E-HRM Challenges and Opportunities

Introduction

HR executives are looking to technology and the information it provides to help them drive decisions that will lead to success of the organization as a whole (Wilcox, 1997). Snell, Stueber, and Lepak (2002) observe that HR can meet the challenge of simultaneously becoming more strategic, flexible, cost-efficient, and customer-oriented by leveraging information technology (IT). They point out that IT has the potential to lower administrative costs, increase productivity, speed response times, improve decision-making, and enhance customer service all at the same time. The need for cost reduction, higher quality services, and cultural change are the three main forces that drive firms to seek IT-driven HR solutions (Yeung & Brockbank, 1995). The rapid development of the Internet during the last decade has boosted the implementation and application of electronic human resource management (e-HRM) (Strohmeier, 2007). According to Strohmeier (2007) e-HRM is the (planning, implementation and) application of information technology for both networking and supporting at least two individual or collective actors in their shared performing of HR activities. Virtual HR is emerging due to the growing sophistication of IT and increased external structural options (Lepak & Snell, 1998). Surveys of HR consultants suggest that both the number of organizations adopting e-HRM and the depth of applications within the organizations are continually increasing (CedarCrestone, 2005). IT is beginning to enable organizations to deliver state-of-the-art HR services. Many experts forecast that the PC will become the central tool for all HR professionals (Kovach & Cathcart, 1999).

One of the impacts of IT is that it enables the creation of an IT-based work place (Othman & Teh, 2003). Advances in IT hold the promise of meeting many of the challenges of the HRM area in the future such as attracting, retaining and motivating employees, meeting the demands for a more strategic HR function and managing the “human element” of technological change (Ashbaugh & Miranda, 2002). Over the past 5 years, the use of technology in human resources has increased dramatically and is now a vital aspect of many personnel-related decisions such as collecting job information, recruitment, employee selection, training, and performance management (Chapman & Webster, 2003). HRM could support technological innovation to achieve high performance while technology innovation could serve as an approach to enable HR function to focus more on value-added activities in order to realize the full potential of technology and organizational strategy (Shrivastava et al., 2003). The biggest benefit to organizations of using IT in HRM is the freeing of HR staff from intermediary roles so that they can concentrate on strategic planning in human resource organization and development (Pinsonneault & Kraemer, 1993).

In e-business, the implications for the HR function are not yet fully visible, but it is certain that e-HR will revolutionize the HR function within the three next years. The main challenge in e-HR is the alignment of processes in the HR function according to the future e-business challenge (Svoboda & Schröder, 2001); similarly observed by Caudron (2003) that IT can automate other routine tasks such as payroll processing, benefits administration and transactional activities so that HR professionals are free to focus on more strategic matters, such as boosting productivity. Increased use of human resource information systems (HRIS) allows professionals to achieve improved performance and thus facilitate participation in internal consultancy activities (Softworld Report, 1997). In latest research, Hussain, Wallace, and Cornelius (2007) observed that for senior HR professionals, strategic use of HRIS is increasingly the norm, irrespective of company size and this had led to the HR profession providing a value-add for the company. According to them strategic use of HRIS enhances the perceived standing of HR professionals within their organizations, a view however, not shared by their more senior non-HR executives.