The study of human resources has long been a passion of mine. I lived through the years when it was thought to be a purely administrative function. I fought through the years as we struggled to bring the HR perspective to the strategic table. I stumbled through the years when I was assigned tasks from the executive without any rhyme or reason as to why the task was important or how it would benefit our employees, and I spent years empathizing when I was forced to deliver tough messages to staff while the executive comfortably planned their next executive retreat behind closed doors. Many of us question whether HR is even there yet in terms of respect, but there is one thing that is for certain. HR has become a leader in the advancement and utilization of technology to manage the administrative tasks associated with the management of human resources.
From storage on local hard drives to centralized storage to data farms to cloud storage, enterprise environments have come to realize that it is not always in their best interest to be in the IT business. Vendors have capitalized on this by offering cloud solutions so that data can be stored in an offsite location with all the bells and whistles we have come to associate with the integrity and security of our data. Happily, HRIS (Human Resources Information Systems) vendors have embraced this trend and offer this as a solution for our HR data. But there were many pieces of this data puzzle that needed to come together first.
Introduction of technology
Prior to the introduction of office computers and Lotus 1-2-3, employee data was decentralized. Each department used whatever means possible, usually in the way of what looked like large, paper ledgers to manage employee costs and benefits data. It really fell to the accounting department to make sense of the overall impact of the cost and to balance and generate employee paychecks.
While mainframe computers entered the marketplace first, they were really only available to the largest organizations, mostly governmental that passed the high cost on to taxpayers. Banks entered during this era as well. Coincidentally, it is also the same time that we stopped earning any type of viable interest on the money we leave in the hands of banking institutions. IBM also became very wealthy during this era. It wasn’t until the late 1970s and through the 1980s that desktop PCs and local area networks really became physically and financially available to most organizations. And this, my friends, changed everything!
Basic employee data
Lotus 1-2-3 was a wonderful advancement when it came to basic employee data. Records could be entered and saved and sorted on any field of data. Gone were the days of sorting through files of physical paper on a daily basis just to capture the liability of unused vacation time. With the addition of local area networks, now a centralized employee record database could be added. Each department no longer had to maintain and manage their employee records. The centralized HR department was in the process of taking over.
But there was a problem. The executives did not trust HR with this information. As a result, security access was implemented that would allow HR to enter and maintain employee data. But HR could not see the entirety of the record. Employee evaluation and payroll information were hidden from their eyes.
There were other growing pains as well. When small departments handled their own employee records, everyone knew that John H. Smith and J.H. Smith and John Smith were the same person. However, once everything started to centralize, thereby enabling companies to grow exponentially, John H. Smith and J.H. Smith and John Smith became three different entities in electronic records. I’m not sure that we have quite worked through this particular problem just yet.
The point being, now that employee records could be centralized and managed by HR, the cost of managing employee data could be greatly reduced, thereby making a rather nice difference to the bottom line. The ears of the executives perked up as they saw a way to increase headcount, thereby increasing production and revenue, without having to increase the cost of overhead. In fact, the cost of overhead went down!
Payroll is an interesting function. Organizations can’t seem to decide if payroll should be a function of HR or finance, and there are perfectly good arguments for both. Personally, I lean towards HR managing salaries, bonuses, and benefits, with finance managing the production of the payroll itself. My reasons are as follows:
- Payroll is difficult and should be managed by a person, or people, who are educated in accounting and finance principles.
- The skills and abilities of those who excel in payroll production and those who manage human resources are quite different. My experience is that successful payroll professionals have a skill set that is more in alignment with that of finance professionals.
Regardless of which department owns payroll responsibility, technology has allowed for the integration of payroll with the other HR functions. This means that upon hiring, recruitment data can feed employee information into the payroll system so that there is no duplication of effort and potential data-entry errors. Start dates, end dates, even expense reimbursement can feed into the payroll system.
If you have done a job search in the last 10 years, you will be quite aware that the recruitment process is very broken. Suffice it to say that if one is successful at acquiring a job through today’s recruitment processes, they enter said job with an already quite justifiable negative attitude. So, the onboarding process needs to be a seamless, and very positive experience or you will run the risk of this new recruit becoming yet another turnover statistic.
There is a lot of pressure on HR for the onboarding process. Thankfully, onboarding has been integrated as part of the HR technology lineup and this is a great help. Information entered by the prospect during the recruiting process can be brought forward into the onboarding module and captured within the employee data. Imagine what a positive experience it will be for a new employee to not have to complete multiple forms with the same information. Rather, the forms will be completed on their behalf leaving only the new information to be completed.
Reporting and analytics
We still live in a time when last-minute requests for various collections of data are a weekly event. While we are amazing at collecting data, we really have not embraced the concept of extracting data effectively. Reporting and analytics is a career path, with education, experience, and ongoing training an integral part. Sadly, the assumption today is that if an analytics module is included with an HRIS, any HR professional will be able to immediately draw upon their HR skillset to produce fast and accurate reports.
That said, the good part about this is that we are now effectively collecting HR data that can become an integral part of the major corporate decision-making process. Vacation accruals, min/max salaries, and outlying salary information, along with substantial other statistical information. The challenge is that these reports require time to set up. In addition, if the HRIS is not set up to gather certain information, there is little hope of reporting that information accurately.
Reporting and analytics are among the most valuable processes that we have access to as a result of today’s HR technology. But we spend the least amount of time planning what information we will need our technology to deliver. As we scramble to put together the information that is requested, mistakes are made, and decisions are based on inaccurate data. The technology is there, but it arrived before our skills caught up.
While the development of the technology behind the HRIS has happened in leaps and bounds, the end of the roadmap is still quite far down the road. While offered, recruitment, time & attendance, and learning & development are still not fully integrated into most HRIS applications. Vendors offer integration of acquired modules that don’t always work together as smoothly as we would like. HR data needs to be in real-time, but we still see batch processing that runs overnight or in intervals that mean data is never quite in alignment with other associated applications. Talent management and workforce management are intended to manage and plan for succession. They are only as good as the data that we capture, which still tends to be quite subjective.
Credit where credit is due!
HR professionals have taken what was once deemed a very administrative function within the enterprise and worked to develop and utilize technology to make use of the information that is available to better enable organizations strategically. Perhaps HR is the reason organizations are now able to grow to such an unprecedented size. An increase in the size of the workforce no longer means an exponential increase in staff required to manage all things HR. They say when life hands you lemons, make lemonade. This really does seem to apply to the profession of HR. Once not accepted as strategic, HR professionals have worked hard to embrace technology and become a key resource to reduce overhead and enable growth.