Human resource management (HRM) has undergone a paradigm shift over the past few decades. Not so long ago, HR was perceived as a support process – a paper intensive, non-innovative function - established mainly to facilitate employee pay outs and manage their records.
However, with the advent of technology at the turn of the century, HR has evolved into a critical business function enabling organizations to become more agile and efficient in achieving their objectives. Technology enablement is helping HR departments around the world reduce manual intervention and automate routine administrative tasks such as record keeping and payroll, allowing them focus on strategic aspects of HRM.
Here’s a look at the various stages of the HR evolution cycle in tandem with the changing technology scenario - HR started out as a business function, became a business partner, and then finally, turned into a strategic partner.
● HR as a business function
Initially, HR was commonly referred to as the personnel department, and was focused on administrative and legal aspects as well as employee payroll and paperwork processing. By 1990s, businesses started to explore global markets, leading to the creation of additional layers of business. This, in turn, resulted in the redefinition of the role of HR. Organizations began to view HR as a more critical business function which needed adequate support. This is where technology innovations of the era such as personal computers and Enterprise Resource Planning (ERP) came into play. Inclusion of ERP technology helped the HR department manage, automate, and streamline the entire process chain. This freed up HR bandwidth to significantly expand its role and develop further expertise related to employee behavior. Personal computing, on the other hand, helped HR adopt computer-based tools and techniques to effectively manage basic activities such as payroll, leave, and attendance management.
● HR as a business partner
By early 2000, the landscape started to aggressively change as trade with emerging markets started to increase, leading to global operations and a diverse talent pool. HR’s role also evolved in tandem to cater to the strategic business needs such as strengthening workforce planning, talent management, and organizational structure. In order to facilitate the process, HR adopted tools like self-service employee portals, application tracking software, and online learning management applications - either built internally or procured from a vendor. As organizations attained more maturity through adoption of tools and software systems, it became necessary to further split the HR function into sub-processes, such as recruitment, learning and development, payroll and administration.
● Hr as a strategic partner
Around the end of the decade in 2010, technology solutions for data management further simplified processes, enabling HR to focus their efforts on more critical areas like retention, training, and succession planning. At the same time, cloud computing emerged as a game changing technology, redefining the business landscape. Seamless access to information over the cloud, made it easier for various sub-departments to collaborate and network better, eliminating the need for any resource to be present on-site. According to the latest PwC HR Technology survey, 40% of the 300-plus companies surveyed globally have their core HR applications in the cloud.
Despite the growing role of technology in business, human capital will continue to be the most critical asset for any organization and its effective management will be crucial to driving sustained competitive advantage. In the future, technology is expected to play an even bigger role in helping HR drive business aligned workforce strategies. In countries such as India with massive human resource requirements, using emerging technologies to connect employers with the workforce will be crucial to talent attraction, engagement and retention.