How to choose the appropriate HR information system?
JASMINA RIDZI, HRM CONSULTANT, AMITAS D.O.O.
An adequate HR information system is extremely important for the efficiency of each organization. It enables organizations to digitize and automate the processes carried out by the HR department and to distribute some of these responsibilities throughout the organization. This results in lower labor costs and more efficient HR processes that allow employees to achieve their potential, work better, be more creative and productive, all of which lead to a rise in the company’s performance.
There are different systems on the market that provide different levels of functionality with different titles, HRIS, HRM, HCM, HXM, etc. Larger HR systems are most efficient because they offer everything that we need to perform HR function efficiently on one platform. They usually include the following modules, which can often be purchased (leased) separately:
- HR administration (organization and systemization, employee personal folders, document management, GDPR requests.),
- planning, recording and registration of working time,
- talent management (recruitment, on-boarding, performance management, learning, career development and succession planning),
- HR analytics,
- self-services for managers and employees.
When we decide on a new system, it must meet our current needs and have the capacity to grow together with our HR function and our organization. To ensure the success of the investment, the automation of HR processes and avoid hidden additional costs, it is necessary to start by setting the goals and strategy of the HR function and to take the time to explore HR systems in the market.
To select the software that will benefit your company the most, take the following steps before deciding to buy:
1. Re-examine and update your HR strategy
At the beginning of the process of selecting the HR system, it is necessary to look beyond the needs of the HR function and to consider the objectives and strategic plans of the organization. Planning the purchase of the HR system is an excellent reason to review and produce a new strategy of development of HR function, aligned with the company’s strategy, for the next few years. Why? Because HR systems provide automation of processes that previously required a lot of time and allow the introduction of HR processes that bring added value to the company’s business, such as performance management, rewarding success, career development, etc. So, start by defining the goals of the HR function and the HR processes that you will induce and then consider possible software solutions.
The right HR system is not the one that has the most positive feedback from other companies, but the one that best fits your strategy. An organization facing the growth spurt will have different needs than one whose growth has already reached a certain peak. Keeping your strategic plans in mind will help ensure that the system you choose is the right choice for your organization in the long term. Frequent system changes or costly upgrades can lead to unnecessary costs for the organization and HR processes disruptions.
2. Identify needs
After the first step, you have a HR strategy. Now it’s time to identify the main requirements for the tool that will help you achieve your goals. So, define the areas that your software needs to cover, being as detailed as possible.
Basically, every organisation needs a system that collects, organizes, and securely maintains employee data and provides standardised reports. So, a system for basic HR administration. The more the system provides automation of routine HR administration tasks, the more time it will save us.
Time saved and accuracy of data are key to the success of the HR function, hence the importance of integrating the HR system with payroll systems, time registration systems, e-learning systems, business intelligence systems and other systems. Single data entry saves time and ensures that data is consistent and up to date across all systems.
Accessibility and user-friendliness of the system must also be considered. Anytime, any device accessibility means that employees can access key data and information for them independently and at any time. Cloud-based HR systems make this possible.
The user interface should be user-friendly to ensure a good user experience and not require additional unnecessary training to use.
Modern HR systems are also a place for collaboration, communication, notifications and feedback.
When defining the required functions of the system, organisations should also consider that it should serve all employees at every stage of the employee lifecycle. Therefore, is very important the efficiency, friendliness, transparency, of key HR talent management processes such as:
- recruitment
- on – boarding
- performance management
- rewarding success
- learning
- career development
- off-boarding
These are extremely important processes that have a major impact on the success of a company and it is essential that we give them the attention they deserve. The introduction of a new system can also be the right time to set them up or update them.
As soon as your requirements are clear, create a spreadsheet as your supplier comparison tool.
3. Define your budget and time
Before you actually start looking for suppliers, it is important to determine how much money you are willing to invest. The investment is mostly divided into implementation, support and software purchase. If we opt for SAAS (Software as a Service) we will pay for the use of the software based on our number of users and the modules we use, which is the most cost-effective.
It is also important to define the time realistically. On average, medium-sized companies need four to seven months from the decision to invest to implementation, and the same amount of time for the implementation itself. The length of time depends on what you are looking for.
4. Select 4-6 suppliers to review
Once the main criteria for selecting IT equipment are set, it’s time to find suppliers and analyse how they meet your requirements. Your needs spreadsheet should be the basis for comparison, but the task is not so simple that ticking the boxes next to the features you have identified as necessary is sufficient. The quality of the implementation of a given function varies considerably from one software to another. Here you should rather use a scale with the quality ratings of a particular function. The differences between different software often lie in functionalities that you may not notice at first glance, but which can save a lot of time, in the automation of processes, in the content included and in the quality of support. It is therefore important to take your time, as you will only be able to see the key advantages of each system when you see it in more detail, which takes time.
Arrange presentations with potential suppliers, explain your challenges, goals and strategy, and ask them to demonstrate how their software would deliver on your goals and solve the problems you face.
Don’t just look at how to automate your existing processes, take the time to explore what all can be optimised and improved with new and innovative technologies on the market. It may also be that, as you review the market, your requirements will change and modernise, you may want to implement HR processes in a different way that will ensure greater efficiency and productivity.
5. Testing the best solutions
Now it’s time to try the software in demo version. Invite people who will be using the system to evaluate the functionality, the usability of the modules, the friendliness and intuitiveness of the user interface and to give their comments. Collect all comments and questions and forward them to the supplier to prepare answers.
6. Purchase decision
If you have followed the points above, this step will be easy. Select a system that will save you time, optimise your HR processes, display analytics to improve productivity, foster communication between managers and employees, and grow in line with your company’s planned growth and the evolution of your HR function. As we live in a time of constant change, it is important to avoid rigid systems, opting for a flexible system that incorporates updates in line with trends and new technologies. Choose a supplier that has experts who are familiar with HR trends and can advise. Check references, you can also contact companies that use the same system and ask them for their opinion. A new HR system can not only meet but exceed your expectations and increase employee’s satisfaction.
