The corona pandemic’s consequences keep coming up. Many HR managers headed the crisis team and took on the entrepreneurial responsibility of leading the company through the crisis. Despite their efforts, according to Deloitte’s study, only 39% of managers and 29% of ordinary employees are satisfied with their professional development in their company, and the ongoing crisis keeps these figures unstable.
Meanwhile, Personio research found that only 28% of HR teams feel very prepared to help their businesses remain resilient. That’s why businesses are paying more attention to the role of the HR department and its strategic value to the company. In this article, we’ll discuss why HR software is increasingly used to manage HR tasks.
What Challenges Push HR Transformation Forward?
The Business Wire report states that over 50% of companies use HR software, and it looks like this number will continue to grow in 2023. In 2019, for comparison, it was 2.5 times less.
Why do companies focus on improving HR? Because human capital is the key to success in the ever-changing business environment. If you look at the biggest challenges that business and HR managers face today, you quickly realize that the more the environment changes, the more rigid internal processes usually remain. Thus HR departments strive to focus only on well-proven methods of problem-solving. Talking about challenges, here are the top four of them.
1. Change management
It’s probably no surprise that change management tops the list of the biggest HR challenges in the world. Companies with change management ingrained in their operational DNA are far more likely to thrive.
Successful change management is characterized by several recurring elements:
- A clear vision on the part of the leadership
- A committed leadership team that successfully controls the change processes, continuous communication (almost to the point of over-communication)
- Regular review of the processes to ensure optimal to ensure processes. Communication is vital as it allows the organization to steer the momentum positively during this time of stress and change.
Unfortunately, it is hard in the modern world to maintain sustainable implementation of required changes within a company.
2. Leadership development
Another long-term item on the list of people management challenges is leadership development. No company can develop its long-term vision and plan without bringing it to fruition through highly qualified executives.
Polls show that when leadership teams adopt a growth mindset, approximately 47% of their workforce will trust their company more.
3. HR effectiveness measurement
Each corporate function must demonstrate the return on investment. HR management is no exception here, and improving information systems makes this task easier. Today, narrow-targeted software can provide information about headcount, employee spending, recruitment numbers, and sometimes even employee morale throughout the day.
Due to the ongoing digitization, it is reasonable to predict that this particular challenge will shift to the lower end of the ranking over time. However, it will still be up to HR managers to achieve the desired results.
4. Organizational efficiency
With ongoing digitization and the rapid rise of the B2B SaaS industry, optimizing organizational efficiency should become easier in the years to come. Of course, that’s just the theory. The reality is that an organization’s performance is still heavily driven by the two key challenges we’ve already looked at – change management and leadership development.
The wide range of HR software makes it easier for all areas, from human resources planning to employee engagement, sales, and travel expenses. Recognizing opportunities for improvement and using these opportunities is the task of management and the culture of innovation within the company.
What Is HR Software?
HR software is a comprehensive human resources management system. The system includes all the functionalities necessary to manage your workforce and improve the following processes:
- Recruitment and hiring
- Onboarding, cross-boarding, and offboarding
- Employee engagement
- Training
- Succession and development
- Payroll
- Compensation
- Workforce analytics and planning
Most of all, HRM systems are popular in enterprises with 500-1000 employees. However, a growing business also requires an effective personnel management system due to a continuing need for qualified personnel and geographically distributed enterprises.
Excel spreadsheets containing employee lists, salaries, and sick leave no longer meet the requirements. Companies require multi-level systems with timely updating information and extensive features, such as human resource information systems (HRIS), employee record tools, mobile compatibility, entering performance review data, approving expense claims, and more.
Tips on How to Choose an HRM System for the Business
To find the right HRMS solution for you, use this step-by-step guide to make a practical decision.
1. Evaluate your HR issues
Define the full scope your HR department faces daily. Analyze the list of particular challenges to determine the features you need in an HRM system.
2. Determine a budget
The software price depends on current business requirements, and you don’t have to break the bank for modernization. You can choose a cloud-based solution with a basic HR toolset and scale the system with extra features as you grow.
3. Choose a vendor
Find out if a vendor understands the HR sector’s issues, ensure that their HRM system supports integration and customization, and ask for a demo to ensure your choice.
4. Make a decision
If the demo version suits you completely in all parameters, you can proceed to the implementation phase. After implementing, ensure employees are comfortable with your human resources software and confident using it.
As we mentioned above, change management can be a decisive factor for future success. Employees’ support also matters.
Forewarned is Forearmed
Before investing in HRM software, ensure you don’t make some common errors businesses can face when selecting and implementing a new HRM system.
No clear goals
Before implementing a new HR software, you should answer the following questions:
- Do you have a clear HR strategy?
- Do you really need these solutions? Why?
- How can you benefit from implementing them?
- Is this software a long-term support or only a temporary solution?
Stakeholders’ support
Implementing a new HRM system is always associated with additional costs, so it might be challenging to gain executive buy-in. For example, senior management can question investing in a new system or needing a third-party consultant.
A lack of resources and budget
Ensure you have a sufficient budget to cover the work of a dedicated project team, allocation for business process management, organizational change management, ongoing maintenance, etc.
Attempts to accelerate the implementation
When setting key dates and milestones, consider all the project activities, including consultations with third parties, internal meetings, data migration, training, etc.
Over budget
In addition to integration costs, there are costs associated with data migration, organizational change management, and post-implementation support. When planning your HRMS implementation project, you should consider them all.
What are the Long-term Business Benefits of HRM System?
Without digital processes, many tasks, such as master data maintenance, have to be carried out manually. In addition, many companies still use paper-based processes, which are more complex and time-consuming. For example, employees still record their times on paper or in Excel spreadsheets, which entails long approval times.
Thanks to all these savings in terms of time-consuming activities, your HR department can focus on strategic issues again. Effectively, your most important advantages are:
- Time-saving
- The mapping of all HR processes of a company
- Versatile reporting
- Focus on strategic HR issues
- Transparency of all data
- Traceability of all changes
- Consistent records
- Effective employee development
- A semi-automated payroll
- Correct time recording of employees
Conclusion
The digital solutions support your HR department in all areas – from recruiting and event management to payroll accounting. If you recognize some of the presented HR challenges and are trying to address them in your company, here is the recommendation: above all, focus on strengthening your company with reliable software. With innovative leadership and a positive attitude to change, your organization can capitalize on the increasing supply of powerful cloud technologies and increase performance over the long term.
