The latest stage in the evolution of the internet has arrived. Phenomena like YouTube, MySpace and Flickr are making online social networking more popular than ever before. Is this a passing fad for cyber-savvy fashionistas, or something more serious? Rob Lewis asks if Web 2.0 is going to put the human into human resources.

It’s been almost three years now since Web 2.0 entered the geek vocab, and if you haven’t heard of it yet, you’ve almost certainly used it. MySpace, YouTube, Flickr; all these tremendously popular sites are of course examples of the next step in the unstoppable evolution of the internet. At first glance it might not appear the most productive technology in the world, but used properly this technology could save HR departments a lot of time.

Historically, the term was coined by O’Reilly Media, and refers to the increasing use of the web as a platform rather than an application. Why have a drawer full of expensive CD-ROMs when you could just log on to an up-to-the-minute, online application for free? Witness the emergence of web-based Google Docs & Spreadsheets, a potential rival to the almighty Microsoft Office, both of which are just one example of Web 2.0 technology.

Web 2.0 is more than just free software, though. In fact, it’s so multi-faceted and omnipresent, even the experts have a hard time agreeing what it is. James Alexander is CEO of Zopa, one of the new wave of Web 2.0 start-ups. Described as an “on-line marketplace for social lending”, Zopa allows customers to lend or borrow money to each other, and has already attracted a lot of media attention.

The next generation

“I’m slightly wary about the term [Web 2.0],” says Alexander. “It means nothing and everything. To some people it’s just the next generation of the dot.com boom and bust. I wouldn’t offer this as a definition, but it’s the period in which consumers and organisations are deriving real benefit from the internet. In the initial boom-bust there were few that did, but that was still a useful time because it deployed a lot of infrastructure, and what’s happening now is people have learnt how to use that infrastructure, which is delivering services and products in a way that wasn’t possible before.”

One thing everyone agrees on is that in its latest incarnation the internet has become more community-based and collaborative, allowing people to consume on their own terms. A very obvious example, remarks Alexander, is the music industry: 20 years ago we would all listen to the same music, buy it from the same shops, and listen to it in the same charts. “Now that’s been totally transformed,” he adds. “You can stick something up on YouTube and become an overnight sensation.”

The internet has evolved to allow individuals greater self-expression than ever before. So how will organisations benefit from this Web 2.0 technology? Flexibility is probably the key, argues Alexander. “People want to live life more on their own terms, and the same is true of the choices people make in their work. Yes, people need to be paid, but they don’t want to be defined by their work. They want to work on their own terms, and the internet can give them a lot more flexibility around that.”

Potentially, its effect on HR could be utterly transformational. “In traditional terms an HR department was quite a centralist function, and I think Web 2.0 almost allows employees to ‘consume’ HR the other way round, and therefore almost set the parameters under which they want to work. I think it challenges HR as to how they’re going to respond to it. How are you going to open yourselves up, to work with people, to define what HR is?”

Numerous organisations up and down the country are already beginning to find out. Andrew Unsworth is head of e-government at City of Edinburgh Council, which recently signed a £10million outsourcing deal with BT to implement a new “e-HR” service. The first department goes live in June, with the target of rolling the programme out over all 22,000 employees by December.

Going live

“We’re using e-HR as self-service HR, which is really about setting up an HR self-service centre where employers can do a number of transactions on-line with the centre or with their managers,” he explains. “That’s pretty standard practice being rolled-out across a number of organisations now, but this is probably the biggest in local government.”

The idea for the project has been distilled over the last three or four years. “We did some strategic review of our HR functions,” says Unsworth, “and it was felt that HR resources were very much focussed on administrative record keeping rather than support, strategy and development.”

Reshaping HR in this way allows greater time to be spent on these important roles, argues Unsworth, reshaping the service to become a value-adding contributor to the organisation. In addition to this, the council are also expecting to make very substantial efficiency savings of up to £1.5million a year.

The scope of the programme has yet to be fully detailed, but it will definitely include basic level transactions like pay enquiries, expenses claims, annual and special leave authorisations, and a training course register, all of which employees will be able to perform on the internet. The council are also going to run an online e-learning package as an adjunct to the project.

“HR staff are excited about the investment,” he says. “Although as with all big business projects there’s a lot of debate. There will always be cynics. One of the key concerns with line managers is that it will lead to more work for them, having to approve claims online rather than just signing off a pile of paper, which would then get sent off to someone else to type into the system. But we’re running a lot of workshops to demonstrate how much time the new system will save.”

The other aspect of the programme that concerns managers is the danger of losing their personal relationship with HR. An HR department less-burdened by basic admin will have more time for more important issues, but how badly will the personal touch be missed? Unsworth admits that is something which remains to be seen. “The test of this will be whether you can keep the best of both worlds,” he says.

Here to stay?

The council of Edinburgh’s strategic partner in implementing e-HR is BT, which has been operating e-HR internally for a number of years, and a long-standing relationship with the council made them obvious contenders for the role. BT’s lead consultant on the project is Jackie Smith, who says web-based HR is a growth area for small and large employers alike.

Smith argues that e-HR benefits everybody, even techno-phobic line managers: “The managers get even more out of it than the employees do. They can manage their staffing profiles a lot better. You can actually see absence analysis records for example, and start to see patterns emerging fairly quickly. By doing it in self-service it is actually making their job easier.”

The key is having a proper change management programme in place, says Smith. “You have to spend a lot of time working with them because it’s a cultural change. Initially they may feel ‘oh goodness me, now I’ve got to do this on the internet’, but previously they did it on several million spreadsheets and bits of paper. It’s far better management control.”

The decreasing costs of IT and the simplification of relevant software are other catalysts in the inevitable integration of Web 2.0 and HR, according to Smith. There are also countless other possible further benefits in the form of online recruitment, pensions, benefits reporting, corporate announcements and insurance management.

In any case, even if it’s not something you implement, it’s something you’ll have to be aware of, as recent news has shown. Since the advent of the blog there have been repeated stories about staff sackings for the posting of indiscreet remarks. Conversely, Sony MBG launched a new marketing strategy this month that made active blogging amongst senior staff “obligatory”. If you’ve yet to dip your HR foot into the Web 2.0 waters, rest assured, the tide is rising.