Every organisation has data about its people in some form or another. In some cases, it is just payroll data; in others it is held in spreadsheets; some organisations are even lucky enough to have some form of HR information system (HRIS).
It is very common for HR to think their data is not up to scratch. The problem with this is that if HR considers this to be an issue, the chances are that the rest of the business is under the same impression.
In fact, if you could run two reports for the same information – one by HR and one by finance – most executives will consider the finance report more trustworthy and accurate. This has significant implications for HR’s credibility and reputation.
With the continuing rise of ‘Big Data’ and the mounting pressure on HR departments to deliver high quality, accurate and meaningful business information, many companies have the same problem – poor HR information.
Even ASX listed organisations that you would expect to be totally on top of their game, could be dealing with disparate systems and inaccurate data. Even organisations that have an accurate and operating single HRIS, they are often older, on-premise systems that aren’t future proofed, e.g. no mobile access, limited configurability etc..
There are a number of steps which organisations can take to deal with poor HR data.
1. True Position Assessment
The first step is to understand what systems are being used to manage your information and in what capacity in each location of your business’s operations. A simple checklist can be created as a starting point containing a summary of information available. It might look something like this:
|Business Unit||Location||HR Systems||Accessibility||Information Available|
|Manufacturing||Indonesia||Outsourced payroll||Limited – 5 working day turnaround||Basic pay, working hours, gender, date of birth, date of hire|
|Corporate||Melbourne, Australia||Oracle HCM||24/7||Basic pay, incentives, superannuation, working hours, gender, date of birth, hire date, performance rating|
|Customer Service Centre||Philippines||Outsourced payroll||Limited – 2 working day turnaround||Basic pay, working hours, gender, date of birth, date of hire|
This basic table enables you to understand where you really are, and from there it is easier to make decisions about what to do next.
2. Plan and Prioritise
Once you understand your current reality, it is important to build a picture of your ideal state with no limitations, i.e. if you had all the budget and resources you could possibly need, what is your ideal data position?
In the real world, to have unlimited budget and resources is virtually unheard of. Therefore, the next task is to:
- Review the strategic business priorities
- Determine how the HR Strategy underlines and supports that
- Think about the largest areas of pain where the biggest return on investment can be achieved.
The simplest way of doing this is to get key business decision-makers together in a facilitated workshop. The participants typically include senior HR, IT, Finance and Operations leaders. The best business information is obtained from a variety of sources, not just the HRIS, gives a holistic view of the organisation and impacts on the broader operations, so having their input is critical to success.
The workshop is also a good opportunity to assess the reports, if any, that are currently being provided to the business. The key question to consider is whether any of the reports are actually being used to make business decisions. Discussing the relevance of the information provided and identifying the pertinent data will help tailor the reporting going forward. Then, based on the business strategy and anticipated future direction, you can determine what information and insights are likely to assist in decision-making at the top level as well as throughout the business and therefore, what systems/support you are likely to need.
At this point, it is unlikely that you will be able to determine how much solutions will cost, but you can work out when the ideal time would be to have them in place and how important they are to the key stakeholders within your business. The ideal state may be a fully integrated HRIS to manage your data, but the reality may well be that there are no plans to invest and only small step changes can be made in terms of system improvements.
3. Become a Salesperson
The value that can be derived from having real time integrated HR information is huge – this is maximised by having an organisation-wide, fully functioning HRIS with integrated Talent Management. The majority of businesses rely on people to deliver their product, revenue, insights and pretty much everything else that makes or saves money. However, making sure the key decision-makers in your organisation buy into the idea that information about your people can enable them to make better, more informed and data-driven decisions is a relatively new concept and not always easy.
If your plan involves purchasing and implementing an organisation-wide HRIS and/or integrated talent management solution, the costs are, most likely, not insignificant so being able to sell the concept internally is critical.
A business case for an HRIS should include how the system implementation would support the broader business strategy, an assessment of the opportunities which might arise from the implementation, a cost/benefit assessment and a clear demonstration of Return on Investment (ROI).
4. Source of Truth
It is critical to make sure all the data that is held across your various systems is accurate and up to date. Without this, any type of reporting becomes an exercise in futility. It is worth investing what time and resources you can afford into this task. It may be a cliché, but “garbage in” really does equal “garbage out”. Once you have completed this exercise, it needs to become part of your ongoing processes until you have a fully integrated HR/Finance/Reporting system and processes which have fully functioning workflows and faultless execution, which is a long way off in the case of most companies. HR’s credibility will benefit hugely from leading this process.
5. Figure out the best systems for you
If you are lucky enough to have an executive team that realise how valuable complete and accurate people data stored in a well-integrated HRIS can be and get the go-ahead to investigate, you will then be faced with many options. This is where having a clear plan comes into its own – clearly identified needs and priorities will enable you to whittle down vendors based on these criteria. There are a number of comparison websites available online but some of the critical criteria include:
- Do you want to have an on-premise or cloud-based system?
- What are the key components to include for your organisation and how would you prioritise them? E.g. Core HR, payroll, time management, recruitment, learning, performance management, remuneration and benefits etc.
- How do you want your employees to interface with the system(s)?
- What is your budget?
- What are your timeframes?
- How many countries/locations do you want to cover?
- How many employees do you currently have?
6. Making the best of a bad situation
If your organisation is not ready or willing to make the financial investment to implement an organisation-wide HRIS, there are a few things which can be done to make things easier and add value to the executive decision makers:
- Collect data from all your sources monthly and in a consistent format, e.g. a spreadsheet with set columns to collect specific information.
- Figure out the key metrics you want to report on and analyse more deeply, looking for insights and added value. Ensure you get the key stakeholders’ input when you are determining the metrics you are going to be providing.
- Determine the analytics calendar – not everything needs to be reported on a monthly or even quarterly basis. What information is needed? At what time? For whom?
- Identify someone in your business, preferably within your span of control, who has an interest in analytics. Ensure they understand what you are trying to achieve and the target audience. Allow them to run the relevant statistics and present them to you as a whole, including trend identification, analytics and insights. If necessary, invest in training in how to utilise analysis tools.
- Once you have the statistics or more basic information, real value is added through interpretation of the data and development of insights and recommendations – translate the main points into key business information to inform decisions.
7. Consider Outsourcing
If you do not have the internal capability or resources, consider outsourcing. Having an expert firm take the pain away by pulling all the disparate data together, developing fantastic dashboards with targeted, business relevant information and undertaking more complex predictive analytics can make you look great with relatively minimal investment – perhaps consider what you would pay for an analyst to do this work for you as well as all the other hours of time spent doing this work manually, and instead invest in paying someone outside the business to do it. This option may be more cost effective than implementing an HRIS until the business is ready to invest in the future!
Finally, remember that if you are in this situation, you are most definitely not alone. The vast majority of organisations in Australia are wrestling with HR data issues. As technology solutions become more and more accessible, managing information and providing relevant analytics and insights will become easier, enabling all types of organisations to maximise the value they can derive from their people data.
Contact Egan Associates on (02) 9225 3225 or email us at firstname.lastname@example.org to discuss how we can add value to your workforce and remuneration analysis with our cloud-based, integrated Workforce and Governance tool.