Virtual HR - the Irresistible Force? Part 1

Jamie Liddell

Among the many difficulties facing the HR community today, perhaps none is proving as intractable nor as profound in its ramifications than the question of how to respond to the rapid automation of the discipline. The rise of "virtual HR" challenges the very nature of human resources; with more and more companies opting for increasingly hi-tech solutions devolving growing portions of the core HR burden to the end-users themselves, what is the nature of the role to be played by the remaining human participants within the process? What are the new organizational structures emerging from the interplay with the technology and how do these behave when put under the stress of, say, a financial crisis, or a ‘flu pandemic?

What exactly defines "virtual HR" is a matter of debate among HR practitioners and others - an issue further colored by the fact that many businesses and proprietary systems include "virtual HR" in their names or brands. Generally, if simplistically, it refers to the integration of information-enabled systems and automated processes into the practice of HR and the daily engagement of HR’s various functions. How this occurs and what this entails vary so widely from organization to organization - ranging from automated vacation-request processing to running training sessions through Second Life - that defining the term precisely seems like a discipline in itself.

For Tim Palmer of PA Consulting one specific aspect of virtualization stands out. He highlights a crucial change in HR practice in recent years: a shift in the point of service delivery.

"Virtual HR isn’t a term that I'd typically use," Palmer says. "What has happened over the past 14 years or so, in parallel with the rise of the Internet, is the increased use of self service capabilities to deliver HR services. For me, this self service comes in three main ways: employee self service - employees doing HR work online themselves; manager self service - managers doing HR work online themselves; contact-center based service - all parties using a remote voice-based service to perform HR tasks themselves. In almost all cases, these delivery channels have replaced talking to an HR human who will do the work with or for you."

Palmer’s organization’s work with clients in this area in recent years has been diverse. Solutions, he says, have been developed "through the use of: self service modules within traditional ERP applications, such as SAP and PeopleSoft; software-as-a-service-type applications, which are predominantly accessed via the Internet and are used to provide specific HR services - typically concerning things such as recruitment, assessment, performance management, talent management and compensation management; more rudimentary intranet based services (many companies still use more simple html based self service tools); reporting and analytics tools; outsourcing, where the above methods are incorporated into the offer or solution of the outsourcing provider."

The software-as-a-service (SaaS) model, growing as it has alongside a shift in focus towards SaaS in the wider business and social environment, poses some especially taxing questions for HR practitioners. It offers the prospect of removing virtually (that term again) all the immediate resource burden from the organization, with the majority of contact now taking place "off-site" between the end user and the systems of a third-party software provider. The potential cost-benefits - particularly attractive given the ongoing economic troubles - are significant, from start-up through to full employer engagement.

"The SaaS (Software as a Service) marketplace has advanced to the point where an HR shared services organization can be enabled entirely through the Web," enthuses Shared Services Institute president Jim Scully. "The core enablers - HRMS, Case Management, Knowledge Management, and Telephony (IVR, ACD, CTI) - are all offered on SaaS platforms. The implications for shared services are major, especially for mid-size organizations who previously could not afford the capital startup costs of shared services. What does this have to do with virtual HR? Everything. Since SaaS products are delivered via the Web, a shared services rep can be located anywhere there's a high-speed internet connection. The time for virtual shared services is now. Jet Blue, the discount airline, has 1,000 home-based reps. Many customer services organizations take advantage of home-based agents. It's just a matter of time."

Such an approach might not be appropriate for all organizations - the nature of certain blue-collar roles in particular can make constant access to internet-enabled hardware a tricky proposition - but it’s definitely proving an increasingly attractive option for many. The fact that SaaS retains a degree of impenetrability to many, and can thus be touted as an innovative, blue-sky solution to a sea of troubles, certainly isn’t hurting its cause.

Clearly, companies don’t have to go the whole SaaS hog to enjoy the benefits of some degree of "virtual HR". The attractions evangelists give virtual HR over "traditional" HR are easy to acknowledge: "The major advantages of working this way," says Tim Palmer, are "lower cost of ownership; more flexible cost base; easier access to services; 24x7 availability; more sophisticated reporting and analytics."

All the kind of things that will go some way towards relaxing the furrowed brows of the board, of course.

To continue reading Virtual HR - the Irresistible Force: Part 2>> click here