HR technology is a common challenge for small and medium-sized businesses. These challenges can usually be overcome using one human resource management system, sometimes called a “human capital management” (HCM) system.
- All HR functions should be integrated, from employee onboarding through separation
- All HR data can be captured in one secure, central location (cloud-based).
- Digitize and automate HR tasks and processes
- Employer-side self-service tools (allowing employees to input and manage their information) must be balanced with employer-side managers’ ability for lightening their HR workload
- Scale up and grow with your organization to adapt to changing needs
- To make your raw data more useful and informative support expanded, detailed reporting and analytics
- Embed artificial-intelligence capabilities that can offer recommendations on future HR tasks
- Change perceptions of HR are no longer viewed as a back-end administrative burden, but rather as a tool for achieving goals and strengthening businesses.
What are the eight most common issues with HR technology? A more robust and advanced system could help your company overcome these challenges.
- Inadequate data and poor reporting can be caused by clunky, dissimilar platforms
Are there multiple systems that only handle one aspect of your HR functions? Do you have one system that handles payroll, another for time tracking, and yet another for employee benefits management?
It’s not efficient for your HR department to keep up with multiple systems.
These piecemeal systems also require manual entry of HR data, which can lead to errors or inconsistencies.
There is a chance that some of these systems are not compatible with one another and don’t seamlessly transfer data between them. Data could be calculated in different ways between systems, and not all data may sync well.
Information is often separated into silos. This can cause data gaps in HR and poor reporting. This results in you not being able to make informed decisions quickly and effectively.
An automated, comprehensive HR management system that is fully automated can:
- Streamline HR operations
- Let HR staff go away from administrative duties so they can concentrate on revenue-generating activities
- Your HR data can be used to reduce the risk of inaccuracies or blind spots
- You can make HR data completer and more accessible to enable you to use it for strategic planning as well as day-to-day management.
2. Add-ons and IT support that is expensive and time-consuming can be costly.
At first glance, pieces of HR systems might seem more cost-effective than they are. This is especially true if you are a small business owner or a new start-up.
As we mentioned, standard software packages that only handle one aspect of HR are not compatible with other systems. To make disparate systems interface in a way that benefits your business takes technical expertise. This often requires the intervention of an IT specialist, which can be costly.
For example, the timekeeping system that seemed budget-friendly and easy to use becomes expensive once you factor in the fees for hiring an IT guru to make the system interact with your benefits-administration software.
When you consider the following:
- Regular maintenance
- Manual transfer of data from one software system to another
- Additional services available at an additional cost
Inefficient or ineffective HR technology could also waste valuable time and energy. This can also lead to costly errors that could impact your company’s bottom lines. Your business could even be fined if it doesn’t follow the laws due to problems with HR technology.
The true cost of HR systems over time can easily surpass the initial cost for a comprehensive system.
Your HR team may find it tedious to use multiple HR systems. This can be exacerbated by having to deal with many vendors. There are more people to coordinate with when there is a technical problem or question.
Support for HR technology should be easy to access via one contact.
Software developers can also deploy updates, which could cause your business to lose data and time while you reintegrate or sync your systems.
4. Inability to scale
As your business grows, you will need to use the same methods that worked for you when it was smaller or newer.
As your company grows in complexity and headcount, you will want to spend as much of your time on running the business, improving customer service, and increasing your bottom line. Here are some examples of things you won’t want to spend a lot of time doing manually.
- Tracking and appraising PTO and other leaves
- Scheduling and shifting shifts
- Administering benefits
- Handling payroll
- Update employee forms
These things can feel like distractions that are unnecessary and hold you back.
Piecemeal HR systems, unlike a comprehensive HR management system, are limited in scope and functionality. This is not a good thing as your company grows and evolves, especially when your company enters the middle market during its lifetime.
You may be faced with new questions as your company grows. To take an example, is a greater employee headcount causing your company to be subject to new laws? Your company will open new offices in other states and municipalities? This can be done without the need to hire additional HR professionals. This system could:
- Inform you about relevant HR laws and prompt your compliance
- Automate any updates or changes to the system without you having to do anything.
- Access to professionals and resources on-demand for guidance and best practice.
A larger organization means that there is more HR data to manage. A piecemeal system of HR management systems might not be able to store the necessary data to meet your company’s needs.
A system failure can cause catastrophic data loss and interruptions to your business. You can incur additional costs if you decide to store more data in the cloud than your company and increase your storage limit.
An HR management system that can scale with your business will not only save time and make it easier but may also help you shift from a tactical mindset to one that is more strategic. Your business will become more proactive and less reactive. This will empower your employees to take on new initiatives to support your vision and mission.
As your company grows or shrinks, you should consider this: A paper-based, piecemeal, or paper-based HR software system that heavily relies on manual effort, and requires multiple staff members to manage benefits, payroll taxes, hiring, onboarding, and other paperwork.
A cloud-based, fully integrated, all-inclusive HR system that automates the same functions requires fewer staff members. Your company may even be able to spend less per employee on HR.
5. Compliance questions
Many laws and regulations govern employment in the United States, including those from states and localities. This can make it difficult for businesses to comply with them. These rules are frequently updated, which can complicate matters.
It is difficult to stay informed about regulatory changes across multiple locations. This can be a full-time job even for dedicated HR specialists. Business leaders are already juggling other important responsibilities.
Non-integrated HR systems are often out of date and don’t provide timely, on-demand resources. They also lack guidance from HR professionals regarding changes in local employment laws. They don’t automatically address compliance issues, such as changes in payroll percentages or deductions, like a cloud-based, all-inclusive HR system.
A robust HR management system, however, can make these things possible and help you avoid the following:
- Long and complex investigations
6. Management of employee life cycles can be cumbersome
Consider all the HR documentation that employees have to go through during their tenure at your company.
You want every employee to have a smooth, seamless, and easy experience, from applying to the company to when they are ready to leave.
First, your application and onboarding processes can be slow and paper-based. This will make you look bad to potential job candidates. You could be losing out on substantial revenue if you leave positions open for too long. This could also mean you miss out on talented talent who might become frustrated by your process and want to move on.
Many employees want to be treated like internal customers. Employing HR technology to improve employee experience is part and parcel of customer service. It can also reduce inconveniences and annoyances.
Many employees desire to be able to manage their day-to-day tactical tasks such as choosing benefits, recording time, and requesting PTO. Your managers will be less likely to have to take on HR responsibilities if employees do more. Everyone wins.
You could also be held liable if you fail to keep and gather all documentation required for hiring or terminating employees.
Modern HR management systems allow your company to track candidates throughout their employment, onboarding, and recruitment. These systems can be used to:
- Keep organized to avoid the hassle of filling out paper forms or the fear of losing them.
- Get the information and tools you need to stay compliant
- Increase efficiency in completing daily HR tasks
- You can gauge issues like turnover and hiring costs
- Give employees more control over their information
7. Unsecure data storage and/or transfer
There have been many stories of employees’ data being exposed after a company laptop was accidentally left out in the open. Perhaps paper-based data is accidentally lost during a natural disaster. Storing employee information on a single PC or in a file cupboard can spell disaster.
To reduce the chance of theft or destruction, a cloud-based HR management system will store all data securely in the cloud.
What about cybersecurity? This issue may lead you to believe that sharing data between different HR systems is a smart move. It’s easier for hackers to hack into these systems. Isn’t it possible for your company to be more vulnerable by consolidating data in one place?
Comprehensive HR management systems could be required to meet industry standards. Privacy laws may also require them to comply with cybersecurity and privacy laws. This is to ensure that sensitive information is protected. These industry-standard certifications are:
- Demonstrate that your company adheres to generally accepted security procedures and processes
- Indicate that an external entity has confirmed a company’s compliance with the certification principles
- You need to ensure that the company meets all certification requirements and that your HR data remains safe.
8. Inability to view information on any device
People are no longer tied to their desks by a computer. This is particularly true because more employees now work remotely, a trend that’s likely to continue.
You should ensure that your software protects critical HR information regardless of where employees may be located. This is a feature that all cloud-based, advanced HR management systems offer.
Many companies make the same mistakes when implementing HR technology. These are the mistakes:
- Stop companies from reaching their goals
- Spend too much time or spend too little money
- Users are frustrated
- Slow company growth and productivity
- Place the organization at Risk
There is a simple solution that will save you money and be more beneficial for your business in the long term: implement a cloud-based, single-purpose HR management system.