Is technology a foundation for strategic HR?

Is technology a foundation for strategic HR?Technology is often seen as the answer to improve operations and processes. This viewpoint also applies in HR, where there is even a blooming series of conferences built around telling people how technology is the answer to better HR.

In a blog post titled Technology is the Foundation for Strategic HR, Marc Coleman refers to the September 2015 Cranet report on HR as a confirmation that the use of technology is a foundation for increased strategic HR leadership.

Now, with a claim as tangible and strong as that one, it warrants a bit deeper look. Is technology a foundation for strategic HR?

Has increased use of technology led to a more strategic role for HR?

Human resource information systems have become fairly commonplace with 83% of organizations utilizing one in some way, 50% using manager self-service functions, and 67% using employee self-service functions.

What about the role of HR? Is it now more strategic? Here are the results from the September 2015 Cranet report:

  • The head of HR is now more likely to have a place on the board: 70% in 2014/15 as compared to 63% in 2009 and mere 41% in 2004.
  • The involvement of HR department in the development of business strategy has declined: 76% in 2014/15 as compared to 78% in 2009 and 80% in 2004.
  • Fewer HR departments are consulted in mergers or acquisitions: 91% in 2014/15 as compared to 96% in 2004 and 92% in 2004. (The share of HR departments consulted from the outset has remained steady between 50% and 60%)
  • HR departments are beginning to bear the primary responsibility for recruitment and selection policy decisions: 22% in 2014/15 as compared to 16% in 2009 and 13% in 2004.

Overall, the position of HR departments from a strategic point of view has not changed all that much. The one truly major change is that the head of HR is now much more likely to sit on the board. HR departments are also beginning to have more authority over policies, but that is still a minority case.

In fact, even if the HR department alone has the primary responsibility for recruitment and selection policies, does this indicate a more strategic role? HR is, after all, a support function, and a support function does not become a strategic asset by having sole authority, but by working in cooperation with the business units. Viewed in this light, the fact that policy decisions are now more often made by HR alone (up 9%) or by line management alone (up 2%) instead of in cooperation with each other (72%, down from 84% in 2004) may in fact subtract from the strategic role of the HR department.

Thus, there is currently no indication that the increased use of technology would have actually made HR departments overall more strategic.

What has been achieved with technology?

One thing that technology is often considered to help with is workforce reduction. However, the median HR-staff-to-employee ratio has not been lowered, but instead it has fluctuated during the past decade and now sits at its top point with 1 HR person for 83 other employees (the bottom was during the recession in 2009, when there was only 1 HR person for 127 other employees).

Recruitment has moved online for all personnel groups, especially managers and professionals. Commercial job websites and the company website are the key recruitment channels at around 80% use rate for each, even ahead of employee referrals. Newspaper ads have fallen to the bottom with only 27% of companies using them for managerial recruitment. Almost half of the companies use social media, with a few forerunners (15%) using social media profiling in their recruitment efforts.

Teleworking has not become more widespread among companies in the past decade (61% use it now as compared to 55% in 2004), but it has increased its share in the companies where it is used. In other words, companies that allow telework allow it more widely, but a significant number of companies do not use it at all.

Employee appraisals

One key part of enabling strategic HR is capability management. By understanding its current capabilities, a company can make good decisions regarding the competencies it needs to develop or acquire, which are typically decision about the workforce.

Therefore, the use of employee appraisal data can be seen as one of the key requisites of strategic HR management. Employee appraisal data is already widely used beyond pay purposes, namely for establishing career moves and for training and development. However, its use in workforce planning is not yet a given in many companies (59% use it).

Compared to the number of companies that use human resource information systems, the number of companies that use employee appraisal data in workforce planning is low. Thus, technology has not automatically brought about benefits in using this data.

Training

Companies have increased the number of training days provided to employees while not increasing costs. Is technology the key here? Perhaps, although that is not evident. Instead, training is most often provided on the job, during projects, or through informal coaching – all low-cost options. Computer-based packages are used much less than these three.

Communication

Direct briefings are becoming less common, with electronic communication taking their place. For top-down communication, electronic communication is the most common way (69%, non-exclusive). However, for bottom-up communication, the main way is still to go through the immediate superior with electronic communication being a distant second and suggestion programs far down in the list.

On technology and improvement

This is a common story, really. New technology has been taken into use, and in many ways it has changed the way work is done… Still, it has not fundamentally changed the way work is done. Compare this to a fax machine and email: sure, you need to learn some skills to move over from the world of paper to the digital world, but if you still convey messages much in the same fashion, the improvement comes from being able to do things faster, not better.

The data about communication is particularly insightful: electronic communication has surpassed the chain of command when it comes to top-down communication, but not when it comes to bottom-up communication. Technology by itself has not brought about an open and innovative workplace. The extremely low share of suggestion programs as a form of bottom-up communication (you know, you can gather input widely even without technology) showcases how it is the operating models of the companies that need to change, not technology.

Is technology a foundation for strategic HR?

In light of all that has been written above, no, definitely not. Technology can be useful for strategic HR, as it can both help automate administrative tasks to free up time for more strategic work and help in gathering important data to guide decision making, but simply implementing technology does not a strategic HR department make.

In fact, HR departments can be more strategic without any technology investments whatsoever. It is all about the mindset and the approach to solving business problems. It is that mindset that can disrupt HR, not technology.

 

Photo: The Beacon by Stuart Richards @ Flickr (CC)

 

Author: Ville Kilkku

I run my own consultancy business, so if you find the ideas on this blog intriguing, contact me at consulting@kilkku.com or call me at +358 50 588 5043 and we can discuss how I can help you solve your business problems. I am currently based in Tornio, Finland, but work globally. Google+