Sound business strategy and smart technology can change the way people think about HR.
by Javier Perez, September 2013
The Conference Board’s annual survey of chief executive officers (CEOs), found human capital as the top global challenge in the minds of corporate leaders for 2013 (followed by operational excellence). In fact, human capital has remained among the top three challenges for the survey’s last few years.
Still, the role of human resources (HR) is often perceived as transactional and primarily providing administrative services. In a 2012 McKinsey study on human capital, “The State of Human Capital 2012,” business leaders ranking the services of HR departments gave consistently higher scores for these types of duties. Addressing this human resources mindset is indeed a challenge, but it's also an opportunity for positive change.
A transformed HR function enabled by state-of-the-art technology can significantly contribute to the success of an organization. According to the Conference Board report, leaders who do not have the right approach in place on the human capital side of the organization will struggle to be innovative, customer friendly, and operationally sound. The report says best-in-class companies are using technology to provide self-service tools for employees and managers, reducing the administrative burden of HR. And they are providing comprehensive help-desk or case management tools to shared services organizations that lower costs and improve the employee experience.
Technology offers human resources organizations an incredible opportunity to increase the value of HR by becoming a transformational force to drive business success.
Technology is addressing many needs of a new generation of workers by providing social tools for collaboration and productivity as well as mobile capabilities. Not surprisingly, the best companies rely on the best available integrated solutions for simplification and data sharing. And leading companies have been increasingly using cloud services to improve efficiencies, reduce and control costs, and help IT refocus its priorities on more strategic needs. According to an April 2012 report by Aberdeen Research on workforce management technology, 35 percent of best-in-class organizations used cloud services for HR in 2012, versus 18 percent of less successful enterprises.
Now the not-so-good news for HR professionals: Out of sight potentially means out of mind. All this automation can mean less direct interaction with HR and create the perception that human capital staff and their expertise are less relevant or not needed. It could end up being lonely in HR these days—unless the function succeeds at reinventing itself and changing its mindset.
One of my customers runs a very successful and fast-growing business services company. When the new chief human resources officer (CHRO) came on board, HR was still referred to as the “Personnel Department.” She has been working very hard the last couple of years to change that. By leveraging cloud technology to automate and integrate the company’s HR and talent processes in a cost effective fashion, she has managed to raise the profile of her group to that of a trusted partner and provider of workforce information to better manage the business.
Best-in-class HCM solutions can help HR organizations with this kind of brand rebuilding. These tools are built with leading-practice business processes and efficiencies in mind. Using cloud applications with intuitive and attractive user interfaces, can improve employee experience and have a positive effect on engagement and productivity (read: happier, more productive employees). And who is behind these happier employees? The chief human resource officers and their teams, who will be the visible the architects of this transformation.
Javier Perez is a director of Oracle Industry Strategy and Insight.
Managers who use technology to free HR professionals from administrative tasks help them refocus their role in a more strategic business capacity. HR staff become more active participants in strategy formulation, assessing the skills needed now and in the future, and providing strategic workforce planning to better meet business goals. With fully aligned goals, HR can devote more time and effort to effectively designing and updating talent management and transactional processes that will focus on engagement, operational excellence, and responsiveness to trends in the workforce.
Technology offers human resources organizations an incredible opportunity to increase the value of HR by becoming a transformational force to drive business success. Chief human resource officers should consider leveraging technology and the latest tools to redirect their efforts, so that everyone, more than ever, wants to talk to HR. After all, if the number one challenge in the mind of a CEO is human capital, why wouldn’t companies want to see HR take steps to address it?