Head in the cloud? Why HR is moving on demand

Denis Tournesac, Executive Vice President OnDemand at NorthgateArinso, examines the impact of the economic climate on HR’s technology.

The global economic downturn has brought about interesting times for the HR team. We only need to open a newspaper to see stories of job cuts, recruitment freezes and absent bonuses. Employees are worried about the future and the fate of their company, which doesn’t lead to a happy working environment. All this leaves HR dealing with staff cuts, while managing the needs of those people left behind.

Keeping staff motivated and managing the talent that will lead the business through the economic storm and out the other side is a vital part of HR’s remit, but it can be difficult to focus on the long term when so many immediate demands are being made.

When CEOs are looking to cut overheads, justifying the HR team’s time and resources is more important than ever. Reporting is crucial as a means of demonstrating HR’s value to the business and technology can have an important role to play in helping the HR team operate as efficiently as possible.

However, at a time when budgets are stretched, how can HR choose between the myriad of technology delivery models on offer? The average HR manager wants a global view of HR, as well as in-depth local knowledge and expertise that’s not bogged down in admin. But is it possible to have your cake and eat it?

Sign of the times
The recession brings with it fewer opportunities for extensive capital expenditure. The initial layout for a big software project can be huge and updating existing systems is seen as a ‘non-urgent’ task that can wait until more secure financial times.

Conversely, good technology for transparent reporting is more important than ever. The HR team has to be able to respond to the rapidly changing HR requirements of a business, and that means downsizing or upscaleing technology quickly.

As a result, now is a good time for managers to be looking at alternative models of software delivery, including software delivered ‘on demand’, which can be well suited to recessionary times.

Monthly bills rather than a large initial payout are an attractive proposition for the finance team, and broadband Internet is now standard across business. This combination means that HR managers should be taking a serious look at the on-demand delivery model for support processes.

Going on demand
On-demand technology is nothing new. It comes under several different names – cloud computing, utility computing, software as a service – but all have the same basic attributes. Thanks to companies like salesforce.com, it has already proved it can work for applications like CRM and marketing. However, there’s no reason why HR shouldn’t enjoy the same benefits.
Users are much more demanding of workplace technology than they were a few years ago. IT used to be a bit of a mystery, and as consumers we expected slow running systems and broken down hardware in return for the ability to automate much of our work. Nowadays, we go home and happily log in to Google and Amazon.com, where the interface is easy to use and simple to navigate.

As a result, it’s no longer acceptable to go into work the next day to use clunky, complex technology for work. Most HR professionals aren’t IT experts, and don’t expect to be bogged down in complex procedures. A good on-demand system has got to have a good user interface to be successful.

Given the amount of time users spend working with a particular system, they need to have a clear screen that can be customised to show the information they need. We also expect applications to ‘just work’ – it should be clear how to access information, and how to save and store details. An intuitive system rather than one that requires detailed training is no longer a nice to have, it’s crucial to the success of any IT system used by non-IT people.

Weighing it up
However, it’s important to remember that when it comes to HR support, one size certainly doesn’t fit all. The benefits of an on-demand system are clear, but a business considering an investment should be careful to look at all available HR service delivery models, and weigh up the right choice for them.

On-premise software is reliable and scalable, so it is still the model of choice for large enterprises. There was a time when HR modules in large ERP implementations were cumbersome and difficult to use. That’s no longer the case, although there’s still work to be done to shake off this reputation.

Another factor to consider when implementing IT to support HR is what it’s actually going to be used for. It’s often assumed that IT will support the processes and admin that so often weigh the HR team down. Traditionally, the biggest benefits for HR have been felt when admin like absence requests, tax forms and employee information have been automated.

This is still the case, but HR directors also need to look at how IT can support the more strategic part of HR. As we’ve already said, talent management is very important to the business during recession, and there’s no reason why this can’t be supported with the right IT platform.

Another, more strategic part of HR that needs to be addressed is succession planning. Over the next five years, the post-war ‘baby boomer’ generation will retire, and unless companies are prepared, they’ll take with them a huge amount of knowledge and experience. This ‘knowledge crunch’ could well hit businesses just as they’re recovering from the recession, and managers need to be preparing whoever will take the place of these managers. Again, the long-term view of the business can’t be ignored, and HR directors should be looking to technology to manage some of these processes.

We launched euHReka OnDemand to help HR directors manage admin and reporting, as well as the more strategic parts of the business. We wanted a clean, simple user interface and a choice of modules so HR teams could pick and choose the aspects of HR they want to use the product for.

Having it all?
Just because the economy is in a bad way doesn’t mean investment in new systems to improve efficiency should stop. In fact, it’s more important than ever for reporting to be transparent, in order to improve talent management and competence management processes.
Ultimately, the Board only talks in numbers, and if they can see the direct financial results of the work HR is putting in, the team can justify its role a lot more easily.

The HR director looking to do this should carefully weigh up all the options available. On-demand technology can help manage costs, and is more easily scalable than some other delivery models. However, different models suit different companies, and on-premise software has moved a long way from the expensive dinosaur it once was. What is important is that when the right system is up and running, it helps prove HR’s value to the rest of the business at a time when the team is needed more than ever.