Chapter 17

Chapter 17

The Future of HRIS: Emerging Trends in HRM and IT

WHAT IS THE FUTURE OF HUMAN RESOURCES TECHNOLOGY?

• Technology has changed the world, in general, and the world of human resources– Employees can work anytime and anywhere– HR has shifted to a more strategic focus– HR still has administrative responsibilities– Delivery of software as a cloud-based application has

enabled any-size company to take advantage of efficiencies and effectiveness of strong HR systems functionality

– However, the implementation of an effective HR technology solution is still a challenge. Requiring leadership, communications, management buy-in, and competence.Kavanagh, Human Resource Information Systems 4e.

SAGE Publications, 2018. 2

FUTURE TRENDS IN HR MANAGEMENT

• Health care• Business intelligence• Demographic workforce changes• Complexity of legal compliance• Virtualization of work

Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018. 3


Health care• Rising health care costs were identified by nearly

90% of executives surveyed as an important challenge facing their organization in the next 2–5 years

• Chief financial officers identified health care costs at the number-one issue facing their organization



Health care• Passage of the Patient Protection and Affordable

Care Act (i.e. Obamacare) – HR departments are facing a number of issues associated with its implementation. – The new law makes some provisions of these plans illegal if

they are not available to lower-compensated employees as well. In addition, organizations will have to consider the penalty costs of not offering health care to employees and the makeup of their workforce (e.g., full-time, part-time, or contingent) as they determine how to best comply with the new law, as well as offering plans that best serve their employees.



Business intelligence• HR is increasingly turning to the use of business

intelligence to support complex metrics. Although covered in greater detail in Chapter 7, we also discuss data analytics and HR metrics here because they are growing in importance to HR departments in most large organizations.

• Many organizations already have basic reporting capabilities, but they are increasingly looking to incorporate more sophisticated metrics.



Business intelligence• Metrics

– Organizations will increasingly demand that HR better measure and assess the value of their human capital initiatives.

– The increasing use of metrics may lead to a standard and widely accepted set of metrics to “describe, predict and evaluate the quality and impact of HR practices and the productivity of the workforce.”

– Organizations begin to transform their view of HR, from that of a people function to more of one focused on decision science.



Demographic workforce changes• More women and minorities are entering the workforce than

ever before. For example, nearly 60% of working-age women are now in the workforce, compared to only 40% in 1970 (Bureau of Labor Statistics, 2011).

• Growth in the Hispanic American (Hispanics) population in the United States. Currently, Hispanics make up 15% of the U.S. population and account for more than half (50.5%) of its population growth (Pew Hispanic Center, 2010). They are also expected to compose at least 25% of the population by 2030 (U. S. Bureau of Census, 2009).



Demographic workforce changes• Baby boomers are postponing retirement. Recent data from

the Bureau of Labor Statistics suggest that the fastest-growing age groups in the workforce will be those over 65 years old, with projections suggesting that participation of those over 65 will have grown by over 80% between 2006 and 2016 (Bureau of Labor Statistics, 2008)!



Complexity of legal compliance• The pace of regulations continues to grow. For example,

the EEOC continues to develop additional guidelines, and states continue to pass additional regulations on issues as varied as hiring practices to workplace safety. In addition, the recent negotiations due to the recent “fiscal cliff” have resulted in a change in the Social Security tax rates for all employees and the raising of taxes for high-earning employees. Human resources will need to be prepared to implement these changes, and additional changes are likely to occur in the coming years.



Complexity of legal compliance• Changes due to the new Patient Protection and

Affordable Care Act will require human resource departments in organizations from the very small to the Fortune 100 to comply with a myriad of federal requirements and very likely state mandates as well.



Virtualization of work• No longer are employees confined by physical or

temporal space. Employees can conduct work anywhere and at any time. “The virtual workspace can be defined as an environment where employees work away from company premises and communicate with their respective workplaces via telephone or computer devices” (Lockwood, 2010).

• Text - Figure 17.1 lists several keys to managing virtual meetings successfully.


FUTURE TRENDS IN HUMAN RESOURCES INFORMATION SYSTEMS (HRIS)

• Bring your own device• Software as a service (SaaS)• Service-oriented architecture (SOA)• Web 2.0• Social networking• Enterprise portals• Open-source software



Bring your own device• The change is a dramatic departure

– Previously, the most common arrangement by organizations was to manage a centralized and tightly controlled technological platform (e.g. IBM, HP, Dell, Windows, etc.), and anyone who wanted to use another platform (e.g. Mac, Linux, etc.) would potentially have problems receiving adequate support.

– But today, employees are more likely to want to use their own personal mobile devices (e.g., smartphones, tablets, and laptops)



Bring your own device• In a recent Forester research survey, nearly 70% of

employees noted that they would like to be able to bring their own personal mobile devices and use them at work (Forrester, 2012). Gartner also predicts that by 2013, mobile devices will become the most common technology used to access the Web, even surpassing PCs (Gartner, 2012).



Bring your own device• Privacy issues become important: For example, how do you

deal with the privacy issues associated with the storage and use of personal and work data on the same device? In addition, the complexity of managing network and data security dramatically increases when employees bring their personal devices into work, which means that organizations will need to rethink data and network security practices to support these devices.– Companies will need to develop policies in regards to the

use of these devices and who will pay for these devices



Bring your own device• Accordingly, consider the growth in smartphone apps

(e.g., for the iPhone, Blackberry, Android, or Windows). For example, vendors such as Workday and SuccessFactors have built apps where employees can use their mobile devices to access and connect to the corporate HRIS.

• No longer are employees “chained” to their desks to when working with HRIS data.



Software as a service (SaaS)• Traditional software development models, the “on-

premise” or “home-grown” approach, are being replaced by “on-demand” software plans, which see the company or customer leasing access to as few or as many HR functions as it wishes to access.



Software as a service (SaaS)• The newest trend in delivering software to

companies is cloud computing.– HRIS functionality is delivered to companies via the Web.

For the company, there is no hardware to purchase or software to install. Employees can also access the software anywhere they have a Web browser. As with SaaS, companies are able to adopt only the amount of functionality currently needed and then scale up to additional functionality.



Software as a service (SaaS)• Organizations find moving to the cloud attractive

because employees find these systems easy. In the last four years, the market share for the largest three cloud vendors (SuccessFactors, Ultimate Software, and Workday) has increased by 361%.



Software as a service (SaaS)• In addition, in a recent survey of companies with IT

budgets over $50 million, over 85% of them were exploring ways of getting out of long-term, on-premise contracts and are actively considering cloud vendors to provide a viable option for them.

• These applications are easy to use and usually lead to both lower up-front and ongoing costs.



Service-oriented architecture (SOA)• SOA converts monolithic and static systems into

modular and flexible components. SOA is about efficient modular design and deployment, and reusable software is at the heart of the architecture.

• SOA offers several advantages to end users, who can change the business process when needed and purchase or develop only those applications that are involved in the new processes.



Web 2.0• A “second” generation of Web-related services

focusing on creativity, collaboration, and sharing, in contrast to traditional isolated information silos.



Web 2.0• Examples of Web 2.0 technology

– Social networking sites (e.g., chat rooms, MySpace, Facebook), wikis (publicly available collaborative Web dictionaries), and blogs (short for Web logs, i.e., online journals or diaries)

– Mashups (Web applications that combine data from multiple sources into a single location or application)



Web 2.0• Examples of Web 2.0 technology

– Podcasts (audio or video recordings)– RSS (rich site summary/really simple syndication) – feeds

that publish frequently updated sites such as blogs or news– Personal websites, peer-to-peer networking (P2P) – file

sharing (e.g., text, music, and videos)– Collective intelligence (sharing knowledge to tap the

expertise of a group)



Social networking• Social networking (SNW) is one of the features of

Web 2.0. Social networking tools such as Facebook, LinkedIn, and Twitter have become important tools for organizations, and human resources is not an exception.

• Companies are using Facebook and Twitter to help expand their HR brand and attract employees to the organization.



Social networking• A recent SHRM study has found that 20% of organizations are

using SNW tools for internal communications (SHRM, 2012).• Through these tools, companies are seeking to connect

employees and facilitate internal and global work group collaboration.

• Due to the growing use of social networking, HRIS vendors are developing applications within their product offerings to help support employee collaboration, onboarding, and learning.



Enterprise portals• Enterprise portals refer to the ways in which

individuals can interact with each other. Enterprise portals can be information portals, collaboration portals, expertise and knowledge portals, operation portals, social business networks, or a combination of all of these.



Enterprise portals• Within an HRIS, employee and manager self-service

(ESS and MSS) portals SHOULD BE USED in a majority of business processes (or workflows). Take the following examples:– Employee requests for time off– Employee and manager input to performance appraisals– Manager approvals for a variety of actions affecting his/her

direct reports or his/her manager’s direct reports



Open-source software• Normally, software that is developed is copyrighted, and the

source code is neither open nor available for others.• Some software developers have agreed to a different

approach to the development of software called open source.• In an open-source approach to software development, the

developers make the source code available for anyone to see and to change.

• Other companies or developers can then expand on the product or easily develop complementary products.

• Open-source software also costs much less than traditional (or proprietary) software and is sometimes provided for free.


AN EVOLVING HR TECHNOLGY INDUSTRY

• Markets and industries are cyclical. Innovations drive change and create new opportunities. In response to these opportunities, new companies emerge that specialize in new innovations.

• Over time, the markets consolidated, and vendors merged, leaving a few dominant HR ERP vendors, such as SAP, Oracle/PeopleSoft, ADP, and Lawson.

• Cloud-based HR software is driving industry change.• Many of the original cloud-based HR vendors have offered a

best of breed for a specific niche, such as Taleo’s recruiting product.


AN EVOLVING HR TECHNOLGY INDUSTRY

• Today, though cloud vendors are beginning to merge not only with other cloud vendors to develop breadth across HR functions, they are also being purchased by the major legacy vendors. For example in the last few years, SAP has purchased SuccessFactors, Workday has established a strategic alliance with Salesforce.com, Oracle has purchased Taleo, and IBM purchased Kenexa.

• Mergers and acquisitions are continuing in the consulting area surrounding cloud-based HR.


HR TECHNOLOGY MOVES TO SMALL BUSINESS

• As short as 5 years ago, the idea that a small business would be able to adopt a full-scale HR ERP would have seemed unlikely.

• But these days, products are being made available at costs that make their attractiveness to small businesses high.

• One of the reasons for this change is the availability of cloud-based solutions. Companies no longer need the capital to invest in both hardware and software and the IT expertise to manage the HRIS.


HR TECHNOLOGY MOVES TO SMALL BUSINESS

• Now, much of the risk and expertise for managing the hardware and software is with the vendor. Therefore, small businesses are not only able to afford access to the software, but they are also not burdened by the technological overhead required to implement legacy systems.


FUTURE TRENDS IN WORKFORCE TECHNOLOGIES

• Carden’s Philosophy• CedarCrestone Survey – 2010–2011



Carden’s Philosophy• Technology should serve strategic goals.

– Carden notes that the increasing competition by organizations to improve their profitability has often led to the conclusion that new technology will solve these issues, but the reality is more complex than that. Organizations that are most successful are those that are able to leverage technology that most closely links to a strong business strategy.



Carden’s Philosophy– Feeling increasing pressure to remain competitive and

survive has led to companies that are adopting technology to carefully diagnose what strategic goals the adoption of technology could support.

– It is important to keep in mind that how effectively organizations are able to harness the power of these new technologies will depend on how well they link it to their HR strategy.



CedarCrestone Survey – 2010–2011• Data for this report were collected in 2010 from

1,289 respondents representing over 20 million employees.

• Major Findings– Organizations that have more automation across all

categories of technologies outperform those organizations with less automation on the important productivity measures of net income growth, sales growth, and sales per employee.



CedarCrestone Survey – 2010–2011– The respondents in the survey reported that their

organizations have had strong recoveries (from the weak economies), and they forecasted a 100% growth in HRIS talent management, social media, and analytics and planning applications.

– Organizations reported that business process improvement through techniques such as Six Sigma (Chapter 8) for recruiting new employees.

– Organizations are increasingly choosing to rent access to applications instead of purchasing and installing these applications on site.



CedarCrestone Survey – 2010–2011– Organizations are continuing to invest in applications

across all HR functions. Administrative HRIS software for core HR recordkeeping, payroll, and benefits is still the dominant class of technology, with worldwide average use at 90%.

– There is a continuing trend to use new “service delivery” applications, such as employee and manager self-service systems, portals, HR help desks, and workforce life cycle management.



CedarCrestone Survey – 2010–2011– The major increase in the use of technology to support

HR will focus on tools such as talent management, social media, workforce planning, and workforce analytics, with over 90% growth in the next 3 years.

– Among organizations that have installed multiple talent management applications, in particular those companies with four or more applications installed outperformed those companies with three or fewer applications in terms of higher net income growth, sales growth, and sales per employee.



CedarCrestone Survey – 2010–2011– Organizations have begun preparing to use service-

oriented architecture (SOA) to automate business processes (e.g., applicant tracking).

– Finally, the survey focused on choices and investments which are providing a strong return to companies. These choices include the following: (1) focus on career development, (2) use workforce optimization technologies, (3) choose an integrated ERP-based talent management solution, and (4) adopt social networking.


Chapter 17

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