HR department functions as a service offer? What developments are heading towards you? We take a look into the future
HR services are as old as HR itself. Every personnel department provides services, even if they are not always perceived to be services. What is new about HR services? And why should every HR department take a detailed look at a service offer?
One trend follows another, and HR is not exempt from megatrends such as digitization and big data. The expectation is clear: the HR department has to do “something”. But can we be a little more precise? Instead of drifting from trend to trend, why not put the issue of HR administration back in the spotlight? Boring? Not even close. This is precisely where new technologies fit in perfectly.
More than 25 years ago, HR administration experienced a hype that culminated in a series of payroll-accounting software launches. Business-process outsourcing of HR administration was also flying high in the 90s. And had its first crash. This was because outsourcing merely relocated the existing problems from the company to the service provider. And because something decisive had been forgotten: the employees. Today, the topic is experiencing a renaissance, but what do HR departments need to focus on to prevent failure?
The first wave of HR optimization had the HR department itself in its sights. The goal was to streamline HR procedures. By changing the perspective and viewing HR as a service provider, the focus shifts to what the customers – i.e., the employees – need and expect of the service provider.
This forms the basis for producing a catalogue of HR services. This is not just simple office work, however, but hard graft. This is because behind every service there is a clearly defined performance promise, which must be translated into a service level agreement – not only in terms of content, but also in terms of fulfilment time, error rate and other quality parameters – and must be transparently communicated. Because if an employee knows that, for example, an early-retirement simulation requires a two-week lead time, he/she will not be asking daily why nothing has been delivered yet.
Like every service provider, the HR department also has to optimize its services on a continuous and systematic basis. The cycle of continuous performance improvement, consisting of assessment, analysis and improvement, has to get going.
If a consistent path of the service orientation is followed, then services can be given internal transfer prices. In this way, the personnel department can actually compete with external suppliers and check whether its own costs are commercially viable or whether it makes sense to outsource certain services. Better scalability, higher cost transparency and the negotiation of tough penalties for non-compliance with agreed quality criteria are just some of the possible arguments.
Business process outsourcing is not an issue of “all or nothing”, since individual services can also be easily outsourced. So an HR organization could very well conclude that only the expenses or the employment-reference process is to be outsourced, for example.
A crystal-clear distinction between external and internal service provision is crucial for success. Who is the first point of contact for employees regarding HR issues? The service model, consisting of first- and second-level support must be free of conflicts and clearly defined for all.
The cloud megatrend is giving new impetus to business process outsourcing, as modern cloud solutions greatly simplify access to state-of-the-art technology.
But beware: it starts with the process, not the software! Transferring a bad process to the cloud simply results in a bad digital process. And to a bad HR service.
Nevertheless, the way to the cloud undoubtedly makes HR happy(-ier). As modern cloud solutions can be launched in record time, HR can react to new or changed needs quickly and flexibly with new services. This is instead of tying down HR energy in IT projects that go on for months. And the same obviously applies – possibly to an even greater extent – for external HR service providers who use the cloud to offer new services to the market. Customers benefit from falling service fees because the service provider benefits from lower operating costs for the services, and at the same time the resources required to get a new customer up and running are massively reduced.
The processing of employee requests makes a significant contribution to service quality, and this is precisely where there is underexploited potential for optimization. If it is possible to deal with a large part of the HR enquiries by oneself. In a nutshell, this means HR is open around the clock – a virtual, on-demand HR department. A central knowledge base allows employees to find information on regulations, answers to burning questions, and much more. With intelligent searching, many queries can be answered without HR having to act at all. Besides, as we all know, every IT hotline works according to this principle. First, you have to check if your own problem has already been answered. HR ticketing is therefore the magic formula for really improving efficiency in HR.
But HR has to do a few things to ensure that at least 80 per cent of all queries can be nipped in the bud. Completed HR tickets are analysed to identify HR weaknesses. New knowledge migrates into the knowledge database and outdated information is periodically cleared out. To do this, HR needs a knowledge manager and the perfect supporting technology. Software manufacturers have recognized this potential and there are already some excellent tools on the market that are perfectly tailored to the HR needs and not “just” clones of a classic ticket system.
Artificial intelligence and big data are crucial for predictable services. The ingredients: data, data, even more data and adaptive software based on deep-learning algorithms. Based on endless amounts of evaluable data, enquiries can be anticipated and trends identified before they become reality. This allows the scalability of HR resources to be optimized both quantitatively and qualitatively, especially in large organizations.
This is already working on a small scale. Even without artificial intelligence, we know that several queries on payroll accounting arise one or two days after the pay statements have been sent out.
Meet the transparent employee. Using big data, HR could even know in advance whether an employee is overstressed, when and where he/she wants to go on vacation and whether a baby or a divorce is due. But would we want to?
Published: 1. January 2017