HR Transformation in the Digital Age

In the 1980s and into the 1990s, the role of the personnel department continued to transform. In fact, most of these had re-branded themselves as "human resources" in an effort to better align the new needs of the business. And as quickly as the economy began to turn around, the pace of competition also began to quicken. The HR department, which was viewed by most in the business as an expense, was feeling pressure from executives across the business, such as total headcount. The running joke among many CEOs and CFOs was that if they asked for a headcount report from five different people, they would get five different numbers. As a result, HR knew that if it was going to change its role in the business, it simply had to adopt a more suitable IT landscape, like what had been implemented across the rest of the business. The hope was that, with better information, HR would be able to deliver better insight into the workforce so that, together, executives and HR could make better, more informed, workforce decisions.
At the same time, confidence in the HR department continued to go down. In most companies, HR remained separate from the rest of the business, with no links to executives, their decisions, or the workforce or managers. Executives were used to making decisions based on tangible assets such as revenue and supply chain. HR and its value of employee relations and development were not tangible and hard for executives to understand-and even harder for HR to articulate in real, tangible business terms. As a result, HR was very rarely consulted or included in business decisions. Executives and managers alike rarely turned to HR for help with strategies, programs, or people decisions beyond headcount reductions. Employees also held little trust for HR.
Managers, like employees, had little interaction with HR. Hiring contingent or permanent staff was not a seamless process. Managers wanted the right people to help them deliver and had little confidence that HR understood the needs of the business in order to hire the right people. When HR was involved, managers found the process too lengthy and often missed the opportunity to hire the right candidate. As a result, managers often took matters into their own hands and recruited on their own, bringing HR into the process during the search or hire phase, instead of during the planning phase. This may have shortened the cycle time from recruit to hire, but many times, it drove up the cost to hire.
The employee experience with HR was not that much better. Even the simplest transactions, such as an address change, were often at least partially manual or required help from HR. This resulted in processes that took multiple steps and lead times, which further resu1ted in errors that aggravated the employee and created extra steps for both the employee and HR.
With such deep dissatisfaction by its stakeholders and a strong desire to be seen as a key member of the business, HR knew it had to change its role in the business it needed the right tools and systems in order to do so. HR would have to prove its placein the business, and that meant talking in a language the decision makers would understand-with as much tangible information as possible. Using data from such companies as Saratoga, HR departments began to collect employee metrics to compare themselves to others in their industry on such measures as cost per hire, time to hire, and HR headcount per FTE (full-time-equivalent). Many of these measurements were used as justification of the purchase and implementation of HRIS to automate the more non-value-added transactions for which HR was responsible.
The hope for HR was that with the non-Value-added processes automated, the HR workforce could concentrate on providing key services to executives, managers, and employees. At companies such as TransAlta Corporation, a major North American utilities player, reducing the amount of time on transactional tasks meant the ability to focus on activities that would positively impact its business. As shown in the ROI study conducted by Gartner Consulting of TransAlta‘s human resources system implementation, Shandra Russell. a director of HR at TransAlta, sees the benefits of a new focus: "This cycle-time reduction allows for HR to spend less time completing administrative tasks and more time focusing on strategic activities that are core at TransAlta‘s business."
By the mid-l990s, the Internet, or the Worldwide Web, was a common topic of both social and business discussions. Many businesses had branded corporate intranets that provided information for their employees, virtual bulletin boards for information ranging from internal job postings to a calendar of events, even allowing employees to post "for sale" notices of private property. More and more companies were providing workers with home access to corporate systems via an intranet. Companies were able to offer employees a way to manage their personal and personnel information, working toward work/life balance, while employers were able to keep employees connected to their own information, enabling a better, more accurate depiction. In a time when the buzzword for employees was "empowerment," corporations began to focus on deploying applications that could give employees all the tools and information they needed to perform their jobs and make better decisions.
In order to gain insight into even the most seemingly basic information about the workforce in the l990s, more and more companies were beginning to embrace a more comprehensive approach to HR automation through which disparate systems and broken processes would be replaced with a “Human Resources Information System” (HRIS). In fact, most large businesses embraced an HRIS strategy that enabled them to replace antiquated, time-consuming personnel processes with streamlined automation.
With better data, of course, came better information; and with better information came better and more informed decisions. Businesses were beginning to rely on data warehousing and analytic tools to gain valuable insight into the workforce through dynamic information gathered from across the business. Not only were HRIS applications enabling operational efficiency, cost reductions, and control, no matter where or how the company did business, but they were also starting to enable the type of insight required for key business decisions. With technology enabling the use and deployment of workforce information, human capital management systems began to be pushed into the market and across the business.