“In this blog, we will go through the concept of e-HR, reasons of HR transformation, the requirements, implementation process and some drawbacks of HR transformation”
What is e-HR?
The most simple definition of e-HR is the automation of Human Resource Management systems using modern technology. Most of the company is now thinking HR as a portal instead of a person. e-HR is a data-driven HR system mostly managed or controlled by technology. It can be a simple web portal or a complex Enterprise Resource Planning (ERP) system depending on the requirements and capability of the organization.
A revolutionary change has been noticed in the world of business over the last couple of decades. Most of the world’s renowned companies have turned their organization into digital workplaces. But the automation of the HR system has not been developed accordingly. Now, the tide is turning as the companies have realized that HR can play a major role in helping organizations to be digital. So, the companies are increasing their budget in HR automation.
Why are companies transforming their HR practice into the digital system?
According to Deloitte’s “2017 Global Human Capital Trends” report, 56% of companies are redesigning their HR programs to leverage digital and mobile tools, 51% of companies are currently in the process of redesigning their organizations for digital business models and 33% of HR teams are using some form of artificial intelligence (AI) technology for their organization. All these indicate that the HR system is undergoing a significant transformation. Here, we will explore the reasons why companies are focusing on the digitalization of their HR system.
Cut costs and time
A digital HR system can reduce a large number of unnecessary costs and work hours. For example, If a company uses Applicant Tracking System (ATS) to sort the CVs instead of one by one selection it will save a large amount of work-hour and money as well. Also, using digital HR will obsolete the necessity of employing a large number of HR personnel in the organization. A two to five members’ team will be capable enough to maintain the HR activities depending on the size of the organization.
Expand or improve services
e-HR or HRIS helps to evaluate the employee performance, sort the competent CVs, analyze employee attendance and leave status and prepare automatic reports based on the inputs. It helps the decision-makers to make decisions timely and accurately. Also, it helps the employees to set a clear goal or target for them and present a clear picture of their success and failure regarding the achievement of their individual target through Performance Management System (PMS), Appraisal, Learning Management System (LMS), etc. Also, it helps to provide necessary service to the external stakeholders through Customer Relationship Management (CRM), Recruitment, Applicant Tracking System (ATS), etc.
Access to data for employees and managers
It is very important for the senior level management to have a clear idea about the activities of the employees and their manager. In traditional HR systems, it is very difficult for the top level management to access the employee’s personal file and work report one by one. Digital HR systems enable the opportunity to easily access the data for employees and managers through Performance Management System (PMS), Workforce Management System (WRS) and HR Analytics.
Provide real-time data/metrics to the decision makers
Digital Human Resource Management systems use the HR analytics tools to provide real-time data/metrics to the decision-makers. It helps them to make significant decisions on time. In traditional HR, it took a long time to prepare the performance metrics or any other HR report as the HR personnel needed to go through a long process from collecting data to preparing the report. But e-HR has made the process easier by providing real-time data in a convenient way.
Maximize the employees experience
Employee satisfaction largely depends on how they are being evaluated by the organization. e-HR provides a clear picture of employee performance appraisal. It sets a clear goal for the individual employee and shows him every stage of the goal that s/he has achieved. It almost eradicates the chance of being discriminated. Thus, the employee’s experience is maximized.
What are the options to implement e-HR?
Companies can choose one of the many options of HR software implementation based on its size, budget, and requirements. Here we will discuss some commonly used HR software implementation processes.
Inhouse development using external vendors
Companies can go for in-house development using external vendors. This is the most cost-effective approach that provides a more complete solution. Here the most important thing is to decide whether to go with a single platform or an integrated solution e.g. using multiple small modules of different platforms.
Integrated Solution: In an integrated solution the whole system is built on a single platform. This system offers a common User Interface (UI) for all the applications/modules therefore, it becomes user-friendly and easy to understand.
Best of Breed (BoB): In best of breed, the company picks different applications/modules from different vendors based on their functionality and requirements. For example, a company can pick the “Leave and Attendance Module” from one vendor and the “Performance Appraisal Module” from another vendor. In this approach, the User Interface of all the applications may not be similar but companies can choose the most appropriate module for each fanfiction of HR.
purchase and install
Instead of going for in-house development, the company can directly purchase ready software that matches their requirements. Also, companies can install their HR software from open source for free. Purchasing any ready software or installing it from open source may require some modification but it reduces the budget and time to a greater extent. However, it is more suitable for small and medium businesses. For large organizations, it is more efficient to go for development.
Software as a Service (SaaS)
In SaaS, the company does not go for any development or installation rather they purchase the subscription of the remotely developed software. SaaS applications are also known as on-demand software. In the system, the owner of the software sells the subscription to many companies and maintains the software for every organization. Normally, a company goes for a SaaS system when they do not want to take the hassle of maintenance or are not capable enough to develop one for their own.
What does it require to transform HR practice in the Digital system?
Implementation of e-HR can play a vital role in the overall HR functions of the organization. But HR system implementation has some requirements. The organization must ensure some prerequisites before starting the digitalization of their HR system.
Change the views of the employees
There are some people who never want to be changed. They are comfortable with the so-called conventional process. It is very difficult to make any technological change in a company that has people with this mindset. So, it is very essential to change the views of the employees before making decisions to implement HR software implementation so that they can be ready to go out of the box and cope up with the change.
Technically sound users
Most system implementation fails because the users do not have enough knowledge of using it. So, before the implementation of e-HR the organization should access the technical soundness of its users. If the users are found to be technically incompetent, the organization should offer the necessary training to them. Otherwise, all the efforts of HR automation will go vain.
An adequate IT support
To implement HR automation successfully, the organization will need a skilled IT team. Some companies think that they will need no IT personnel as they are playing to buy software from external vendors. But almost every piece of software needs upgrading or customization. Especially, when the software has been developed for a dynamic sector like HR. Also, the IT personnel is necessary for smooth maintenance. So, it will not be wise for the company to go for HR automation, in fact, for any kind of automation, without ensuring an adequate IT team.
Companies need to allocate a sufficient budget for HR automation. The budget is not only for the software development also it is needed for maintenance, technical training of the users, and additional equipment.
Some people say that the personal relationships between the organization’s employees and HR people may disappear due to HR automation. But to keep pace with the time, it has now become the necessity to digitalize the HR systems. To do this smoothly the company should open two-way communication e.g. it should consider what the employees are feeling regarding this change.