The rules and regulations of hiring people, as well as the tools used to manage employment, continually evolve. Changes to legislation introduce new challenges, whilst developments in HR software attempt to alleviate the administrative burdens associated with employment.

In this article, we look at three future HR software developments and explain how they could affect your business.

1. Cloud computing

Significant reductions in technology costs and increased Broadband speeds, coupled with an on-going need to slash operating costs, has seen many businesses outsource IT systems to the Cloud.

• 84% of companies are transforming the way in which they handle human resources functions.
• 85% of those companies are doing so to cut costs.
• 75% are seeking greater operational efficiencies.

(Source: Human Capital Trends 2011: Evolution/Revolution – John Malikowski, Deloitte Consulting.)

Hosted applications and services (also known as Software as a Service, SaaS) allow businesses to access up-to-date systems for a monthly fee, without the capital expenditure entailed by a traditional on-site installation.

As more business systems are moved to the Cloud, it is only a matter of time before HR software joins the exodus. In terms of day-to-day operations, Human Resources will notice very little difference, as most of the improvements and changes take place “behind the scenes”.

For the wider business, improvements will include:

• Lower capital expenditure on software installation, maintenance and administration.
• Less downtime. Cloud-based HR software is run on enterprise-grade IT systems and managed by a dedicated IT team to reduce outages.
• Fixed cost operation (you pay your Cloud licence fees on a set basis), allowing for accurate forecasting and budget creation.
• Being able to access HR systems on the move, or from a remote office, as standard.

"SaaS can create the possibility of rapid business-model innovation, improved service levels, and new ways of controlling costs — powerful stuff for companies responding to the after-effects of the economic downturn and the pent-up business demand for HR." – Human Capital Trends 2011: Evolution/Revolution – John Malikowski, Deloitte Consulting.

Some HR software providers are already offering hosted versions of their software, so you should expect to see this trend to continue. Eventually Cloud-based HR systems could become the norm.

2. Increased use of self-service

There are hundreds of day-to-day tasks that the Human Resources team needs to complete, many of which are time consuming, diverting staff from tasks that actually help generate income. Many of these tasks involve collecting data from employees before re-entering it into the HR system, sometimes leading to errors as the information is transcribed incorrectly.

Self-service add-ons for HR software allow employees to enter their own data directly into the system. The benefits of this approach are quite obvious:

• HR staff are freed to focus on other important tasks.
• More accurate data collection. Because the information is only keyed into the system once, there are fewer points of potential failure, and therefore less chance of something going wrong.
• Shared responsibility. Staff play a part in keeping their own data accurate and up-to-date, thereby involving them more in managing their own employment, and providing further time savings to the HR department.

Staff can be provided with a way to update status changes, without needing wider access to HR systems too. Changes to addresses, contact numbers and next of kin data can all be completed by an employee, for instance, without ever having to involve someone from HR.

“Companies with successful self-service implementations reported a staff-to-employee ratio of 1:151 while companies without self-service had a ratio of 1:99. In addition, employees experience improved quality of service.” – Hunter Group 2000 HR Survey.

Self-service is now a cultural norm in many aspects of professional and personal life, so adoption of HR self-service systems is certain to grow in the near future. Already common in many large firms, self-service HR will also make its way into the SME market as standard.

3. Big Data analytics

Big Data promises to revolutionise the way in which businesses operate, thanks mainly to improved analytics and data processing. As the name implies, Big Data is essentially the collection, collation and analysis of vast data sets.

At the moment, sales and marketing are the major focuses of most Big Data projects, but the applications for such technologies are virtually limitless. As Big Data proves its worth in initial pilot schemes, other business units are likely to adopt systems and procedures based on vast data sets, one of which will be Human Resources.

Using vast data sets, HR can gain a detailed insight into its staff, their operations and how the two interrelate to affect company profitability. Big data and analytics will allow companies to report on current operations, but also use predictive analytics to accurately plan for and mitigate risks as part of the wider business strategy. Big Data-driven HR will help:

• Develop predictive models to handle staffing in various business scenarios.
• Identify and nurture high-performing staff, grow those who demonstrate particular potential, and predict potential leavers so that retention packages can be prepared in advance.
• Clearly understand various intangible factors that play a part in company profitability, such as long-term ROI on training investment of staff morale levels.
• Identify previously unseen trends that negatively affect productivity, such as absence or workforce reform projects.

Because Big Data unifies HR data with information from all other aspects of your business, you can gain deeper insights that were previously unavailable when information was stored in “silos”, with each business unit maintaining their own data sets.

"It's important to understand the experiences of your company's employees and customers, and to get to that, you have to focus on understanding the individual, and the only way you can do that is knowing as much as you can about those people.” – Yvette Cameron, vice presi dent and principle analyst, Constellation Research.

Some companies are also looking at ways in which Big Data can be used to identify potential job candidates in advance. Using publicly accessible data from professional social networks, such as LinkedIn for example, businesses can aggregate information into their own HR databases for additional analysis and pattern matching.

"Recruiting has always been an art, but it’s becoming a science." Dan Shapero, vice president of talent solutions and insight, LinkedIn.

Having HR software with the functionality to handle large amounts of data and analyse it in this way will become increasingly important. HR systems that already feature specialised recruitment modules, such as those offered by SnowdropKCS, are well-placed to assist businesses looking to make the most of the ever-increasing amounts of data available.

Predicting the future in any capacity is difficult, but there is one thing that is certain for the destiny of HR, and that is that technology will play an increasingly important part. HR software will continue to evolve and develop to help professionals become more efficient and to make better use of their data for the good of the company. Using the insights gained, the HR team will also be better placed to prove its value to the business, and help to inform future strategy and record effectiveness of new initiatives.

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