HR is a strategic function, essential to organizational success. These days, most people would agree with that statement – especially the ‘HRers’! – but accepting HR’s role in your business strategy begs a critical question: how are you using your HR technology to further that strategy?
In the past, HR was more a question of keeping employee records up to date and safe, hiring and firing, legislative compliance, etc… basically, administrative tasks. However, the last couple of decades have seen growing emphasis on the potential impact of HR activity on business success. Where once, HR merely managed performance appraisals, for instance, now that performance data might directly impact on reward and remuneration, and talent management, and succession planning… and so on.
Likewise, HRMS technology may once upon a time have been focused on maintaining an employee database but the latest systems have expanded to be much more sophisticated (and strategic) affairs, providing and analyzing your people data to create new insights into human resource planning with tangible effects on business performance.
How can your HRMS help you implement your HR strategic plan
Your HR strategy should focus on your people management goals, in the context of your business needs and requirements. Dealing with all aspects of employee activity, your HR strategy is, at its simplest, a route map to using your people resources as efficiently as possible, aiming to have the most positive impact possible on business performance, bottom line, brand, and competitive advantage.
From the very beginning of your HRMS project, when drawing up a business case to justify the investment in new technology, supporting your HR strategy should be among the anticipated (and planned) benefits.
So, with that business case in mind, consider your current business priorities and goals: expansion, diversification, consolidation, acquisition? What key performance indicators do you have to track progress? Think about how your HR strategy supports those priorities and KPIs, as well as how the HRMS features available on the market could help you make that strategy a reality.
In addition to reviewing your strategic direction and goals, HRMS selection includes consulting stakeholders to establish their unique requirements. General users tend to appreciate HR technology that makes their daily working lives easier in some way (e.g. an employee self-service portal). Specialist functions (such as HR) tend to look for features that relate to their specialism. The third key stakeholder group is the C-suite; this group usually has the most valuable input when it comes to aligning your choice of HRMS with your organizational HR strategy. This group is looking for features that will help achieve those overarching strategic business goals and, once you convince them of the potential benefits in the right HRMS, they can become your staunchest and most influential HRMS champions.
In a nutshell, the right HRMS can be used to improve recruitment, learning management, boost employee knowledge and skills, employee engagement and the alignment of performance and reward, all of which have a direct impact on business performance and should, therefore, be key planks in your HR strategic plan.
Selecting a strategically aligned HRMS
Much has been written on the issue of HRMS selection and there is little point in reproducing the whole selection process in detail here. However, with strategy in mind…
Ensure your business goals, HR strategy metrics, and C-suite input are included in your HRMS business case.
Incorporate appropriate strategic elements into your HRMS selection criteria.
When deciding on the ROI metrics you will use to assess HRMS performance and impact, include measures linked to your HR strategic plan.
HRMS features that can directly realize your strategic goals
A study from Procedia Social and Behavioral Sciences, Human Resource Information Systems (HRIS) in HR planning and development in mid to large sized organizations, found that HR technology, “plays a key and important role in helping with Human Resource Planning,” the key strategic benefits and impacts of the right HRMS can include:
Strategic recruitment – the raison d’etre of HR could be described as having the right people, with the right skills, in the right place, at the right time, and recruitment is key to fulfilling this goal. HRMS recruitment modules can transform your hiring practices, analyzing vacancies and unfilled positions, tailoring job descriptions and advertisements, improving candidate quality and breadth of applications, and then streamlining your onboarding practices.
Talent management and succession planning – an HRMS can assess current staffing and skills, identifying gaps and prompting recruitment or skills strategies to maximize workforce efficiency. By incorporating data on leavers, likely upcoming vacancies can be predicted and the best available internal high-performers can be identified to fill them.
Learning management modules – these can link to performance and appraisal data to bring a strategic focus to training and other learning activities. That focus can also carry over to the evaluation of learning activities, assessing the resulting application of skills and knowledge against your stated strategic requirements.
Performance-related pay – another output of analyzing employee performance is the links that can be made to reward and remuneration. It’s common for employers to reward sustained or extra effort but is that effort really supporting your strategic goals? An HRMS with sufficiently sophisticated reporting and analytics capability can show you where your compensation budget is going and whether it’s really driving ‘strategic performance’.
Predictive analytics – many systems now include predictive analytics. Such data-crunching is beyond the more basic (though still useful) operational reports focused on performance. A more complex HRMS can offer segmentation and statistical analysis reports enabling you to explore future staffing scenarios, and also genuine predictions based on combined people and business data, allowing for detailed risk analyses that can inform your ongoing HR strategic plan.
What benefits you get from a new HRMS depend largely on the benefits you aim for from the start. By incorporating more strategic goals and measures to your HR technology project from the very start, you can ensure a higher-level focus throughout the HRMS selection process, and on into the system’s implementation, go-live, and ongoing daily use. Having done so, this makes it much easier to build in strategic metrics when you come to measure the system’s ROI, giving you a broader picture of the true impact of your HRMS.
On a final note, one of the most often-quoted benefits of any HRMS is that it can free up the time of your HR team. By automating the repetitive daily transactions and processes, and by offering direct access to basic HR information (via employee self-service), the HR time savings can be significant. That time can be spent on more complex situations and cases, and on work with a more strategic impact generally – potentially a more tangible and measurable business contribution from your HRMS.