Leveraging IT for HR management in firms

Notwithstanding the pervasive use of information technologies and systems in business, it’s not uncommon to find small and even mid-sized companies still using Excel spreadsheets for HR data records.  One for basic information, one for pay information, one to track employee absences, one for performance evaluations … the list goes on.

The trouble is the data on these different spreadsheets often do not match.  Result?  Instead of focusing on improving services or on strategic issues, HR professionals find themselves spending considerable time and effort chasing down data buried in paper files or spreadsheets. And in identifying and fixing discrepancies.    

 The need for automation of key processes is critical in HR departments today as HR is widely recognised as the heart of a company. It’s the information center for the most important asset of any organisation – its people. It follows therefore that how information related to employees is managed could significantly impact the bottom line. This is where Human Resource Management Systems or HRMS help.

A computer based HRMS acts as a bridge between human resource management and information technology.  Essentially, an HRIS is a database or a combination of databases that share information.   An HRMS would, or should, rank among the most critical business systems within an organisation. What it does is to aggregate and synthesise employee information across the enterprise. Not only that:  With automation of data the chances of data entry errors and discrepancies between records are significantly reduced.

Evolution of HRMS
Using relational database as a foundation, an HRMS essentially allow enterprises to automate many aspects of human resource management, in the process reducing the workload of the HR department while increasing their efficiency by standardising HR processes.

When complex Enterprise Resource Management (ERP) applications started becoming popular, a majority of top notch ERP solutions such as Oracle, SAP and PeopleSoft carried some flavour of human resource management in them. But these applications were so expensive that only large enterprises with deep pockets could afford them.

Cost apart, these applications not only required large mainframe computers to run them but highly skilled programmers for their operation and maintenance.  Nonetheless, the emergence of HR automation technology made a significant difference, particularly to large organisations employing thousands of people across locations and geographies.

Earlier, the employee-related paper work in these enterprises was so voluminous and tedious that HR had virtually no time for anything else!  In fact, the department itself was called not HR but Personnel department and the work they did was overwhelmingly transactional record keeping. 

In the late 1980s, a whole new set of computing possibilities for HR opened up with the emergence of personal computers and related trends in computing – in particular  client- server architecture, a  computer system architecture designed to harness the power of various computing resources available to users in a network. Client-server architecture offered a cost-effective way to access the same information for different reasons and for use in different ways. 

Coupled with the growing use of personal computers in offices, the HR department was now able to employ more sophisticated talent management techniques to support key talent decisions; for instance, the use of computer based tools and forms for evaluating employee performance.

In effect, the ‘90s was a decade that saw a pronounced shift in HR’s focus, from personnel management to processes designed to improve the quality of workforce-related decisions.  In other words, the emphasis was no longer so much on maintaining transactional records as on transformational activities that would add value to the organisation.

In the first decade of this century, widespread adoption of the Internet has allowed the HR department to share data more efficiently beyond independent HR processes.  The impact of technological advances such as Software as a Service (Saas) and cloud computing is already been felt in how HRMS are deployed in enterprises. 
 
Main components
Human resource management systems available today offer a variety features and tools but in general most human resource software programmes are developed around the following four key areas of HR functionalities:
Payroll module: This module automates the pay process by gathering data on employee time and attendance, calculating various statutory deductions and taxes, and generating periodic pay cheques and employee tax reports.   In advanced systems, automatic monitoring of employee hours is enabled, either through a “clock in” systems or a tracker connected to employees’ desktop computers.

Time and labour management module: This module helps an organisation’s cost accounting by assembling and analysing employee timekeeping information.  The module applies electronic timekeeping devices and methods to record ‘In” and “Out” time of each employee. With most systems, it is also possible to track late-coming and patterns of absenteeism – information that could come in handy during employee performance reviews.

Benefit administration module: This module provides a system to administer and track employee participation in benefits programs.  Benefits typically encompass insurance, compensation, profit sharing and retirement.

HRM: This module cover various HR aspects. Essentially it enables HR personnel manage the pool of human capital available within the enterprise – in terms of keeping a track of the training and development of the workforce and the skills and qualifications of each employee, in addition to basic demographic and address data. 

Other Modules
Recruitment: This module helps organizations hire the right people. It includes, among others, processes for managing open positions/requisitions, applicant screening, selection and hiring, correspondence, reporting and cost analysis.

Employee Self Service:  Why trouble HR staff when you can handle it yourself? That is the logic which underlies this module. It’s a powerful tool that enables employees to view personal information that they are authorized to view and update it themselves. Benefit: cost & time savings.

Training and Development modules: These modules are integral to comprehensive HRMS, but some organizations may have them as “independent” modules but linked to other HRMS modules.

Apart from distinct modules, you could also have dashboards that offer a graphical view of key human resource indicators, and automated reminders for performance reviews, company events, training, anniversaries, and so on.
 
Key benefits
•Implementing an HRMS can significantly cut down time, effort and paperwork involved with managing the HR managing function the traditional way.  In a nutshell, an HRMS can:
•Automate HR processes, and organize and increase their efficiency
•Provide a single point for easy access to employee profiles
•Improve recruitment processes
•Accurately administer career development
•Ensure efficient workforce deployment

Companies can buy an HRMS or develop one in-house. But to be effective an HRMS should be flexible and scalable in line with the growth of the organization and the changes that come with it: new employees, offices, compensation and benefits changes, and rules. Security measures built into the system and integration with other systems are equally important considerations.  
                                              
(The writer is Director – Technology, Arctern, A Subsidiary of Volt Information Sciences, Inc)