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There are a variety of ways in which an HR department can choose to manage their data. These can range from simple paper forms up to global enterprise resource planning systems. Whilst in theory any system could function in any size of organisation in practice the efficiency (and cost) savings offered by software systems make them the only viable options in medium and large organisations. For small and micro business’s software systems still offer efficiency savings although in these cases the workload may be small enough to be managed organically amongst staff particularly where no specific HR role has been defined.
As organisations grow, adapt and evolve the suitability of a solution will change. A key driver for change is efficiency, access to the information the organisation requires must be efficient. Establishing the organisations liability for remaining holiday entitlements should not become a week long project polling managers for their opinion of which employee’s have leave remaining, or an expedition to an archive room to root through paper files to double check carry over.
The existence of an HR function within an organisation can be the driving form behind the initial need for systematic record management. Human Resources cannot be managed without access to data related to the staff members they are responsible for.
Within HR paper based systems require a number of forms and processes associated with them. Forms can be divided into sections for the employee, supervisor and HR administrator to complete in sequence; each checking and confirming the same information. The progress of a form can be verified internally by which boxes have been completed and where the form is physically located. The physical location of forms is often overlooked as an indication of their status; it is not just who has signed them off that reveal progress through the system. If a form is signed off an placed into an out tray it will not actually become eligible to proceed in the process until it is moved from the out tray to the next processing station.
In general as humans, we fail to realise how complex these systems actually are as we are able to intuitively handle the practical details such as the physical location of a form indicating its actual status. This can also mean that the true inefficiency of these systems is invisible to us, where an analyst studies such a system they could easily catalogue ten times as many steps in a process as any user realises there are.
In a micro, small and even some medium businesses a paper based HR system can be used and can work. Whilst they may lack efficiency, this may not have been realised or there is a cultural trust of paper over digital. In some industries paper based systems may be preferable as they are robust. Using physical artefacts to record data removes risks associated with digital record keeping (although retains its own set of risks).
To administer a paper based system a number of forms and tally sheets may be required. A particular paper form is needed for each interaction, such as changing address, requesting a holiday, applying for a job and so on. Physical space and security is also a requirement; it is not simple to make a backup copy of a paper based system and issues related to business resilience must be carefully considered (an emergency listing of employee contact details is kept off site for example). In the case of fire or other disaster, a business must be prepared to lose the majority of this information. For small and micro businesses, this may not pose much of an issue as it is likely workers and supervisors will be able to provide approximate leave balances from memory and other data can be swiftly collected. In organisations with large numbers of staff this type risk is not manageable or acceptable so digital alternative provide the only option.
Paper based systems could be considered the most successful of all systems simply because they have been behind human civilisations for centuries. They are tried and tested with artefacts from these systems are coveted by historians around the world.
In the modern era these systems still exist and their legacy underpins much of modern life. Paper based systems should not be considered limited to simply the media of paper. It is entirely possible to replicate the entire workings of a system that was designed to operate using paper to become a computer system without changing that system in any way. In practice this is typically only seen in specific elements of a system. An example is a tax return form where the paper submission form is dutifully replicated into a digital form (now with some helpful functionality added). In the case of the tax return though the rest of the system will have had its historic paper based roots re-imagined for the digital age.
When paper based systems are translated to computerised systems a one to one mapping of paper forms should typically be avoid. It is the essence of the system that needs to be replicated, not its artefacts. In a paper based absence request system a paper system may have a check box on a form to confirm that the approver has confirmed that there is enough leave remaining. In a computer based equivalent this check would be made before the request was even submitted; faithfully recreation of paper based systems can neutralise the potential benefits of a digital system.
Spreadsheets and document based systems are a step up in complexity and resilience from a paper based system. These can include a level of checks and balances, which are automate. These types of systems increase the accuracy of data and apply rules in a blanket fashion. Like a tax return form a worker will most likely still interact with these type of system using a paper based form. The difference is that the form is only used to capture the necessary data and does not in itself manage the progress through the process.
As a digital system, spreadsheets allow complex calculation to be performed quickly with a high degree of accuracy. This improves the quality of the data and in turn starts to allow for a greater understanding of it through analysis. An holiday management spreadsheet could be created with a page for each employee and a summary page giving totals. This type of design is significantly more powerful than a paper based equivalent and less time consuming to administer.
Spreadsheets can inherit some limitations of paper-based systems. They can be difficult to share and may require a level of knowledge to accurately understand what calculations can be performed. It may also be the case that multiple spreadsheets exist across an organisation, line managers having create independent solutions for a common problem. This can mean that some of the problems associated with a paper-based system still exist; assembling accurate data on a subject from multiple independent systems may not be straightforward. Where a line manager is absent himself or herself it may mean that the data becomes unavailable, as it is stored within their personal files.
Whilst spreadsheets can create valuable solutions, it is important to bear in mind that they introduce significant risks. Incorrect calculations in spreadsheets have crashed spacecraft into planets and embarrassed university professors. Spreadsheets allow trivial errors to propagate unseen through data, giving a misleading impression of what is actually happening. Also in multiple page spreadsheets a data entry error can be tucked away never to be found. For this reason, spreadsheets must be treated with the upmost caution and their development considered carefully. In practice, it is rare that a any rigorous testing would be applied especially where the task is considered as simple as adding up some numbers. The flexible nature of spreadsheet cells is at the heart of why spreadsheets are such useful tools and why they are such risky tools.
Accompanying spreadsheets that track absence information may be document storage systems (where fit notes are kept) and word files detailing performance reviews or tracking an on boarding process (which could also be managed in a spreadsheet). The net effect of this is that whilst there is some systematic management of data it is not cohesive or easily understood. Whilst differing people may take day-to-day responsibility for their part of this system no one has direct ownership or control of it. In turn establishing that the system is compliant with an organisations policies becomes virtually impossible, anyone may be storing any type of information in anyway. The reality of the above risk may not be as serious as it sounds since a person has taken responsibility for this data they are likely to guard it to the best of their ability – but this is still unlikely to be a satisfactory arrangement.
In some organisations, a technical person or team may be able to consolidate an array of spreadsheets into a single cohesive system. Microsoft Access is a commonly available database design tool which also allows the creation of simple user interface elements. Whilst a simplistic explanation the main difference between a database table and a spreadsheet is that the cells of a database table are not flexible; you cannot enter a formula or change the type of data that can be entered. There are many other important differentiating factors between databases and spreadsheets, which would require a lengthy and separate article. The basic effect of moving to a database is that the quality of the data is improved by the design of database, improved quality includes improved accuracy and also the ability to ask more complex questions of the data.
By being able to design a user interface it also becomes possible to create rules to restrict what data can be entered into the system. This prevents someone from erroneously attempting to book a holiday far in the future or far in the past. The overall effect is to create a significantly more reliable and robust system. Systems that are designed and built can be of significant benefit to an organisation. As custom and purpose built software they can encompass bespoke behaviour that would not be included in an off the shelf software solution.
Whilst these systems can be venerable servants to an organisation, they can also create issues. If the developer or team that created the system moves on from the organisation the knowledge required to maintain or change the system may be lost with them. This is a significant risk if this software system is performing a core business function. As only the in house developer understand the structure, design and purpose of the system external experts can require a significant amount of time to learn about the system before they can safely make any alterations to it. This can be an unwelcome expense and may have to be repeated many times over a number of years.
On the surface administering a payroll requires very similar data items to administering HR. Names, addresses, dates of birth, employment dates etc. are both common. At a high level, it can appear possible to have a payroll system handle much of the data management aspects of an HR system, within this limited scope this will work. However, the scope of HR extends beyond this limitation.
HR data includes that of applicants who may never be progressed to employment; it can also include records of those that have left employment. So the ability of a payroll system to manage even names and addresses may be more limited than required. In turn this could mean that a number of supporting spreadsheets or other systems are also necessary where a payroll system is used to manage the basic details of only current staff members.
The functionality of payroll software may also be too limited to cater to the needs of an HR function. Tracking the details of a one to one meeting or planning annual reviews is beyond the range of tasks such systems were created to cater for. Whilst a payroll system will perform its functions reliably and accurately they may not be able to accommodate the whole range of tasks required.
A hybrid HR system can occur as a consequence of multiple other systems. The payroll system is used to keep the master records of current employees basic information. A recruitment system handles applicants; a holiday booking system handles leaves and so on. The collective effect of all these systems is that an HR system exists within the organisation. The nature of that HR system is quite unwieldy though.
An administrator will need to have detailed knowledge of how the system divides responsibility for each area. A role will exist to maintain and transfer the necessary information between the systems at the right time. This type of arrangement can work but does require significant amount of work to govern; each system may not store data in the same (as a trivial example one system may allow people to have longer surnames than another system). An advantage is that in a way this system is modular, the recruitment or payroll component can be swapped for that of a different provider. A disadvantage is that users need to be trained to use and understand a multitude of software systems.
Dedicated HR software systems are designed to manage all the data management needs of an HR department. These systems are designed specifically for this purpose. Hr systems can be modular in nature, allowing the adoption of only the workflows used within an organisation.
An off the shelf solution and a bespoke solution developed in house (in Access for example) may provide differing approaches to managing an HR task. Off the shelf solutions, provide generic functionality that will cater to most needs. Individual organisations may evolve their own variation of workflows that have carried over from spreadsheet or paper based system. An HR system should allow for the customisation of workflows to accommodate changes.
Where an organisation moves from a paper or spreadsheet based system it will need to work with a software vendor to migrate their data. Alternatively their historic can be archive and a new set created. A software vendor will usually want to help a client retain their historic data where possible. This allows the client to quickly gain benefit from the system and reduces the amount of work that needs to be undertaken to adopt the product.
Where a software consultant works with a client to migrate a client from a paper, spreadsheet or paper based system they will need to assess the quality of the available data and provide advice on its suitability for the new system. In some cases process can identify significant errors in the way calculations have been made and some effort can be required to reconcile differences in the data.
HR software systems at a basic level will allow for the management of applicant, employee and out of service individuals. They will keep detailed records of jobs held and hours worked in addition to managing absence, reviews, benefits, actions and more. Reporting features will provide an analysis of the data held within the system giving an insight into trends and allowing understanding. Through reports the system will be able to recreate statements concerning leave entitlements or on any other data held.
An important feature of dedicated HR systems is their ability to handle bulk changes to records. This can be important when administering training where all users may need to be assign a new course or where holiday entitlements are changed. The ability to import and export data adds to this ability as it allows data to be transferred between systems.
In the modern era an HR software system will typically include a self service module. This allows staff and their supervisors to manage the day to day administration of leave management. As the system is integrated managers are required to work within the rules that the HR administrator sets. This can allow for the prevention of common issues such as the allowing an individual too much or too little leave. The system will still allow an administrator control to override a limit if appropriate; the important thing is that this type of action will be recorded by the system providing accountability.
As a central repository for all employee information HR systems provide a high level of efficiency and peace of mind. This means that members of an HR team can spend more time talking through issues with colleagues and less time assembling data to answer management queries. In addition to this they provide a location to store the details of face to face meetings and to set reminders for future catch ups.
There are various type of HR software solution on the market. There are many factors that drive an organisations choices and a first step to selecting a system is to draw up a software procurement strategy. This will set out the business requirements that need to be answered, how candidates will be found and selected, what trial or meeting will be necessary and what the expectation and timescale is for implementing the system. This plan can be used as part of acceptance testing before the system is formally accepted.
Enterprise resource planning (ERP) systems go beyond the functionality of an HR system and aim to administer the entire business. These are ambitious and costly systems to implement and projects can take many years to complete. This type of system can operate across multiple sites and countries as the organisations central repository of knowledge.
Whilst comprehensive in nature these systems can lack flexibility. This is not due to their architecture, it is usual for changes to be technically possible, but because the cost of making a change is prohibitive. Adding a field to and employees record to record which locker number they use can become a project in itself with multiple meetings and approvals required. This may sound excessive but as the system is critical to the business and the change may impact other users it is prudent to be cautious and follow a strict procedure.
In some cases, companies running an ERP system will also purchase additional software to manage other activities. This can be because it is more cost effective to do this that to make the change, it can also be because it is bureaucratically easier to handle at a local level than seek approval from all branches of the enterprise where it is only a local problem. This can extend to buying independent HR software solutions to implement a custom appraisal process or provide benefit change forms. Whilst the ERP system retains its status in managing the master data of the organisation other systems can be at work dealing with the local details.
It is rare that an organisation will have an entire HR management solution developed as bespoke software from scratch. It would be more typical that an off the shelf solution is customised to suite those needs. A program to develop a bespoke system would likely run for years and have a support faze of at least a decade involving significant upfront costs.
Historically it would have been quite common for each organisation to have its own software developed. Before computers were ubiquitous, it was not unheard of for a company to rent time on its main frame computer and software for other companies to run their payroll (helping pay for the investment in the expensive machine and software). This software and the machines it ran on would have been intended to last for a significant period, which is how such large investments could be justified. With the fast pace of technological change this long sighted vision is now a more risky prospect.
With the advent of comparatively low cost computers and software these type of large investments were no longer necessary. Personnel Manager (an HR software product developed by Vizual) played a large part in reshaping the HR software market by providing an easily accessible and low cost option. The product could be installed on to almost any machine and provided a range of standard HR functions that could accommodate the needs of the majority of companies. By being able to sell a large number of copies of the product the cost of each copy to a business could be kept low. Also by providing fixed workflows, the need for lengthy and costly consultations was removed.
In modern times, bespoke software (or third party software) is often found where multiple systems need to be linked together.