What the history of HR technology teaches us: The need to adapt to survive
Scroll back two decades to 2000 and the business and technology landscape looks alien and unfamiliar. The Internet was in its infancy, smartphones unheard of and social media an unfamiliar term. HR and payroll technology looked very different too. Yet, for providers in the space, one thing has remained constant: the need to adapt quickly to survive. We have seen it through the Y2K crisis, the challenges and opportunities of the cloud; the uncertainties surrounding Brexit and the Covid-19 pandemic.
Back at the turn of the millennium, we started to see a shift from traditional personnel departments to the new world of human resources (HR). Before then, employees often had a well structured career path in a company that offered a job for life. They only had occasional transactional interactions with the personnel department. When HR departments came in during the 2000s, they still ran transactions for their employees but they were starting to centralise these and consolidate services into larger departments for economies-of-scale.
In parallel, there was a growing understanding that people and their expertise were the real differentiators of the business. That led to the beginnings of a war for talent as businesses began to compete more strongly to attract the best people. HR was changing from a function that simply supported employees who work for life to a way of managing talent in order to differentiate the business.
With these trends underway, we saw technology evolving to keep pace. HR departments started to modernise systems of record as they centralised activities more. We saw the emergence of employee self-service where individuals updated their own records and could access all the information they need as an employee through a web-based portal, helping foster enhanced employee engagement. More services and offerings aimed at employees followed as businesses became aware of the increasing importance of employee wellbeing. Fast forward to now and these services have become increasingly automated – fully mobile-enabled and accessible from anywhere on an employee’s smartphone.
That kind of capability was helping employers too. AI can now scan CVs helping to streamline the recruitment process. Regular online reviews carried out every quarter can now replace traditional annual pen and paper reviews.
Employee engagement matters
Organisations increasingly appreciated that if they were involved in a war for talent, they needed to engage more closely with staff and ensure they were motivated. After all, the best, most motivated employees are ultimately going to deliver the best benefits for the business and make it more competitive. This growing focus has also led to HR becoming of more strategic importance to the business. Often today, HR Directors have a seat on the board and payroll has become an extension of HR rather than being an extension of finance. As a result, HR is often now at the forefront of technological change rather than having to play catch-up as has been the case in the past. HR solutions from Oracle, Workday and SAP were among the first SaaS solutions to come into the marketplace.
The war for talent has also served to empower employees more. People with the right skills can earn a premium place in the market and can even, to an extent, decide what companies they are going to work for. At the same time, these employees are likely to want to work flexible hours and have a better work life balance. Increasingly, they also want to be working with an organisation that has a positive business culture and a strong sense of corporate social responsibility (CSR).
Businesses are going to find they will need to focus on the full employee experience or risk them leaving and joining the competition instead. Moreover, it is important for other reasons that organisations are able to develop a fully engaged workforce. Having more engaged employees tends to boost the productivity of the business. In a recent study conducted by the University of Oxford’s Saïd Business School, researchers found that happy employees are 13% more productive.
So as this article has shown, the HR sector, especially in recent years, has been characterised by rapid change. As we look to the future, it is important that companies evolve their own systems to keep pace. In today’s world, organisations need the ability to rapidly change in line with changing circumstances. The past 12 months provides proof of that. There was a clear divide between those organisations with the right systems and processes in place to mobilise overnight when the Covid virus began, who were able to engage and support clients and those that were ill-prepared and struggled to deliver an effective response.
Moving forwards, what the history of HR tells us is that change is likely to be a constant and the lifecycles of products and solutions are likely to shorten even further. Businesses need to ask themselves do they have everything they need in place to react quickly and stay ahead of the pack?
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