While the HR system vendors continue to charge down the road of providing more upon more "depth" to their human resource (HR) solutions in the hope of selling their product as the HR departmental saviour, the changes in the nature of business are slowly overtaking the offerings of these HR systems.
So what does the next five to 10 years hold for HR executives, and how will HR systems need to change in order to support new business visions? As simple as it seems, the HR future vision must be built on the overall business vision. But this is not the South African reality even though HR and business executives would like to think it is.
There are five key areas that will drive strategic HR management over the next decade. These focal areas are supported to some degree by the HR software houses, but there are few indicators showing that they understand what is coming down the track. Two of the prominent enterprise resource planning houses, Oracle and PeopleSoft, recently released their latest versions of their HR offering, with most of the emphasis being placed on becoming fully Web-enabled and providing more of the same with regards to content.
Flexible workforce
If self-service is implemented properly, organisations could expect up to 20% savings in HR headcount and up to 30% decrease in transactional costs.
Rob Scott, manager, Deloitte Consulting
The first key visioning area is a flexible workforce. Not a new concept in some industries, but it has some new twists. The future organisation will shrink drastically to retain a very small group of "core staff". These will be the strategic thinkers and key knowledge holders; all other staff will essentially be non-core or fix-term contracted. Only the core staff group will have choices around career planning or succession planning, although the manner in which these will be administered will be different from today`s offerings.
The flexible workforce employee will be shared, not only within the organisation, but also externally within industries. It is likely that electronic industry portals will emerge to facilitate the sharing, alignment and development of non-core type employees. "Skills bidding" through electronic portals, similar to business-to-business purchasing portals, is an obvious extension.
Organisations will employ skilled employees through the industry portal, and will only provide critical skilling through "instant skilling" techniques. The flexible workforce will also be "omnipresent", not only in traditional 24-hour cycle shift jobs, but also through global shift operations in traditionally non-shift jobs such as a debtor`s clerk. Manufacturing type jobs will also in future be able to take advantage of "location fragmentation" or "work-from-anywhere" options as ubiquitous computing and modern plant designs emerge.
Pay for performance
The second key visionary area is pay for performance (PFP) rather than attendance - this could be a huge challenge for most South African organisations to implement. Key to this area is the automatic tracking and measurement of goals or deliverables. PFP will be used on all non-core staff and will replace the traditional performance management systems used today. It will be the goal measurement tool that will drive employee`s salary determination and not their connectivity to the organisation.
Instant payment
The third key visionary area is instant payment. Linked closely to the previous area, employees will be paid using the "cost of usage" model, which will be monitored by the PFP measurement tools.
If an employee only makes 80% of his goal, this would be reflected in his salary. Future payroll systems will continually provide a net pay figure per employee. No more batch runs. Employees will also be able to download their earnings as frequently as it suits them onto their smart cards through a self-service system, a Wireless Application Protocol phone, or any other form of connection to the HR system.
Self-service
The fourth key visionary area is self-service. HR vendors have seen the value in this area, but most South African organisations view this as phase X of their projects, citing the lack of sophistication of the majority of their staff to accept these tools.
If self-service is implemented properly, organisations could expect up to 20% savings in HR headcount and up to 30% decrease in transactional costs. The future employee will, however, expect more than the traditional personal, benefit and payslip information obtained through self-service, it will need to support concepts such as contract negotiation for non-core staff. It will become the contact point for specialist outsourced services such as legal advisors, councillors and other employee well-being services.
Self-service will also support the notion of "applying to work" which better suits the flexible workforce model than applications for leave does. The employee will also be able to link to the industry portal to obtain information on work opportunities within the current organisation and in the broader industry. Future skill requirements and available skilling programmes will also be accessible. Self-service will also provide salary payment, goal achievement details and deduction choices. Employees will be able to customise their self-service "screens", including the definitions of their own workflows or notifications.
Knowledge environment
The final key visionary area is the creation of a knowledge-based environment. This has got nothing to do with the owning of knowledge management, but has everything to do with the creation of a conducive environment for the creation and use of knowledge. Organisational structure flexibility will take on new dimensions, as will the formation of teams to support knowledge creation and usage.
The future employee will become totally responsible for his own development, marketing and utilisation. The current paternalistic styles of employee "ownership" will disappear.
The HR cynics will no doubt have a sizable list of reasons why this HR vision is not feasible, but let`s hope they are not the people driving future HR information system requirements.
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