The use of HR technology is increasingly commonplace in UK organisations. Cherry Park explains what functionality is available

The outsourcing of part or all of the HR function has risen steadily in popularity in the last few years along, with the increase in complexity of UK employment legislation.

Outsourcing is one way for companies to reduce their cost, time and administrative burdens, but it is not the only option. The use of new technology to handle and measure human resources is becoming increasingly attractive in both large corporates and smaller enterprises as it can, at least in theory, liberate personnel professionals to concentrate on the more strategic activities that many crave.

Types of HR technology

The list of applications under the umbrella of HR technology is seemingly endless. MidlandHR's HR management solutions, for example, includes:

• absence monitoring and payments;
• training administration;
• car benefits, recruitment;
• people development;
• payroll;
• learning events administration;
• employee and manager self-service;
• budgets and modelling;
• benefits administration;
• occupational health and safety; and
• discipline and grievance.

But, warns Nick Record, head of HR transformation at ARINSO UK: "It is important to remember that technology is not an isolated part of HR; it needs to be reviewed as part of the entire customer and business requirement. People, process and technology should be managed in a holistic manner."

Self-service systems

One of the most prevalent features of HR technology is self-service. "Outsourcing HR work is usually considered to be an external process, but there is nothing to say that outsourcing can't be handled by an internal audience through HR self service," says Grant Taylor, UK regional manager of online people management solutions company PayGlobal.

Self-service enables employees to log on at any time and update their personal information, for example their address, bank details or holiday requests, while managers are able to update information about their team such as salary changes, bonuses and absence.

"Self-service is a key area in reducing HR administration costs and improving data accuracy," says Peter Collinson, head of managed services at MidlandHR, while Graham Young, ARINSO's managing director, comments: "Managers using self service can concentrate on strategic tasks. Information is easy to find and data can be consolidated from a variety of sources, improving decision quality."

Talent management

As skills shortages in the UK hit a record 12-year high, according to a recent survey by Lloyds TSB, Business in Britain, the management of human capital assumes greater importance. People are a business's greatest asset, so the management of what they have to offer can be a crucial factor in their retention.

A talent management system allows an organisation to maximise the use of its available talent by supplying the tools to track an employee's career development, giving management a clearer view of its employees' skills and ambitions.

Employee benefits

Online employee benefits systems, such as thomsons online benefits' Perquisite solution, allow both employee and administrative access. Employees can log on to view their total reward statement, model their future pension provision, make changes to their contributions and flex or buy benefits. In turn, administrators can adjust pay according to employees' benefit selections.

Chris Bruce, thomsons' director of marketing and technology, says: "Traditionally, employers have been hampered by the intensive paperwork surrounding employee benefit schemes which make them difficult to communicate to employees and costly to administer. Increasingly, web technology is being utilised to eliminate the paper dependent processes."

Flexible benefits

Self-service enables individuals to select their own benefits, which can be automatically managed by a central HR system. "Reducing the HR administration of flexible benefits through technology is making it increasingly cost-effective for organisations to introduce this benefit for their employees," says Nigel Polglass, managing director of Ceridian HR & Payroll Solutions.

Recruitment systems

Recruitment systems can be directly linked to HR systems so that personal details are automatically transferred when a successful applicant becomes an employee. Applicants can be tracked and screened by online application forms, questionnaires and tests, improving both speed and efficiency.

Training and development

This type of HR technology, such as that provided by PayGlobal, allows users to identify the training needs of relevant employees, create and run suitable courses, obtain feedback and provide automatic accreditation, while managing costs and budgets.

Dos and don'ts

So what advice do the software suppliers offer choosers and users of HR technology? "Any new technology requires support and buy-in from new users if it is to bring expected benefits," says Polglass. "So there is a need to develop a programme of employee communication, training and process re-engineering."

Bruce cautions: "When purchasing any technology, be wary of systems that are developed in old style technologies that have just had changes hard coded or bolted on. You should also clearly scope out exactly what you want the technology to do and talk to other users with similar profiles to find out whether or not it has worked for them."

For Collinson, ease of use is key. "Look for a well-designed user interface with simple navigation. Modern business systems should be intuitive and not require extensive training," he says. Collinson also recommends looking for a modular solution. "That way you can purchase just the level of functionality that you require and expand later," he says.

Taylor points out the importance of good management reporting when a system is being considered. He advises: "Look for technology that can supply all standard reports but also ones that are unique for the company. Buy for the future - make sure the software has longevity."

Jeremy Langley is managing director of BrassRing UK. One of his top tips is: "Security, security, security. Even at a basic level such as address, phone number and bank details, the HR department holds sensitive information about your people. You need to be absolutely confident any data stored on your HR software is not going to be available to anyone who deliberately, or accidentally, gains access to the system."

Langley also warns that the system must be robust and reliable. "There is nothing more frustrating than implementing technology to improve systems and create efficiencies, only for it to have regular amounts of downtime," he observes. "Look for flexibility. Rather than being constrained by the capabilities of the technology, you want technology that can be tailored to meet your needs."

Finally, a golden nugget of advice from Taylor: "Aim to purchase a product that will show return on investment quickly. The software should automate as much of HR's mundane tasks as possible, to free up time and resource for strategic HR activity."

Case study: Ernst & Young

Before 2002, professional services firm Ernst & Young's HR staff were based in a number of separate business units around the UK that were unable to share CVs or operate on a company-wide basis.

In 2002 the company began a review of its HR capability for its 7,200 employees with the aim of finding a system that would enable a smaller, more focussed resourcing team to manage higher volumes of recruitment, while optimising the use of direct-to-market recruitment techniques such as web recruitment, referrals and internal recruitment.

"Recruitment is a key part of our business and we needed the whole process restructured, automated and made more cost efficient," Matthew Anderson, project manager for recruitment technology implementation, explains.

It chose talent management solutions provider BrassRing to supply its Enterprise system, which provides tailored access to centralised data. "We were particularly impressed with BrassRing's eLink capability, an email collaboration tool which allows seamless integration between the recruitment team and line managers without forcing everyone to log on to the system," says Anderson.

The solution has enabled Ernst & Young to integrate all its routes to market, capture candidate information electronically and manage it all in one database.

©Pay magazine - June 2005