Human Capital is a critical component of business innovation, and hence success. It encompasses knowledge, skill, creativity, psychological state, and organizational dynamics. Firms that invest in effective acquisition and allocation of human resources nearly double their financial performance indicators, as shown by a McKinsey study. Therefore, investing in a sound human resource management system (HRMS) is a key driving factor in improving business performance.
As there are a plethora of HRMS available in the market, you must narrow your search down to a solution that aligns best with your needs, budget, and value system. Here are critical questions that you can ask HRMS vendors during the evaluation process.
What is the Core Functionality of the offered HRMS?
HRMS solutions are available in several forms. Some systems allow you to integrate with other applications that manage customer relations, accounting, and procurement. Other systems are more specific and can offer you in-depth analysis in a particular application. Yet other systems completely outsource your HR management to another agent. They will take care of payroll management, compliances, tax deductions, expenses, and reports.
Identify your needs and convey them to the vendor for more information on relevant offerings.
How does it handle Digital Payrolls and Organizational HR Data?
A good HRMS supports digitized payroll management, which meets the legal compliances of different territorial jurisdictions and cost centers. Additionally, it must allow you to structure the workforce into functional units, so it facilitates reporting across the managerial hierarchy. Each employee’s role in the organization is clearly defined and is transparent for the entire workforce. It reduces inter-department communication barriers. Additionally, the HRMS must record and maintain employee data for better employee self-service.
How does it facilitate talent Recruitment, Development and Retention?
Ask your vendor how the HRMS enables you to promote your brand to external and internal talent and allow them to apply for jobs and make referrals. The portal should collect, categorize and store resumes for future use. With a ready candidate bank, you can reduce the search times taken to fill vacancies. A good system should also allow your resource management team to schedule interviews and negotiate appropriate offers.
Additionally, the software should allow your resource team to track employee development, evaluations, disciplinary actions and other protocols that create an engaging and safe work environment.
Once recruited, employees look for growth. The HRMS should allow them to discover career paths within your firm and promote training and up-skilling. Evidence shows that engaged employees are motivated to perform better and contribute to the success of their company. Some applications allow mentors to onboard new recruits and interns into the HRMS. Thus, you can build an ecosystem of a contingent workforce, increasing your bargaining power while vying for priority projects.
How much cost, time and effort does it save with regards to Employee Timesheet and Benefits?
Studies show that using an effective HRMS can free 40% of your HR team to allow them to engage in activities that add higher value. HR solutions that automate timesheet activities, overtime clock, and leave management give your team more control over task flow and improve efficiency.
What are its Reporting and Analytics capabilities?
The best benefit you can expect from a good HRMS is its ability to track and monitor your employee growth. Ideally, you should be able to prepare and implement succession plans, address skill gaps well in advance, and quantify costs and benefits. With carefully designed metrics, the system should highlight potential problems – such as managerial failure in teams with high attrition rates and burn-out episodes.
How can we customize and scale Monitoring and Analytics Reporting?
If you choose cloud-based HRMS, you must find out how the software can be customized and scaled to include machine learning and predictive analytics. If you host the system on your servers, up-scaling may be more challenging and costly, but you must be clear on its roadmap nonetheless.
In summary
Investing in a good human resource management system is a step in the right direction towards business efficiency. It allows you to manage employee skills, tasks, performance, and health to optimize the work environment for all stakeholders involved.
