Lecture Outline

17

The Future of Human Resource Information

Systems: Emerging Trends in Human Resource

Management and Information Technology

CHAPTER OBJECTIVES
After completing this chapter, you should be able to do the following:

 Discuss the short-term future trends in HRM

 Discuss the long-term future challenges for HRM and tactics to handle them

 Explain the impact of future trends in IT/IS and workforce technologies on

the operation of an HRIS

 Understand how HR and IT/IS are combining for future HRIS business
applications

INTRODUCTION
 Before we analyze future trends in HRIS, it is appropriate to revisit how we
got here. In Chapter 1 we noted that, with its changing and expanding role,
the typical personnel department started keeping increasing numbers and
types of employee paper records. Computing technology began to emerge as
a way to store and retrieve employee data. Early advantages of using
computing were that (1) the HR departments could obtain the records much

1
 faster for managerial reports (e.g., total number of males and females in the
company) and (2) the employee records were more accurate than paper-and-
pencil records. In the subsequent chapters, we had an in-depth look at the
entire system development life cycle (SDLC) of an HRIS that included
planning, analysis, design, implementation, and maintenance (Chapters 2–
6). We also looked at the specific applications of HRIS in some of the core
functions of HRM (Chapters 10–15), for example, talent management,
recruiting and selecting, training, compensation, and globalization of HRM.

 There is no doubt that technology has radically altered the world of work.
Today, one can work anytime and anywhere, using any device, possibilities
that have globalized the workplace and given it a 24/7 work cycle. Although
HR has evolved from an administrative to a strategic focus, transactional
activities, such as HR administration, legal compliance, and benefits
management, still consume a major portion of HR resources.

 The move to computer-based HR systems, though, has helped greatly in

shifting HR professionals toward more value-added transformational
activities by enabling the automation of routine, transactional activities.

 With the increasing focus on strategic HRM and developments in

technology, HR professionals are deploying innovative technology solutions
to address their core challenges, such as talent management and workforce
metrics and analytics.

 Multinational enterprises are leveraging HRIS to align their information

technology, processes, and people to replicate their HR policies and
practices across global operations. Some enterprises also use HRIS for
effective disaster planning and recovery during various crises, such as
terrorist attacks and natural disasters.

 The contribution of technology to strategic HRM has been limited, and

some research indicates that HR professionals view enterprise resource
planning (ERP) vendors as “overpromising and underdelivering” in this
area. In other words, organizations have done a great job at automating basic

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 HR functions and reducing staff, but organization leaders are questioning
whether these changes have delivered enough strategic benefits.

 It is important to remember that technology is only an enabling tool and not

a solution or panacea for HR-related problems. Instead, the successful
implementation of an HRIS depends on many different factors, such as the
organizational culture, leadership, and managerial competence and the fit of
the technology with organizational processes. In addition, many
organizations fail to implement technology successfully because of their
inherent rigidity, inertia, and resistance to change by employees, as covered
in Chapter 9.

Future Trends in HRM

 Forecasting the future is, in general, quite difficult—and even more so in

HRM. Although one can examine past trends and extrapolate to the future,
there can be unexpected contingencies, such as the financial crisis of 2008–
2009.

 To examine any future trends in the HR field, one must look within and
between countries, since labor laws differ from country to country and, thus,
could have a significant impact on any new developments in HRM for that
country. Thus, future trends in HRM in the U.S. are covered in this chapter,
along with future trends in HRM, IT, and HRIS in multinational companies.

 Although this chapter focuses on trends that are affecting HRM in the
United States, it is important to remember that some of these trends will also
be true for other countries while others may differ somewhat in terms of
specific future trends within another country or culture. We briefly discuss
six trends that will impact HR in the coming years.

HEALTH CARE
 For organizations, health care costs are a growing concern. In a recent
survey, rising health care costs were identified by nearly 90% of executives

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 surveyed as an important challenge facing their organization in the next 2–5
years

 Chief financial officers identified health care costs at the number-one issue
facing their organization. To address these concerns, organizations are
turning to wellness initiatives, others are reconsidering what health plans to
offer, and most are passing increased costs on to their employees.

 Not only are health care costs increasing in the United States, but with the
passage of the Patient Protection and Affordable Care Act (i.e., Obamacare),
HR departments are facing a number of issues associated with its
implementation. For example, some organizations offer multiple health
plans, some of which are available only to highly compensated employees.

 The new law makes some provisions of these plans illegal if they are not
available to lower-compensated employees as well. In addition,
organizations will have to consider the penalty costs of not offering health
care to employees and the makeup of their workforce (e.g., full-time, part-
time, or contingent) as they determine how to best comply with the new law,
as well as offering plans that best serve their employees.

BUSINESS INTELLIGENCE
 HR is under increasing pressure to show that its policies and practices add
value to the firm (e.g., to show positive ROI, as discussed in Chapter 8.). To
address these pressures, HR is increasingly turning to the use of business
intelligence to support complex metrics. Although covered in greater detail
in Chapter 7, we also discuss data analytics and HR metrics here because
they are growing in importance to HR departments in most large
organizations.

 Many organizations already have basic reporting capabilities, but they are
increasingly looking to incorporate more sophisticated metrics to better
support HR programs (e.g., training). Consider that each year SHRM brings
together a panel of experts to address the most important upcoming concerns

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 facing HR, and one of the panels is specifically focused on metrics. Three
key predictions from these panels about metrics are as follows:

o Organizations will increasingly demand that HR better measure and

assess the value of their human capital initiatives.

o The increasing use of metrics may lead to a standard and widely accepted
set of metrics to “describe, predict and evaluate the quality and impact of
HR practices and the productivity of the workforce.”

o Organizations begin to transform their view of HR, from that of a people

function to more of one focused on decision science.

 Essentially, with the increasing use of metrics and data analytics,

organizations are bringing “decision-making tools such as environmental
scanning, scenario-based planning, hypothesis formulation, and testing and
organizational development tools to improve workforce management
decisions.”

DEMOGRAPHIC WORKFORCE CHANGES

 The workforce in the United States is undergoing a dramatic transformation

on multiple fronts. First, it is becoming more diverse. More women and
minorities are entering the workforce than ever before. For example, nearly
60% of working-age women are now in the workforce, compared to only
40% in 1970 (Bureau of Labor Statistics, 2011).

 Also contributing to the diversity of the workforce is the growth in the

Hispanic American (Hispanics) population in the United States. Currently,
Hispanics make up 15% of the U.S. population and account for more than
half (50.5%) of its population growth (Pew Hispanic Center, 2010). They
are also expected to compose at least 25% of the population by 2030 (U. S.
Bureau of Census, 2009).

 Additionally, there is a major demographic shift occurring in the workforce.

Baby boomers are postponing retirement. Recent data from the Bureau of
Labor Statistics suggest that the fastest-growing age groups in the workforce

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 will be those over 65 years old, with projections suggesting that
participation of those over 65 will have grown by over 80% between 2006
and 2016 (Bureau of Labor Statistics, 2008)! At the same time, this same
study identified a coming problem. The participation rates of those less than
25 are projected to decrease by 7% over the same timeframe. This means
that organizations will have a workforce that has much greater age diversity
than they are typically used to managing.

GROWING COMPLEXITY OF LEGAL COMPLIANCE

 One of the most important themes moving forward for HR will be the
growing governmental and agency compliance requirements. Human
resources has always been affected by legal compliance, but many would
say that the pace of regulations continues to grow. For example, the EEOC
continues to develop additional guidelines, and states continue to pass
additional regulations on issues as varied as hiring practices to workplace
safety. In addition, the recent negotiations due to the recent “fiscal cliff” has
resulted in a change in the Social Security tax rates for all employees and
the raising of taxes for high-earning employees. Human resources will need
to be prepared to implement these changes, and additional changes are likely
to occur in the coming years.

 Changes due to the new Patient Protection and Affordable Care Act will
require human resource departments in organizations from the very small to
the Fortune 100 to comply with a myriad of federal requirements and very
likely state mandates as well.

 What will HR departments need to do in response to these changing laws

and compliance guidelines? Essentially, they will need to have the
information to support adjustments to the way that HR operates. But they
will also have to ensure that the HRIS applications they are using have the
ability to handle these changes.

VIRTUALIZATION OF WORK

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  A final trend in HRM on which we briefly touch is the virtualization of
work. No longer are employees confined by physical or temporal space.
Employees can conduct work anywhere and at any time. “The virtual
workspace can be defined as an environment where employees work away
from company premises and communicate with their respective workplaces
via telephone or computer devices” (Lockwood, 2010).

 Text - Figure 17.1 lists several keys to managing virtual meetings

successfully. Given the growing use of virtual teams, organizations will
increasingly need to be aware of the benefits and pitfalls of managing
employees in the virtual workplace.

Future Trends in HRIS

 When examining future trends in HRIS, it is impossible to separate the
future trends in IT/IS without relating them to the field of HRM. The
knowledge economy is being profoundly influenced not only by the
intensity but also by the speed of technological evolution.

 Information technologies have been steadily evolving and improving from

mainframes to client servers and now to Internet/Web interfaces. Network
communication technologies (broadband and wireless), convergence
technologies (e.g., cell phones and PDAs), collaborative tools (e.g., Web 2.0
and portals), service-oriented architecture (SOA), rich Internet application
(RIA), and business intelligence HR software systems are some of the
notable developments that have affected the field of HRIS and its related
technologies and, in turn, the practice of HR.

 One the most critical aspects of the emerging technology is a focus on more
efficient and accurate decision making. The goal of intelligent HR software
is to replace the traditional approach to decision making with an approach
that makes a better decision in the most efficient manner. This technology
can help organizations improve the use of the human capital and increase
the organization’s competiveness in the market.

BRING YOUR OWN DEVICE

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 The first trend in technology that will affect HR and HRIS is mobile
computing and “bring your own device” (BYOD). The change is a dramatic
departure from how organizations have previously managed their
technological infrastructure and presents a challenge for organizational IT
support. Previously, the most common arrangement by organizations was to
manage a centralized and tightly controlled technological platform (e.g.,
IBM, HP, Dell, Windows, etc.), and anyone who wanted to use another
platform (e.g., Mac, Linux, etc.) would potentially have problems receiving
adequate support. But today, employees are more likely to want to use their
own personal mobile devices (e.g., smartphones, tablets, and laptops) to
work.

 In a recent Forester research survey, nearly 70% of employees noted that

they would like to be able to bring their own personal mobile devices and
use them at work (Forrester, 2012). Gartner also predicts that by 2013
mobile devices will become the most common technology used to access the
Web, even surpassing PCs (Gartner, 2012)!

 The move to mobile creates some interesting issues for employees and the
organization. For example, how do you deal with the privacy issues
associated with the storage and use of personal and work data on the same
device? In addition, the complexity of managing network and data security
dramatically increases when employees bring their personal devices into
work, which means that organizations will need to rethink data and network
security practices to support these devices.

 Companies will need to develop policies in regards to the use of these

devices and who will pay for these devices.

 Along with the growth in the use of mobile devices will be the growth in
smartphone apps (e.g., for the iPhone, Blackberry, Android, or Windows).
For example, vendors such as Workday and SuccessFactors have built apps
where employees can use their mobile devices to access and connect to the
corporate HRIS.

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  No longer are employees “chained” to their desks when working with HRIS
data. For example, tablets can be used during the interview process to
evaluate applicants in a real-time manner. Employees can fill out expense
reports wherever they are located and can capture electronic images of
receipts as they incur expenses. If a workers compensation incident occurs,
HR case managers can document issues at the scene of the event, taking
photos of the situation for immediate storage in the database.

Software as a Service (SaaS) and the Cloud

 This “on-premise” approach to acquiring software was the dominant and

often the only approach available to organizations. Traditional software
development models, the “on-premise” or “home-grown” approach, are
being replaced by “on-demand” software plans, which see the company or
customer leasing access to as few or as many HR functions as it wishes to
access. This approach to accessing software has been called software as a
service (SaaS).

 The newest trend in delivering software to companies is cloud computing.

With cloud computing, HRIS functionality is delivered to companies via the
Web. For the company, there is no hardware to purchase or software to
install. Employees can also access the software anywhere they have a Web
browser. As with SaaS, companies are able to adopt only the amount of
functionality currently needed and then scale up to additional functionality.

 Organizations find moving to the cloud attractive because employees find

these systems easy to use. In the last four years, the market share for the
largest three cloud vendors (SuccessFactors, Ultimate Software, and
Workday) has increased by 361%.

 In addition, in a recent survey of companies with IT budgets over $50

million, over 85% of them were exploring ways of getting out of long-term,
on-premise contracts and are actively considering cloud vendors because it
leads to both lower up-front and ongoing costs.

Service-Oriented Architecture

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  One of the major problems during this technological evolution has been the
frustration associated with frequent system upgrade cycles. SOA may be a
solution, as it converts monolithic and static systems into modular and
flexible components. SOA is about efficient modular design and
deployment, and reusable software is at the heart of the architecture.

 SOA offers several advantages to end users, who can change the business
process when needed and purchase or develop only those applications that
are involved in the new processes.

Web 2.0

 This term refers to a second generation of Web-related services focusing on

creativity, collaboration, and sharing, in contrast to traditional isolated
information silos. Web 2.0 users not only access information but also
generate, share, and distribute new content.

 Examples of Web 2.0 technology include the following: social networking

sites (e.g., chat rooms, MySpace, Facebook), wikis (publicly available
collaborative Web dictionaries), and blogs (short for Web logs, i.e., online
journals or diaries)

 Mashups (web applications that combine data from multiple sources into a
single location or application, e.g., pulling up a rental car booking site
within an airline booking site).

 Podcasts (audio or video recordings)

 RSS (rich site summary/really simple syndication) – feeds that publish

frequently updated sites, such as blogs or news

 Personal websites

 Peer-to-peer networking (P2P) – file sharing (e.g., text, music, and videos)

 Collective intelligence (sharing knowledge to tap the expertise of a group)

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  Web services (Web-enabled instant communication between users to update
information or conduct transactions, e.g., a supplier and a retailer updating
each other’s inventory systems)

Social Networking

 Social networking (SNW) is one of the features of Web 2.0. Social

networking tools, such as Facebook, LinkedIn, and Twitter, have become
important tools for organizations, and human resources is not an exception.
Although many of these networks were originally developed to enhance
personal social connections, organizations are increasingly harnessing the
power of SNW in the workplace. For example, tools such as wikis are being
used by organizations to harness and centralize employee knowledge. Some
companies are even requiring that employees contribute to the company
wiki, making these contributions a formal component of various jobs.

 Companies are using Facebook and Twitter to help expand their HR brand
and attract employees to the organization. Many companies, such as IBM
and Deloitte, are making social networking a central component of how they
bring new employees into the organization, connecting them with current
employees and easing their transition into the company by making
information more readily available to increase employee engagement.

 A recent SHRM study has found that 20% of organizations are using SNW
tools for internal communications (SHRM, 2012). Due to the growing use of
social networking, HRIS vendors are developing applications within their
product offerings to help support employee collaboration, onboarding, and
learning. Text - Figure 17.3 provides an illustration of how SAP Jam is
designed to mimic such popular social tools as LinkedIn and Facebook to
increase employee acceptance and reduce the employee learning curve.

 Companies are also using social networks to connect employees and share
information. For example, EMC Corporation uses its social business
network, EMC/One, to generate ideas from its employees for its annual
innovation contest. After the employees post their innovation ideas on
EMC/One, they can also vote for the best idea.

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Enterprise Portals

 Enterprise portal is the general term used to refer to the ways in which
individuals can interact with each other. Enterprise portals can be
information portals, collaboration portals, expertise and knowledge portals,
operation portals, social business networks, or a combination of all of these.

 Within an HRIS, employee and manager self-service portals are powerful

examples of the potential use of such portals.

Open-Source Software

 Normally, software that is developed is copyrighted, and the source code is

neither open nor available for others. Some software developers have agreed
to a different approach to the development of software called open source.
In an open-source approach to software development, the developers make
the source code available for anyone to see and to change. This means that
other companies or developers can then expand on the product or easily
develop complementary products. Open-source software also costs much
less than traditional (or proprietary) software and is sometimes provided for
free.

AN EVOLVING HRIS INDUSTRY

 Markets and industries are cyclical. Innovations drive change and create
new opportunities. In response to these opportunities, new companies
emerge that specialize in new innovations. For example, ERP vendors first
started introducing their products 15+ years ago.

 Over time, the markets consolidated, and vendors merged, leaving a few
dominant HR ERP vendors, such as SAP, Oracle/PeopleSoft, ADP, and
Lawson.

 Cloud-based HR software is driving industry change.

 Many of the original cloud-based HR vendors have offered a best of breed

for a specific niche, such as Taleo’s recruiting product. Today though, cloud

12
 vendors are beginning to merge not only with other cloud vendors to
develop breadth across HR functions, they are also being purchased by the
major legacy vendors. For example, in the last few years, SAP has
purchased SuccessFactors, Workday has established a strategic alliance with
Salesforce.com, Oracle has purchased Taleo, and IBM purchased Kenexa.

 Mergers and acquisitions are continuing in the consulting area surrounding

cloud-based HR. For example, OmniPoint Consulting, a specialized firm
focused on Workday implementations, was recently purchased by Aon-
Hewitt to bolster their Workday offerings. Because of these changes to the
HRIS industry, it is important that you consider carefully a vendor’s
viability as you assess potential HR software options.

EVOLVING HRIS TECHNOLOGY STRATEGY

 Along with the consolidation of the vendor and consultant landscape,

organizations are reconsidering their HR delivery models. One of the
challenges facing organizations is that many of them have historically
chosen disparate best-of-breed approaches where different vendors are
added to current offerings, leading to a situation where organizations have
added technology support for automating more HR processes (as discussed
in Chapters 10–15)

 But this has created two issues for organizations. First organizations are
faced with managing the complexity of working with multiple vendors.
Second, organizations have realized that although they may have added a
large amount of technology to their processes, they have not really reflected
as to whether they are actually more effective in the delivery of HR services.
Therefore, in the next few years, we believe that organizations will spend
more time and effort assessing the most effective portfolio of HR
technology, and many will likely consider moving to some type of
consolidated technology platform. Our assessment is supported by Towers
Watson research, which suggests that within the next few years, nearly half
of the organizations surveyed are planning to consolidate or reorganize their
HR function (Towers Watson, 2012b).

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HRIS MOVES TO SMALL BUSINESS

 The last trend in HRIS that we focus on is the expanding options for small
businesses. As short as 5 years ago, the idea that a small business would be
able to adopt a full-scale HR ERP would have seemed unlikely. But these
days, products are being made available at costs that make their
attractiveness to small businesses high. One of the reasons for this change is
the availability of cloud-based solutions. Companies no longer need the
capital to invest in both hardware and software and the IT expertise to
manage the HRIS. Now, much of the risk and expertise for managing the
hardware and software is with the vendor. Therefore, small businesses are
not only able to afford access to the software, but they are also not burdened
by the technological overhead required to implement legacy systems. Now,
no company is too small to have their employees supported by HR software.

Future Trends in Workforce Technologies

 The many future trends in the HRM, IT/IS, and HRIS fields can easily lead
to confusion for organizations, management, vendors, and employees. A
solution to this confusion has been proposed by Carden (2009), and we
agree wholeheartedly: technology should serve strategic goals.

 Carden notes that the increasing competition by organizations to improve

their profitability has often led to the conclusion that new technology will
solve these issues, but the reality is more complex than that. Organizations
that are most successful are those that are able to leverage technology that
most closely links to a strong business strategy.

 Feeling increasing pressure to remain competitive and survive has led to

companies that are adopting technology to carefully diagnose what strategic
goals the adoption of technology could support. Even the most sophisticated
software is rendered powerless without a solid business strategy behind it.
As we consider the changes in workforce technologies, it is important to
keep in mind that how effectively organizations are able to harness the
power of these new technologies will depend on how well they link it to
their HR strategy.

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CedarCrestone 2010–2011 HR Systems Survey

 The purpose of this survey was to provide “a worldwide benchmark of

workforce technologies adoption and the value achieved from their use.”
CedarCrestone thus broadened its “coverage scope for both HR technologies
and emerging technologies . . . to explore over 40 applications concerning
adoption, deployment options, vendor outlook, value achieved, and
expenditures” (CedarCrestone, 2010, p. 1).

 Data for this report were collected in 2010 from 1,289 respondents
representing over 20 million employees. The sample represents companies
from throughout the globe, including North America, Europe, Asia and
Australia. The major findings of this study (in shortened form) are as
follows:

1. Organizations that have more automation across all categories of

technologies outperform those organizations with less automation on the
important productivity measures of net income growth, sales growth, and
sales per employee.

2. The respondents in the survey reported that their organizations have had
strong recoveries (from the weak economies), and they forecasted a 100%
growth in HRIS talent management, social media, and analytics and
planning applications.

3. Organizations reported that business process improvement through

techniques such as Six Sigma (Chapter 8) for recruiting new employees was
their top initiative.

4. Organizations are increasingly choosing to rent access to applications

instead of purchasing and installing these applications on site.

5. Organizations are continuing to invest in applications across all HR

functions. Administrative HRIS software for core HR recordkeeping,
payroll, and benefits is still the dominant class of technology, with
worldwide average use at 90%.

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 6. There is a continuing trend to use new “service delivery” applications, such
as employee and manager self-service systems, portals, HR help desks, and
workforce life cycle management.

7. The major increase in the use of technology to support HR will focus on

tools such as talent management, social media, workforce planning, and
workforce analytics, with over 90% growth in the next 3 years.

8. Among organizations that have installed multiple talent management

applications, in particular those companies with four or more applications
installed outperformed those companies with three or fewer applications in
terms of higher net income growth, sales growth, and sales per employee.

9. Organizations have begun preparing to use service-oriented architecture

(SOA) to automate business processes (e.g., applicant tracking).

 Finally, the survey focused on choices and investments, which are providing
a strong return to companies. These choices include the following: (1) Focus
on Career Development, (2) Use Workforce Optimization Technologies, (3)
Choose an Integrated ERP-Based Talent Management Solution, and (4)
Adopt Social Networking.

CHAPTER SUMMARY
As noted early in this chapter, forecasting the future is very difficult. However,

students focusing on understanding the field of HRIS must never forget the human

issues involved in developing and implementing an HRIS. The field of HRIS

continues to evolve, and it is important for those studying it not only to understand

what is occurring today but also to look at the environmental and technological forces

that will affect it in the coming years. If there is one central theme of our look toward

the future, it is the importance of HR policies matched with organizational change and

technology; this alignment will have the greatest impact on the future success of

HRIS and the organizations investing in these systems. For example, one of the

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findings from the CedarCrestone survey was the emphasis on change management—

to which an entire chapter of this book was devoted (see Chapter 9). Technology is

not a substitute for managerial competence and employee discretionary behavior

(Armstrong, 2005). It can only be a messenger, not a message. It is also impractical to

expect information systems to supplant the soft functions of the HR department, such

as an online electronic tutor replacing a good executive coach (Stanton & Coovert,

2004). In sum, technology is extremely important in the field of HRIS, but people are

simply more important.

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