HR technology professionals will gather next month at Walt Disney World at a time they are living a kind of fairy tale—complete with some scariness.
After years of toiling away as a kind of corporate stepchild on systems given little respect, HR software specialists are suddenly rising in stature. Kings and queens of the business world are starting to see employees as their real crown jewels, and as a result those who set up and run talent management systems are becoming more important. What’s more, applications for recruiting, assessing and developing workers are moving beyond the back office and onto the computer screens of many more workers.
Given HR techies’ newfound attention and clout, it’s fitting that this year’s annual conference of the International Association for Human Resource Information Management is taking place at Disney’s Contemporary Resort in Orlando, Florida, with a view of the famous Cinderella Castle.
But like any fairy tale worth its salt, the HR technology saga today has its uncertainties and frightening features. Observers have noticed a pause in spending on new HR system projects amid a weak economy. The landscape of HR software vendors is in a period of great upheaval, with new entrants and ongoing consolidation. HR outsourcing continues to be an option. That may boost the bottom line for firms, but can spell job loss for internal tech professionals.
And HR techies are finding that positions of greater power in the corporate court come with new potential headaches. Nov Omana, a consultant and former chair of the association, says the hottest trend in HR software is the emergence of social networking. Networking tools along the lines of Facebook and MySpace promise to boost productivity, collaboration and even employee engagement. But they also can lead to problems such as spam and inappropriate blog postings. "There’s definitely a dark side to this," Omana says.
IHRIM’s annual HRMStrategies and Technology Exposition is one of the major events of the year focused on HR software. During each of the last two years, the conference attracted about 700 attendees.
IHRIM was founded nearly 30 years ago as a group of HR and information technology professionals seeking to share tips of their trade. That spirit continues at the professional group’s conference taking place June 1-4, with 2½ days of educational sessions covering a range of topics.
These include Sterling Saving Bank officials describing how they put in place a Web-based system allowing employees and managers to access and change data. An executive with the Hartford will discuss HR outsourcing at the insurance firm. And in keeping with the interest in social networking, there are sessions titled "Building Networks and Connections—Onboarding with Web 2.0" and "Social Networks: Forms, Features and Strategic Implications."
Last year’s show in Houston featured about 90 organizations in the exposition hall, many of them software vendors. This year, sponsors include the giants of the HR software arena, Oracle and SAP.
Historically, many HR departments found themselves getting little love at budget time for software systems compared with requests for finance or sales applications. But that has changed amid corporate fears of talent shortages and growing recognition of employees’ importance to the bottom line.
Human capital management applications now represent one of the fastest-growing categories of business software. Particularly hot are talent management tools, which refer to software for key HR tasks such as recruiting, performance management and employee development. Revenue from human capital management applications is forecast to rise from $6.3 billion in 2006 to $10.6 billion in 2011, according to AMR Research.
The growing importance of HR systems not only has bumped up the status of HR techies, but it has also triggered a frenzy among vendors. Firms that once focused on selling just one type of talent management tool have been racing to expand their wares and offer an integrated talent management suite. Oracle and SAP, which have long sold core HR personnel management systems, have been beefing up their talent management offerings.
Wild cards in the mix include Workday, co-founded by industry legend Dave Duffield, and Lawson. Both Workday and Lawson have announced new core HR systems as well as some talent management tools delivered as a service over the Internet—a new approach seen as easier to manage compared with the traditional method of installing applications on a company’s internal machines.
It’s like Dodge City, says Michael Littlejohn, IBM’s vice president in charge of human capital management for the public sector. "It’s a pretty schizophrenic market," he says.
To help simplify the chaos, IBM is putting together broad packages of HR tools for public sector clients. The packages include IBM’s own Cognos analytics software as well as products from Monster Worldwide, Oracle, Plateau Systems, Saba and Taleo.
Christa Degnan Manning, an analyst with AMR Research, expects to see more of this from technology services firms like IBM and Accenture.
"You’ll start to see the service providers partner more closely with the software providers," she says. Many organizations are not sure how to configure HR software, Degnan Manning says, and company leaders want strategic advice about how to piece together HR systems.
She’s not the only observer to notice companies struggling to get the most out of HR software products. Last year, research firm Bersin & Associates found that 41 percent of organizations using performance management systems have trouble getting employees and managers to use them. Bersin also found organizations with multiple applications from the same vendor report that their talent management systems offer just slightly better than "fair" assistance toward key talent goals such as retaining top performers and ensuring quality of hire.
With so many challenges on their plate, some HR technology professionals may wish they’d never moved up to the plusher parts of the corporate castle. If so, that wish may be granted. Omana sees a slowdown in HR technology spending. "The market is really softening," he says. Degnan Manning predicts double-digit growth in the HR software market this year, but also notices a pause in projects as executives facing a recession rethink strategies
For ambitious HR techies, shelved projects likely mean frustration—even a sense of returning to stepchild status. A fairy godmother may be in order, and Disney World is as good a place as any to look for one.