We’ve all heard the phrase, “The whole is greater than the sum of its parts.” This certainly is true for an organization with fully integrated payroll, human resources and benefits services.
Unfortunately, when it comes to a human resources management information system (HRMIS), the reality for many small- and medium-sized businesses is that they fall far short of full integration.
Many companies still either keep paper records or maintain employee data in multiple spreadsheets. Some companies have cobbled together homegrown IT systems to support a particular function, such as payroll, hoping to optimize the performance of that specific process. This disjointed structuring of systems results in, for example, payroll data living in one dedicated system, and benefits in another. When these systems don’t talk to each other, information becomes isolated in disconnected departments making it tough to merge, analyze and reconcile data.
We get it. For many companies, the situation is a result of evolving business strategies based on rapid growth, or mergers and acquisitions. In the rush to keep critical employee services and information flowing, old systems and processes are often just left in place. A major undertaking like updating these systems is tough. But, if you’re ready to take the leap (or even if you’re just thinking about changing), we can help with some information and tips about what to look for in an HRMIS.
What the Heck Is an HRMIS?
Let’s start with the basics. In its most rudimentary form, a human resource management information system (HRMIS) can be that paper-based or spreadsheet system we talked about. But, for the reasons we’ve already outlined, it shouldn’t be. A modern HRMIS is HR software that houses all of your people systems under one roof: HR, benefits administration, recruitment, applicant tracking, training, compliance, and more if you want or need it. *At Paycor, we’ve built a modern HR platform we call Perform HR. *Click here to learn how Perform HR helps organizations simplify processes and become more efficient.
An HRMIS is the one-stop-shop for all of your employee data. Because it bundles different functionalities of human resource departments —benefits enrollment and insurance carrier connectivity, for example — it simplifies your overall people management.
Building a Business Case for an HRMIS
Any boss worth his or her salt is going to challenge you on your request to funnel dollars from the bottom line into building HR efficiencies. Since HR typically is not viewed as a profit center, when you build your business case it’s important to tie the investment directly back to organizational objectives. When you bring in an integrated HRMIS, how will it create efficiencies for HR to develop programs and initiatives that contribute to organizational objectives and the bottom line?
Determine the current pain points for HR. Specifically, focus on elements that are most likely to impede strategic initiatives. For example, is your applicant tracking process convoluted and disorganized, making the recruiting and hiring process a nightmare? Is transferring paper time cards to electronic spreadsheets a significant time-suck every month, preventing your department from focusing on workforce management strategy? Also, tally up how many current paper and electronic systems house your workforce data, and calculate their annual operating fees. How many hours and employees does it take to manage these systems?
Think outside the HR box and also take into account the pain points other employees experience as a result of not having an HR platform. Are employees complaining that it takes too long to get their FSA balance from HR? Does the hiring process take too long? Is it a challenge for employees to immediately get pay stubs when they need them?
Only then should you take into consideration the cost of the human resource management information system you’re looking at and compare numbers. This due diligence will show your executive team that you’ve thoughtfully considered all aspects of a change, and you’ll have hard numbers to prove the benefit.
What Components Should I Look for in an HRMIS?
When you begin your search for an HR solution that fits your workplace, you’ll likely find scores of companies offering solutions. This checklist of available options can help you determine which features are most important to your business. Right now, you might need some and not others, but be sure to consider components your business might need in the future.
Benefits Administration
Empower employees to select their own benefits elections online at open enrollment time.
Benefit Carrier Connectivity
Seamlessly transmit your benefit enrollment changes in the HR application to your insurance carrier.
Applicant Tracking System
Enables you to electronically match job applicants to open positions, identify skill shortages, and manage requisitions.
Performance Management
Helps you maintain employee reviews, track goals and objectives, manage promotions and transfers.
Employee Development
Maintain employee certifications, licenses and training courses completed.
Training Administration
Schedule courses and track attendance for learning and compliance and empower employees to enroll in and complete courses online anytime anywhere.
Employee/Manager Self-Service
Empower employees and managers to maintain their personal and team information from anywhere with an internet connection.
Organizational Management
Easily visualize the structure of your organization using a dynamic, configurable company directory or org chart.
Employee Communication
Provides a secure, customizable employee portal for important employee information and communication.
Workflow Management
Have the ability to track workflow processes (such as the hiring process) online with automated approvals and change alerts.
Document Archiving
Attach resumes, disciplinary notes, review forms and more to individual employee records, eliminating paper.
Reporting
This compiled data can provide important information in one place, from federal compliance reports to a simple employee phone list. The solution should offer the ability to customize standard reports and to create your own custom reports.
Configurable Security Levels
Define who in your organization can see certain information or perform tasks.
Audit Trails
Track changes made to employee data fields while retaining previous data.
Company Asset Tracking
Track laptops and other company-owned property.
Workplace Safety
Log employee accidents and injuries.
Benefits Offered by an HRMIS
A number of benefits can be realized by adopting an HR information system. HR managers coordinate an enormous amount of employee-centric activities that involve large amounts of data. An HRMIS provides data management and accurate and timely information for decision making; it also streamlines operational, managerial, and executive support processes.
Because an HRMIS is so efficient, HR administrators get hours of their day back by not wasting valuable time dealing with the repetitive tasks required to manage the administrative side of HR. This system will also enable you to more effectively plan HR costs, as well as manage and control them without allocating too many resources toward them.
On the employee side, an HRMIS enables employees to exchange information with greater ease – and without the need for paper – through a single location. For example, when employees need to complete frequently recurring activities such as requesting time off or electronic pay stubs and changes in W-4 forms, these procedures can be taken care of without the involvement of human resources team members. As a result, you have less paperwork, and approvals can be made in less time.
And, on the executive side, your C-suite can rest easy knowing they have a solution that’s saving them money. They can get the numbers they want, when they want them; reduce transactional costs and administrative salaries; increase service levels; and improve service delivery.
In conclusion, regardless of what features you need, in the end it’s most important to choose the solution that is right for your business. A company that takes the time to invest in a HRMIS that fits their goals, objectives, mission, and values, is a company that is investing in its future and in its success.
To learn more about Paycor’s Perform HR, check out this short, 90-second video.