Swapping out or upgrading any kind of IT system is time-consuming and costly business at the best of times, but it can become even more challenging if your people data is involved. So, it’s understandable that sticking with old, out-of-date and underperforming human capital management (HCM) applications may seem like the path of least resistance – even if it costs you more time and money in the long run.
As a result, a key problem for many employers is establishing when the time is right to move on and seize the day. To address this issue, we’ve put together an easy-to-follow guide to help you decide what’s right for you and your organisation as you continue on your digital transformation journey.
Here are five important signs that your HCM system is no longer fit-for-purpose and it’s time for a revamp:
1. Your payroll and HR teams are struggling to do more with less
The sign: Organisations with complex HCM needs and a single vendor integrated system in place often find it harder to cope with change than those opting for best-of-breed solutions. Single vendor systems tend to offer generalised, one-size-fits-all packages and tools, while best-of-breed software provides richer functionality in specific areas. As a result, many companies, although they bought a single vendor system as they thought it would make life easier, actually find it’s made their lives harder.
The situation is particularly marked for payroll and HR departments with a lot of processes that they deal with manually – often using spreadsheets rather than their central HCM applications. The result is a drop in quality and poor productivity, as output is typically less accurate and it takes people more time to undertake simple tasks.
The solution: Moving to a best-of-breed solution for essential operations, such as payroll and HR, makes sense for employers with complex HCM requirements as they have access to a wider range of feature-rich applications. These, in turn, are easy to integrate with other tools that employees find are essential to undertake their jobs effectively.
2. Your people data is dirty and there is no single source of truth
The sign: Because employee data often sits in silos in poorly integrated systems, many organisations are unable to access to a single source of truth. This means they are forced to work with old, inaccurate and mismatched information, which can in turn have a negative impact on the quality and effectiveness of their payroll and HR activities.
But even organisations that are on top of their data frequently don’t benefit from it fully. All too often interpretation and analysis is manual, or analytics tools are inadequate.
The solution: Enabling tighter integration between payroll, HR benefits and talent-based systems makes it easier to automate, and boost the efficiency of, business processes by improving accuracy and synchronising underlying data. It also enhances the levels of strategic insight available to HR teams by allowing them access to self-service analytics tools, which in turn improves decision-making capabilities.
3. Your payroll and HR teams are battling too many queries
The sign: Employees these days expect easy-to-use, convenient payroll, HR and benefits systems that enable them to complete basic tasks, such as managing annual leave, at the click of a mouse.
But failing to live up to expectations leads to more than just dissatisfied staff wasting time on unproductive activities. It also results in payroll and HR teams being swamped with multiple queries on a daily basis from employees asking, for example, how much annual leave they have left or what their current pension contributions are. This situation leads to a massive drain on time and resources and hits productivity and engagement levels too.
The solution: Ensure your HCM system offers easy-to-use self-service features, which include a clean user interface, accessibility from anywhere and single sign-on capabilities to enable seamless access to your organisation’s different internal applications.
4. Your compliance requirements are overwhelming
The sign: Keeping pace with ever-changing regulatory environments in both the UK and around the world can be a real headache for already overstretched HR teams, especially in a payroll context where legislation covers everything from national minimum wage levels to gender pay gap reporting.
The end result is that warnings and penalties from regulatory bodies for errors and inaccurate submissions can start becoming a problem. To make matters worse, HR teams simply don’t have the time to focus on the high value tasks that would actively further the organisation’s business strategy.
The solution: Make certain your HCM solution has built-in compliance monitoring and reporting tools to streamline processes and save payroll and HR teams’ time, thereby freeing them up to focus on more strategic activities.
5. Confidence in your HCM system’s resilience is low
The sign: It’s important to feel safe in the knowledge that your payroll and HR systems are resilient enough to adapt, flex and scale as your requirements change. The pandemic has exposed the limitations of on-premise software deployments, particularly for payroll teams, who were traditionally completely office-based but have had to learn quickly how to operate remotely.
If, after almost a year of predominantly remote working, you still have lingering concerns over risks like data security, the availability of essential HR systems, and the continuity of processes like payroll, it may be time to reconsider your HCM system.
The solution: Opting for cloud-based software helps employers adapt to change by:
- Supporting remote staff and ensure they can work in a secure fashion
- Becoming more confident that core business activities, such as payroll and HR, are resilient and can continue to operate
- Optimise IT operating costs.