Finding the “best fit” HR software solution for your firm.
by: Ayman Badawi
The right HR Software has long been an essential tool for businesses, from small and medium to multinationals, providing a host of benefits across any organization and improving employee experience.
An efficient online HR software, with its automated processes, not only saves valuable time but leads to improving decision-making in other areas of the business.
the knock-on effect is significant.
Companies now must shift from viewing technology only through the lens of the Human Resources department to recognizing that HR systems serve the company as a whole.
When embarking on a digital transformation that will ensure a successful implementation of the HR software, two stakeholder categories must be considered:
- Internal: including Management, HR Team, and, most importantly, your ultimate “customers”, in this employees
- External: the software vendor
Many HR Professionals will naturally focus on the external stakeholders, but look a little closer, and you’ll find it’s the internal ones that should be prioritized as they are the key beneficiaries of that transformation.
This leads to several important questions:
1. Do I have the Management’s buy-in?
Is the Management on board with this transformation, and will they provide the full support to ensure that the implementation and roll-out are successful? A supportive CEO or manager could lead to an 80% success rate. However, if the answer is “no” or “maybe”, you need to ask yourself the next question.
2. How can I get the Management onboard?
An attractive return on Investment (ROI) for the Management will depend on the following factors:
- Efficiency: Almost 70% of the HR tasks can be automated, which can be converted into Manhour and Cost. Manual and Routine tasks can be automated, which will save hundreds of hours. Also, tasks such as approving vacations, expenses, attendance, and more, can be delegated to team leaders through the platform itself. According to a study by KPMG (2019), 88% of HR professionals who have invested in digitalization felt it was well worth the investment.
- Scalability: HR Software supports company scalability without the need to add additional resources. HR Professionals spend a big chunk of their time on transactional tasks such as Leave, Employee Data, Payroll, and endless emails to follow up on Performance Management, candidate tracking, and employee attendance (to name a few). HR Software will ensure these activities are automated with the correct workflow, delegation, and notification.
- Employee Experience: Employees can easily use such tools for vacation requests, clocking in and out, and even printing their payslips through their mobile apps or laptops. As a result, it will save hundreds of hours per year.
- Improve Business Decisions: They say, “If you can’t measure it, you can’t improve it.” HR Software provides streams of data that can be aggregated and analyzed through crucial metrics.
3. What are we looking for in HR Software?
A standard, the short answer is “best practice.” A longer one often includes a list of features and modules, many that may not be required. An all-encompassing “best practice” answer can confuse matters; what is “best” for some organizations may not be for others. A better solution is “best fit” for your own company by taking into account the following factors:
- The size of your organization: The requirements of a 10,000-employee organization are very different than for a small firm of 10.
- The maturity of the HR Function: Why should you pay extra fees for Learning Management System (LMS) or Talent Management System (TMS) if your organization has not rolled out a periodic performance review. This is like buying a Formula 1 car while living in a forest.
- Resistance to change: Most HR projects have a significant element of change management, which the HR team and the Management should be receptive to. A new HR software could never replicate every component of your current policies and procedures. Embrace that change.
Once the above is defined, you are ready to address the external factor.
Before going on a shopping spree and wasting hours of research, identify your requirements. Find that “best fit” for your company with the following simple method of evaluating potential vendors:
1. Categorize your needs into three sections:
- Core: The must-have modules or features; the ones that will reduce manual and transactional activities. They include Leave Management, Payroll, Gratuity Calculation based on local labor laws, and Attendance Tracking.
- Operational: These are operational and strategic and will address your current or near-future business goals and include Timesheets, Expenses, Performance Management & Recruitment ATS (Applicant Tracking System).
- Strategic: These address your mid-to-long-term strategic HR & Business goals, such as Learning Management System (LMS), Succession Planning, Career Path, or Talent management System (TMS) as a whole.
2. Expand research on your must-have features:
- Leave Management
- Configurable based on company needs
- Ability to add company-specific leave type
- Attendance management
- Overtime Calculation
- Performance management
3. Rank your categories based on importance to your organization’s goals. All modules/features under each category will carry the same number. For Example:
- A core is “3.”
- Operational is “2.”
- Strategic is “1.”
4. Devise an evaluation system for all features. Here’s an example: Prepare an evaluation sheet that has five columns:
- Category: Core/Operational/Strategic
- Module/Feature: Configurable based on company needs
- Rank: 3, 2 or 1
- Evaluation: Your evaluation (Could be a scale from 1 to 10; 1 being does not meet the requirement and ten being Outstanding)
- Score: Multiply the Ranking by the evaluation (3 x 6 = 18).
- Final Score: The Final score will be the sum of scores of each item in the sheet. This will be the most objective way to select software.
5. Allocate a budget and get it approved by the Management, facilitating the search for vendors in your price range.
6. Contact at least ten vendors for their pricing before selecting 3 to 4 for a demo presentation to your stakeholders. They, in turn, can evaluate each option with a scoring system that can be aggregated later to decide the most appropriate vendor. Invite the decision-maker to make the final call.
Remember, there is no universal “best HR software” on the market. To find your “best fit,” address your Internal factors to be ready to tackle the external ones. So be diligent, endorse change and ensure the buy-in from all stakeholders.