not.

Says Taljaard: "In order to make the HR organisation a strategic partner in the future, HR needs to understand that the demographics of the workforce will change significantly over time. The average age will change, the number of contingent workers (temps and contractors) will change, a lot more people will telecommute, the number of women in the workforce will increase, and they will be looking for more flexible benefits packages; outsourcing is becoming prevalent globally.

"All of these things need to be taken into consideration by the HR department in managing the workforce towards the strategy of the organisation. With a more mobile workforce in future, it's about attracting, developing and retaining the right talent and getting rid of the dead wood that doesn't add value - and managing that."

It's, therefore, clear that to make organisations better in this respect, they need information and systems to make the relevant information available. Self-service takes the administrative burden away.

Whereas HR was a cost centre, [human capital management] is a profit centre. Whereas HR concerned itself with counting heads, HCM makes heads count.

Attie Taljaard, Oracle

"There is no way an HR department will become a talent management department without the right information and systems to supply it," Taljaard notes.

This leads us neatly back to next-generation HR systems and analytics. Companies wishing to keep up in future need to consider what HR systems they have and whether these systems are helping them out or holding them back. Legacy systems, often developed in-house, are common locally.

Perhaps it's time to take HR into the 21st century, where it can work hand-in-hand with other organisational systems.