The current business climate is loaded with HR challenges. With continued high unemployment, HR teams must sift through a barrage of applicants for any job posting. Employees are wary, having seen friends and colleagues laid off, so they need to know that HR also is identifying growth paths. And with companies leaner than ever, when new hires do come on board, HR needs to make sure that they become acclimated and productive quickly.
Amid all this activity, HR teams also are under pressure to focus on more than one-time transactions-hire, promote, fire-and instead improve employee development more broadly. Some businesses are finding their legacy HR systems may not be up to meeting these challenges. In the same way that ERP systems were bolstered with sales-force automation, e-commerce, and business intelligence systems, conventional HR systems are being surrounded by systems that aid in recruiting, retention, compensation management, training, "onboarding" new employees, and talent analysis.
These tools go by a range of names, such as human capital management and talent management, and they may or may not be integrated with existing HR systems. Top executives and directors need to be aware of this broad trend and make sure HR and IT teams, along with line-of business leaders, are moving ahead together to meet new demands.
These new products that expand on conventional HR systems share some traits. First is that they're increasingly delivered in a software-as-a-service model, though many also provide a behind-the-firewall option. Second, while many started as point products to solve one HR problem, they're increasingly being pitched as suites, promising to let businesses choose the functionality they want-for example, just performance management for tracking employee reviews-but with the option to expand.
The vendors also are trying to figure out how to make social networking part of the HR and recruiting mix. The potential's there for reaching out to new candidates and engaging employees, but there's a lot of work left to do to make social networking an effective HR tool.
One of the key issues for top business leaders is the fact that these products often are delivered in a SaaS model, with no on-premises hardware, which makes it possible for HR to add capabilities without too much IT involvement. "HR is a cost center, not a profit center, and what happens to a cost center at most organizations? They are typically at the bottom of the IT priority list," says David Ludlow, VP of SAP's on-demand HR products. "Enter the on-demand vendors. You can get a system up and running in theory without any IT involvement."
That approach can be appealing if it gets a system running sooner. But without IT's help, there's the risk of a creeping number of systems that do one task and aren't integrated as an HR system, leaving managers and employees to sort through what systems to use when, and to keep their many Web app logins straight. Top executives must manage this potential tension with HR and IT.
The 'Talent Management' Push
In the past few years, vendor consolidation of single-function HR apps has left a smaller group of vendors, including iCIMS, Kenexa, SilkRoad, SuccessFactors, and Taleo, with varying mixes of recruiting, performance management, onboarding, and training products.
And the major vendors of core HR systems, including Oracle PeopleSoft, SAP, and Workday, are building out their own collection of talent management applications integrated into the core products. One example: Workday is incorporating social aspects into its SaaS-based HR system, including an upcoming feature called Workfeed that creates a Twitter-like feed of an employee's HR-related activities, such as completing training or meeting performance goals. That feature can pull in data from other sources-say, a salesperson meets a goal and it's noted via Salesforce.com's Chatter collaboration tool. "We're not trying to replicate these other workspaces but integrate them where it makes sense for the user experience," says Leighanne Levensaler, VP of HCM Strategy at Workday. "The world doesn't need another Twitter or Yammer or Chatter."
To understand the new challenges facing HR and IT, let's look at some of the key functional areas and how the needs are changing in each.
Recruiting: So Many Applicants
Most HR suite vendors have some applicant tracking capabilities, which assist in managing the huge number of applications companies get from posting a job on their own sites as well as job boards such as Monster.com. They help track job applicants in much the same way that a CRM system manages sales and customer contacts. The systems usually have features, such as geographic filters and knock-out questions, that whittle down the number of qualified applicants. Vendors now are engaged in something of an arms race to extend and enhance those features to help customers cope with the exploding volume of applicants.
Adding to the problem is the recent growth in small job sites that pull in job openings from across the Web. "A couple of years ago you could look on the Web and see exactly where jobs were coming from and where they were being posted, but those lines are blurred now," says Thomas Boyle, SilkRoad's director of product strategy. "Customers don't know how or when their jobs got on these 50 different sites."
Facebook and LinkedIn also are an emerging platform for HR recruiting. Many software tools help employees communicate job openings on public social networks, which in theory should lead to more focused networking, as employees share information on openings with people they know. In practice, HR's still in the experimental phase of social network recruiting; social networks may only increase the applicant volume and exacerbate this already huge HR challenge.
HR teams also worry about the security of using public social networks for recruiting, so they're moving cautiously. "We are constantly being told by our customers that they don't want us to open up to social media providers because of the sensitive nature of the application," Workday's Levensaler says. "They want it enabled as a choice and not a default."
Onboarding: A Bigger Priority
When unemployment is low and companies are locked in fierce competition for people, onboarding tends to take a backseat in HR to tasks such as recruiting, performance management, and compensation management.
However, in this slow economy, onboarding has risen in importance, as businesses seek to streamline the traditionally manual processes for getting an employee into the company and working productively. Onboarding systems focus on automation to make sure the right workflows and processes get triggered and tracked. Those alerts can be for anything from the IT department getting a new hire a laptop and the right system access to a manager being prompted to do an initial goal-setting session with the new employee.
This is another area where social tools are coming into play. As companies build their own internal social networks of employees, one of the onboarding tasks will be to make sure new hires get connected to the right collaboration forums, or to employees with similar skills and experience who can assist with acclimation.
Performance Management: Frequent Feedback
Done wrong, performance management leads to perfunctory and pointless annual reviews. Many companies are pushing for performance management to be something more ongoing and holistic, where employee talent and effectiveness are measured regularly, against goals and company performance data. Increasingly, this data is used to not only evaluate employees, but also used in aggregate to build compensation guidelines and set expectations for new hires.
Once again, social networking is an influence here. For example, Saba Impressions lets managers (and colleagues, if you choose) provide instant feedback on an employee's performance throughout the year, rather than just at review time. This makes it possible for a manager to comment on an employee's performance right when a critical moment occurs: Janice's work on the presentation was key to our landing a new client this week, or Bob was unprepared for a pivotal new product development presentation today. The company sets policies on who can comment in the performance feed and who can view that information.
"The beauty is that it can be integrated based on the organization's policies with that performance review process," says Milind Pansare, Saba's senior director of collaboration. "So you can choose to let managers see what the Twitter-like feedback has been on that person."
Training: Less Of An Island
While training has typically been part of HR's responsibility, it's often separate from the rest of the employee management and evaluation process. Some companies are trying to link them more, and most of the HR vendors have responded by boosting their capabilities for tracking learning and training, including integrating it with the rest of the talent management features. Of course, a lot of training today is done via Web conferencing and online video, which can make it easier to automate attendance and participation than with conventional classroom teaching.
A looming challenge is whether these systems can go beyond tracking formal instruction, and also help monitor and facilitate the informal, on-the-job learning that's so critical. With the growth of online collaboration, that interaction will increasingly be digital, around Facebook-like employee profiles and ad hoc collaboration Web sites. If HR teams can effectively use data such as ratings and who's following whom in these collaboration systems, they have an opportunity to introduce new employees and existing employees who could benefit from others' experience and knowledge. "The value of this is not so much being connected to people that I know but rather being connected to the people that I don't know," SAP's Ludlow says.
Analytics: How Deep Is The Talent Pool?
One of the biggest game changers provided by this new generation of talent management systems is the ability to provide analysis into more aspects of a company's talent pool. "Line-of-business executives and CEOs are realizing that they know a lot about their property, plant, and equipment, but they don't know a whole lot about their people," says Shail Khiyara, Taleo's chief marketing officer.
For example, if sales are declining in one region, executives can look at CRM systems to assess the deal pipeline, as one input, Khiyara says. They probably can look at on-time deliveries, returns, and other production and quality measurements. But they also should drill down to assess the relevant sales team's experience, training, pay, and performance compared with teams elsewhere in the company.
While these types of analytics have huge potential, they come with a caveat: Businesses should make sure they're measuring all aspects of employee work and interaction. As this article shows, there's a growing list of "activity streams" HR can track: activity on in-house collaboration platforms, feeds and contacts on external networks like LinkedIn, in-house training sessions, and Twitter-like real-time performance reviews. HR needs to make sure everything it's measuring really drives performance, and doesn't punish those who just get results without leaving a digital audit trail.
The economy is indeed a big challenge for HR departments, as employees worry about working with reduced staff and tenuous job security. But amid that urgent pressure, top executives need to make sure their HR strategy is looking long term as well, and to make sure HR, IT, and business unit leaders are driving change together.
While many of the vendors of HR technology have consolidated diverse functionality into single suites and added new features, that doesn't mean that customers have followed suit. In many businesses, recruitment, performance management, and training are still handled by different people and departments. That makes automation and efficiency more difficult. As these groups choose new IT applications, the conversation needs to look beyond one narrow, functional need.
HR also will need to figure out how social networking weaves into its processes, but that's a lesson the entire company is learning. Companies need to experiment, and will often learn the hard way what works and doesn't in both public-facing social networks and internal ones. They need to share those lessons across the company.
It's a good time for top executives to pressure HR to have a bigger impact. There's an expanding toolset today for doing interactive performance tracking and getting deeper insight into your company's talent pool, while also wringing more efficiency out of automation. HR and IT teams working together should be able to get results.
Jim Rapoza is a freelance writer and editor with more than 16 years experience using, testing, and writing about technology. Write to us at email@example.com.