Barriers to eHRM Adoption

Although e-HRM offers enormous potential, in practice organisation often implement only a small proportion of the functionality available. In many cases, organisations have bought the functionality but failed to switch it on or use it its full extent – this is like having a powerful car parked in the garage that is used for only short, low speed journeys. Yet, if the technology to implement e-HRM is available and provides significant benefits, it raises the obvious question, “Why isn’t doesn’t every organisation deploy the maximum amount of HR technology”? Several crucial factors influence the adoption of eHRM:

❐ Competitive Strategy: HR technology strategy should be directly related to the HR and competitive business strategy of the organisation. Where the overall strategy is solely based on lowering the cost of production, a simple e-HRM replication strategy is more likely. However, if the competitive strategy is based on innovation or differentiation, the organisation is more likely to focus on good people management, leading to an enhancement or (ideally) transformational approach to technology will find it harder to justify an investment in sophisticated people management technologies, whereas knowledge-based organisations such as those in the technology, pharmaceutical and professional services sectors are likely to view people as unique differentiators where ‘talent management’ is critical.

❐ Size of the Business: Larger organisations may be more willing to invest in complex e-HRM systems because they have access to larger budgets and other resources, as well as having a larger employee population to manage, reducing the per-employee cost. Larger organisations are also more likely to deploy a large ERP system, of which the HR module forms part of the infrastructure. 

❐ Management Perceptions of the HR Role: If managers want HR to take a more strategic approach to HR, they will tend to be more supportive of e-HRM and favour a transformational approach; however, where employees and managers see HR as passive and transactional, they will tend to have a more negative attitude towards e-HRM. In some cases, line managers may see employee and manager self-service as a potential barrier to their relationship with HR

❐ HR Perception of Technology: If HR teams perceive technology to be too technical, it will be difficult to make the transition. In some cases, e-HRM leaves HR professionals cold or at best, disinterested, especially where its use is perceived as a transactional, administrative activity that does not enhance HR’s strategic reputation. For many HR professionals, e-HRM remains merely an administrative tool and its role in the development of strategic HR practice is often discounted; there is an underlying sense that somehow ‘people’ people do not need to understand or use technology. This may partly explain why the majority of HR technology investments remain at the basic administrative/ operational level; only obvious cost reduction is seen as a viable outcome of the use of technology, limiting its use to the most basic processing functions.

❐ Lack of Technical Infrastructure: It’s easy for those who regularly have access to a computer at work to access e-HRM technology – a simple web link will take them to a wide range of services – but what of those that work outside, on factory floors or in remote environments? The answer so far has been to provide employee kiosks in cafeterias or other common areas, but there are issues of privacy and lack of time in the working day that mean this is a limited solution. However, the next few years are likely to see a reduction in the cost of tablet and smartphone technologies that will solve this problem and enable people to access HR services anywhere, anytime. 

❐ Inability to Translate Requirements into a Viable Business Case: 

Making any kind of technology investment requires a strong business case, to quantify the benefits of technology and the impact on the organisation. If the project has been very technology-centred or has focused mainly on administrative processes, there may not be a good understanding of what might be possible at the next level.

e-HRM Strategies

Experience suggests that there is no ‘one size fits all’ for introducing e-HRM. Organisations typically follow one of three strategies

❐ Replication: This approach involves simply recreating the content and functions of the existing system(s). It is typically an IT ‘refresh’ activity, a strategy often followed because older technology becomes non-viable or is simply out of date. There is usually no desire to improve HR/Payroll processes or service quality – its intention is simply to reduce costs or avoid system obsolescence. Projects are relatively unambitious, with little vision and a focus only on technology, simplifying IT support and lower maintenance costs, rather than creating long-term business value. The main advantage of this approach is that it can be undertaken relatively quickly using technical resources. However, because there is no focus on business processes, it may result in missed opportunities to create business benefits and there is a risk that old processes will not work effectively under the new technology - end-users may have the same frustrations they had with the old system. It should only be undertaken in circumstances where old technology will absolutely fail if nothing is done and there is no time to take a more strategic approach. 

❐ Enhancement: This approach can take several forms and it is shaped by intention and ambition - even when an entirely new system is purchased, organisations may decide that there should be only an incremental, evolutionary impact on HR service delivery and operations. There is often little appetite to use technology to drive through major changes; it may be that the organisation does not believe that radical change is possible, perhaps because it expects resistance, lack of resource or cost issues that prevent a full transformation. It may be that a strategy of ‘change by stealth’ is more appropriate, where the technology platform is developed over a period of time. However, by playing safe, organisations may not achieve the Return on Investment needed and the lack of a technology champion or adequate resource means that projects may not get beyond the initial implementation phase; it may have the same impact as if a pure Replication strategy had been pursued. 

❐ A Transformational approach: Technology is part of a wider strategy, enabling highly devolved HR services, making managers more accountable, where the HR function takes on a more substantial role. It involves a revolutionary restructuring of HR service delivery, including the use of service centres, outsourcing and the Business Partnering model. For an organisation under cost pressure to transform HR services, this is a better strategy. The vision often includes giving on-line access to processes, policies and procedures and extensive self-service. Technology has a truly transformational role under this approach, with a major impact on the organisation, changing the roles of HR, managers and perhaps even employees. It is not an easy option and requires a large investment in infrastructure and resources to make it work, with an emphasis on managing the changes. However, the business case typically offers a good payback.  

Organisations have a choice as to which technology strategy to pursue and the approach typically depends on factors such as culture, expectation, previous experience, an awareness of what is possible and the strength of the business case.