HR technology has changed almost beyond recognition over the last five years.

Most people are now familiar with the idea of employee and manager self-service. Over the last 5-10 years, the web-enablement of HR software has allowed organisations to make HR administrative processes such as holiday and sickness notification, training administration and expense claims available to anyone with internet access.

It has been a minor revolution in HR service delivery – whereas once, employees and managers had to fill in forms manually and create a paper trail, much of the administrative work can now be automated, leading to lower costs and improved service quality.

Because of the internet, we"e;ve probably seen more technological changes in the last five years than in the previous 20 years; yet in HR, we"e;re only just getting started. The next wave of internet technology will see the introduction of new tools, capable of putting real power in the hands of managers, changing workplace relationships and raising the contribution of HR. With it will come new challenges and opportunities; whether you"e;re a technophile or a technophobe, it will be impossible to ignore its impact?

Even smarter administration

In recent years, HR has been pushed to reduce operational costs and improve service levels. In response, it has turned to both organisational and technological solutions to simplify administration. Organisational solutions, such as outsourcing and shared services, focus on how and where work get done (with some success), while at the same time e-HR technology (i.e. electronic HR services) has been introduced to automate business processes. This type of process technology is now common in organisations and self-service has become a standard way of delivering HR transactions.

In the early days, an HR system was literally a system used by the HR function. The internet changed that and opened up systems, enabling employees and line managers to carry out their own HR administration. However, those without access to a computer at work are generally excluded from using self-service, limiting e-HR services to office-based staff or via a public kiosk arrangement. However, as future technologies converge, access to HR services will become widespread and more cost-effective. Some organisations are already looking at ways of combining portable technologies such as PDAs, mobile phones and similar devices with employee self-service tools.

As employees get greater internet access at home (already, 93 per cent of the UK adult population use the internet and broadband use now far exceeds dial-up), not having a traditional computer will no longer be a barrier to self-service. Self-service will also provide richer contextual information to support complex processes, such as flexible benefits and expenses administration, with employees able to perform advanced “what-if” calculations with little HR support. Plus more intelligence will be included in self-service systems, to guide people through processes and make the experience seem more “human” and e-HR will be used to form communities, such as enabling ex-employees and retirees to stay in contact with the organisation and become a channel for communications.

This includes forming stronger links with third parties such as recruitment agencies and retailers to offer deals to employees and exchange information. Finally, case management tools will support outsourcing and shared service centres.

Power in the hands of managers

Organisational leaders now expect HR to be more strategic and add more demonstrable value. The “Ulrich model” has been implemented in many organisations and HR has started to use different language such as “agent of change”, “employee champion” and “business partner”. The ideas behind Human Capital Management (HCM) are leading to a greater focus on creating measurable value through people, with the result that HR technology must provide solutions that help HR work in this new way.

While the 1990s and early 2000s were about using technology to improve processes, another branch of e-HR, Human Capital Technology (HCT), is concerned with giving managers the tools they need to manage people. For example, when most managers are asked about people management, they complain that there is a lack of basic data about staff, not just pay and biographical data, but critical information about skills, training, performance, capability and development. Getting this information from HR is usually painful (or impossible), so most managers tend not to bother, resulting in weaker decision-making processes. As a result, in many organisations, managers feel disconnected from people management, making it easier for them to abdicate responsibility and ending up with the HR team taking on the people management role.

Human Capital Technology will be far more powerful than process technology – by giving access to information and processes directly to managers, they not only get the information they need, but when they are also involved in designing the tools, they get a better understanding of how HR works. This gives organisations a chance to shape how managers manage, the decision support tools they use and the relationships managers have with their teams. Some examples of HCM technologies include:

Measure it, manage it.

Perhaps the biggest change in technology will be in the area of workforce analytics. Technology has a critical role to play here, perhaps its most important ever. The latest generation of reporting tools go far beyond the traditional paper reports delivered routinely to managers – the latest web technology can put high quality, accurate, timely and relevant data directly onto each manager"e;s desktop. Managers can focus on priority Key performance Indicators and use the tools to analyse further and make decisions.

This may include absence, turnover and vacancy data, in fact, anything held in the HR database, which can be presented in a graphical format. It finally delivers what HR and T&A systems always promised – good management data, well presented, that managers can use for planning and operational management.

The best tools also allow organisations to set up “scorecards” or “dashboards”, so that when certain data jumps outside the agreed limits (say absence or turnover levels) “traffic light” systems alert the manager to the problems. This means they only need focus on what is important. This type of analysis will become so important to good management that virtually all organisations will use these tools to drive their business.

A Portal for Everyone

Portals have been around for some time but have historically been very expensive. That will change in the next five years. Organisations will use portals to contain all the HR activities and information needed to put managers firmly in control of their people. Essentially, a portal brings together human capital reporting, employee profiles and scorecards, as well as the traditional transactional functions, access to policies and procedures, news and communications, knowledge databases and external links. All this will exist in a format that managers can customise to meet their own needs, allowing them to view key data through their desktop. This leaves HR to get on with strategic work.

Be careful what you wish for…

While many customers for HR technology have become very sophisticated in their awareness of what"e;s possible, in some ways Europe has been relatively slow to exploit the benefits of HR technology, at least compared with the US, where self-service is now standard equipment practice. In some European organisations, the basic concepts of employee and manager self-service are not well understood and there is a fear that technology will somehow de-humanise the workplace. HR staff can become so strongly focused on people issues that they have a blind spot when it comes to using technology. In fact, there is a view that technology isn"e;t real HR work!

However, one US study found that the greater use of technology is associated with a strategic HR role. Although simply having technology doesn"e;t make you inherently more strategic, strategic organisations tend to use technology in better, more valuable ways. Significantly, the study found that HR is most likely to be a full strategic partner when effective HR technology is in place, not just because there is access to better strategic data, but because it increases the reach of HR, making line managers more self-sufficient and improving communications across the organisation.

In the HR future, organisations will really have to understand what technology can deliver, not just in terms of automation. Technology is fast becoming an important HR competence because of its power to enable more strategic forms of HR. As technology develops and is able to provide the tools and data needed to support good management, HR must become a champion for technology, working with managers to define the benefits and demonstrate the “art of the possible”. The really smart HR people of the future will be highly technology-aware, with a clear idea of what they want from systems and the ability to manage the changes technology brings.