In the past few months, one of the global leading enterprise solution companies came for project management consulting on the HRMS (Human Resources Management System). At the early stage of the project, there always pops up the same serious question --- How to Select an HR Solution?
Before we talk about “HOW”, let’s talk about “WHY” first.
Human Resources is one of the most important departments for each company, no matter the company has only a few or up to tens of thousands of employees. The HR department not only works on staff tracking, salary calculating, but also controls company cost and even helps on increasing profits. An HR solution is therefore one of the best ways to keep everything work smoothly. So, why do we need an HR Solution?
Here are four main reasons of implementing an HR solution:
Improving HR and the whole company’s productivity. An HR solution can help handle most of the daily work such as leave and attendance management.
Complying with labor legislation. An HR Solution is supposedly set to follow local labor laws. Otherwise, it will be troublesome.
Reducing error. Neither a company nor its employees would accept errors on salary calculation. An HR Solution helps to takeover this piece of serious work.
Performing HR analyses and review. An HR solution stores all kinds of employee data including personal information, daily attendance, leave and payroll data. Such data is affecting a company’s current and futures situations. Hence, BI can be involved to tell stories and help on decision making.
HR Solutions are growing quickly nowadays. A good and successful HR Solution not only reduces the HR department’s workload and chance of error, but also provides different views of company performance and industry comparison.
However, what is the definition of a good and successful HR Solution? In fact, it’s not about “WHAT”. It is about “HOW” to choose the most suitable HR Solution for your company. Next, we are going to talk about “HOW”.
Nowadays, there are so many HR Solutions on the market. But are they all suitable for your company? Of course not. Choosing an HR Solution is not as simple as choosing Windows or Mac OS. It can be a huge investment of the company. Generally speaking, a company’s HR Solution would not be changed or upgraded for at least 5 years once selected. So, companies really need to take their HR Solution selection seriously. Then how to choose a most suitable HR Solution? Here are five important factors to consider.
Among hundreds of HR solutions, prices can vary a lot. Companies should firstly understand how much they can afford for it. They should carefully estimate and plan the budget as companies normally adopt more than one enterprise solution like the accounting solution, the workflow solution and the CRM system. If a company can only afford a medium price range on the HR solution, choices of high cost shall be excluded during evaluation.
Understand the type of function that fits the company and remove choices of the infeasible ones. Most HR solutions have basic modules including attendance, leave, payroll and profile management. In addition to these, some companies would like to have other functions such as talent management, reporting and claim management. To search for a requirement-matching solution, business users should take down their business cases and identify a list of requirements to fit those, and then check with the HR solution specialists or consultants for their opinions. It happens sometimes, though not recommended, that customization can be added. It is observed that the system possibly becomes unstable due to customization.
This is an important part of choosing the right HR Solution. It is all about compliance with local labor laws. For example, the United States have FMLA, ADA, FLSA, labor law posters and other human resource laws. Different countries have different labor laws to protect both employers and employees. Companies not complying with local labor laws will easily get into trouble. When choosing an HR solution, companies should make sure the solution understands and meets all local labor laws. Otherwise, risk becomes very high regardless of how good the solution might be.
The HR solution may not be the only enterprise solution the company is using. There can be many others like a financial system, an accounting system, an ERP system and BI tools all coming from different software companies. If a company wants to integrate and share data among different solutions, API is the common way of software integration to build up software scalabilities. For example, Company A has been using a BI tool for years, and they are currently looking for an HR solution to reduce the HR staff’s workload of consolidating data for reporting use so that they would allow BI analysis on the company’s HR status to drive their next action. In this case, API is a best choice to integrate the two systems so that HR data can be gathered from the HR system and analytical dashboards can be built using the BI tools. The API of an HR system can build up an overall unified and powerful solution for the company.
Before making a final choice on the solution, companies also need to consider the solution provider’s supporting policies including what service-level agreements (SLA) will be included and how long it can maintain. A good service support can release the stress of HR staff and avoid any inconvenience or difficulty legally and organizationally.
Choosing a suitable HR solution is not a daily routine for most clients. Companies need to take into consideration different views and factors. We can recommend a few approaches to clients when they choose a solution. But most importantly, clients should invest time in seeing demos with features and use cases they prefer and "feel" the solution. Explora Consulting has rich experience in enterprise consulting covering evaluation among solutions on the market based on requirements and pain points provided as well as implementation and support. We have done many similar cases to serve our ongoing clients with HRM solutions and Retail solutions including CRM, POS and BI. If you are interested in exploring more about our service on this topic, please contact Explora Consulting and we will be glad to discuss with you about solutions and approaches that can bring value to you in both the short term and the long run.