Is the case for HR systems really the case for better people management?

Posted by Chris Murray

According to our new HR Technology Survey, the proportion of organisations that have at least one HR process in the cloud has increased from 68% in 2015 to 73% in 2017. What’s more, almost 40% now have their core applications in the cloud, and even more are planning to migrate.

It’s excellent news to see in black and white that HR functions are letting go of decades of paper pushing. The case for technology in HR is strong – according to the survey, one third of those using cloud technology say it allowed HR to play a stronger consulting role within the business. The market for HR cloud solutions is growing because they work – it’s as simple as that.

But if the results are that good and that clear, it does beg the question, what’s holding everyone else back?

From my experience, I’d say there are a couple of key problems we need to tackle. The first is the long-held perception that HR systems are only there to help HR people do their job. HR systems don’t really benefit the rest of the business, goes the argument, so aren’t worth spending a lot of money on. A back office system for HR, let’s face it, is never going to be high on the list of spending priorities.

The second (and related) point is that many of the new HR cloud solutions are, effectively, ‘self service’ – which gives the impression that they are pushing responsibility for collecting and analysing HR data out to the business. That’s by no means a bad thing, as I’ll explain in a moment, but it’s the labelling that gets in the way. If we think about it, self-servicing (or ‘direct access’ as we call it) is happening in many areas of our lives. We book holidays ourselves online; we make banking transactions ourselves with our phones; we book cabs without making a phone call. We don’t see any of that as service providers shifting the work onto us – we call it convenience.

This all makes it difficult for HR to make a strong business case for the investment that cloud (and other) technology takes. And a good business case – one that’s closely tied to the strategic objectives of the business – is essential. 64% of those taking part in the survey said they’d done this – and of those, 65% said that the expected benefits they’d outlined were achieved.

The single biggest piece of ammunition that HR has in making its case for investment is people. People make organisations successful and CEOs are hyper-aware of their importance, particularly as the world of work changes.  According to our latest survey, 77% of business leaders see availability of skills as the single biggest threat to their business, and the pressure to find and retain the talent they need is becoming even more critical. 78% of CEOs say their people strategy has already changed to reflect the skills and employment structures needed for the future.

A people strategy that’s fit for the fast-changing and challenging workplace needs the best infrastructure to support it. I’d also add that nurturing and getting the best out of people isn’t the  responsibility of the HR function – it’s the job of managers and leaders throughout the organisation. And if they’re going to do that, they need the best possible information and tools at their fingertips – whenever and wherever they need it. The point of excellent cloud HR systems is that they give these people what they need to do a good job and have meaningful conversations with employees – perhaps by providing heads-up that a key worker might be a flight risk, for example. It’s that killer combination of good, timely data and the human connection that keeps people, and keeps them at the best. That’s why investing in HR systems make sense.