Time for a Tech Upgrade? Don’t Overlook Your HR System

What will your company look like two decades from now? What new markets will it discover? Where will its next office be located? Will automatons work alongside humans?

These are the sort of questions today’s CEOs are asking themselves. According to Deloitte’s 2017 Global Human Capital Trends, 90 percent of executives are busy building “the organization of the future.” 

There’s no one right way to do it, of course. But there’s one move every company can make to boost productivity, reduce risk, and improve management practices: Invest in a well-designed human resources information system.

Why are companies like IBM and General Electric making HR transformation a priority? They know that an outdated or incomplete HRIS can weaken lines of communication, waste precious company time, and lead to sticky compliance issues. That’s why they’re turning to modern HR technologies.

A state-of-the-art HRIS is more than an HR toy. The right system can streamline recruitment, improve onboarding, manage benefits enrollment, and produce reports that empower managers. If that doesn’t sound like the organization of the future, what does?

Tomorrow’s HRIS Is Here

But with new HR software hitting the market every day, how can a busy CEO know which tool is truly the best investment? Fortunately, it’s not as time-consuming as it seems. Just look for the following five features in your next HRIS: 

  1. It’s backed by a reliable company.

Adopting any new technology platform means entering into a relationship. Partnering with the wrong company can cause your team stress, frustration, and hardship, which can cripple employee morale. An unreliable provider could also leave your company hanging when it needs help the most, resulting in lost time, productivity, and profits. 

Be diligent in vetting providers before you invest. Start by investigating each company’s financial situation. Will it be stable for years into the future? Inquire about user testing, too. What features did the company test with users, and how did those users react? Ask about about the company’s responsiveness when issues arise. You don’t want to be alone during a service outage or other hiccup. 

  1. It supports employee self-service.

How many hours per year does your HR team spend explaining benefits and enrolling workers? Dozens? Hundreds? For a company with hundreds of employees, those hours can easily number in the thousands.

That’s why any modernized HRIS system should support employee self-service. By liberating your HR team from their most tedious and taxing tasks, you increase the time they can spend achieving mission-critical objectives. 

To understand whether a system makes the cut, ask yourself these questions: Is the program user-friendly? Could someone who’s never touched HR technology before navigate it? Does it contain useful features, such as alerts and mobile accessibility? 

Then, determine whether it meets employees’ HR needs, such as reporting time, enrolling in benefits, completing paperwork, and reviewing paycheck information. Will it make your HR team’s life easier? Does it aggregate time card information? Can it automate data auditing? Does it allow for ad hoc reporting? If you can answer “yes” to every question in the last two paragraphs, the program passes the test. 

  1. It integrates easily with other software.

An HRIS system has to do a lot. Not only should it speed up day-to-day HR operations, but it should seamlessly integrate with your other systems. Hitting snags during installation such as incompatibilities can set implementation back weeks, if not months.

Check that any HRIS system you’re interested in can exchange data quickly and easily with your other software. Look for an open application programming interface, which means the software can trade information on a real-time basis rather than batch by batch like older programs. It also means the software is progressive, allowing it to communicate with software that has yet to be built.

One more place to look? Learn how the HRIS system transfers data to in-house systems and those of external partners. If you work with a 401(k) provider, staffing firm, or employer of record, be sure your software plays nice with theirs. 

  1. It’s flexible enough for all regulation and compliance reporting.

With a cornucopia of labor laws across the local, state, and federal levels, it’s easy to make a costly mistake. As usual, prevention is the best medicine. A well-designed HRIS can help your HR department manage requirements related to unemployment, worker’s compensation, paid sick leave, wage notifications, and many other HR subcategories. 

When it comes to compliance reporting, there are two areas you need to assess. The first is automation. Does the system handle compliance reporting in a way that suits your HR team’s needs? Can it accommodate regulatory revisions, such as potential overtime pay changes? Does the system update automatically, or does it require manual configuration? 

The second area of concern is flexibility. Is the HRIS flexible enough to support your company’s long-term strategy? Does your HR team have the numbers, tools, skills, and qualifications to manage the system as your company grows and regulations shift? If not, is the HRIS backed by a partner company that can make these changes on your behalf? 

  1. It provides informative and on-demand management reporting.

Whether you know them as OKRs, KPIs, or some other acronym, your company is probably already tracking metrics related to your strategic plan. Any system you select should do this for you. But the best HRIS will go one step further: It should also issue ad hoc reports on a variety of metrics.

“Is this truly an important feature for an HRIS system?” you might wonder. Take worker’s compensation. By reporting on the frequency of claims and the severity of injuries, such a system can help you identify and resolve critical (and costly) safety issues.

Make sure, too, that any system you choose can handle essential management reporting — from paid time off hours taken to turnover rates to healthcare expenses. Ensure it recognizes and flags abnormalities so costly mistakes aren’t overlooked. 

Leading a company into an uncertain future isn’t easy. It means guessing at what the business will need in two, 10, and even 20 years.

But if there’s one bet you can safely make, it’s this: You’re still going to have workers to manage, and you’re still going to have an HR team short on time. Regardless of what else happens, there’s no doubt a next-generation HRIS is a smart investment.

Peter Limone

Peter LimoneVerified account

Peter Limone is president and CFO of Innovative Employee Solutions, a nationwide employer of record specializing in HR and payroll services. IES is one of San Diego’s largest women-owned businesses and one of its "Best Places to Work.”
Peter Limone

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