Automation of personnel management is necessary for all large companies with more than 1000 employees. It simplifies many processes: from payroll to evaluation of the results.
The work of employees is a powerful and significant potential of the company in terms of economic indicators, which must be used wisely. The performance of regular job duties and operational production tasks must be carried out systematically and accurately. Where HRM software is implemented, the head of the company and HR specialists cope with the flow of cases faster and more efficiently.
However, it is not enough just to calculate quantitative indicators, it is also necessary to take into account the quality of the work of employees. Modern HRM systems with extended functionality are designed to help in this. They are aimed mainly at identifying and attracting worthwhile specialists, creating conditions that will keep them in the company.
The integrated automated personnel management system has extended functionality. It controls a mass of production processes, calculations and analytics related to everything that characterizes the interaction of full-time employees and the company (from wages to career growth and skill development).
You can also find other designations for an automated personnel management system: HCM (Human Capital Management), WFM (WorkForce Management).
What Are the Main Tasks Solved by HRM Software?
- Streamlining of calculations and accounting of operations that are related to personnel management.
- Reducing losses arising from staff turnover.
The effect in the first case is obvious. Thanks to automation and the presence of a unified information base, all actions are carried out quickly, and most importantly, calculations, statistics and analytics are always carried out correctly.
With the evaluation of the results of the second task, not everything is simple, but they also bring their effect. Automation of personnel management processes allows the manager to build a personnel policy not at random, but based on an accurate and comprehensive analysis of the personal indicators of employees.
Thanks to information systems, management decisions become more efficient, staff movements, staff training, and the formation of motivational strategies are purposefully carried out. As a result, the company not only retains valuable personnel, but also creates conditions for promising employees for career growth and even more efficient performance.
HRM Systems Classification
It is customary to talk about three levels of HRM systems, into which they are conventionally divided depending on the degree of process automation.
Tier 1 systems include products that help payroll automatically. These are typical solutions for a very narrow circle of potential users. The functionality of such products is limited, and customization is not provided for in the future.
The second level includes systems for automating personnel records. These are solutions with more advanced functionality (can be supplemented), allowing you to streamline the personnel policy and conduct it competently.
The most advanced are HRM systems of the third level. With them, you can not only calculate salaries, bonuses and allowances, but also keep personnel records, and also develop personal training programs, collect characteristics of specialists, carry out certification and engage in promotion planning.
Typically, third-level programs are part of an integrated enterprise automation (ERP) system. However, they can also function independently.
There is another classification of personnel management automation systems – based on the composition of functions.
It is divided into five groups:
- Settlement systems. Designed for calculating wages, bonuses, deductions, travel expenses, etc.
- Accounting systems. They are used to create a staffing table, personnel reports, control over business trips, vacations, sick days, and conduct personal files. Accounting and settlement systems combine the functionality of the first and second groups.
- Systems with incomplete functionality. This group consists of software products that have not only accounting and settlement functions, but also contain an HR circuit (allow you to manage motivation, analyze the performance of employees, assess the professional suitability of employees and certification, plan staff changes) and are generally aimed at improving methods of personnel management.
- HRM systems which are fully functional. They are automation systems of the previous group, but with the function of preparing reports for higher authorities or for controlling organizations. Such systems can also maintain statistics.
- Modern automation systems in the field of personnel management include six functional blocks. They, in turn, are divided into three technological levels – operational, user, strategic. In most software products, the first and second levels are sufficiently developed, while the third is at the stage of technological development. And not always the leaders in the system of strategic personnel management are large-scale figures of the world market.
How to Start Automation of Personnel Management?
First of all, you need to decide on the key parameters of automation, and then proceed with the implementation of the system. The algorithm is this:
- We set the main tasks of the project (we designate the business processes that should be included in the automated HRM system).
- We develop requirements for a software product that is designed to automate the necessary business processes.
- We coordinate the first two points with full-time IT support specialists. They will help weed out options that are incompatible with software products that are already in use in the company. In general, close cooperation with IT specialists is an indispensable condition for the automation process at all stages: from implementation to operation of the HRM system by ordinary users. For a better understanding with the IT service, it is desirable for everyone who will use the software product to upgrade their knowledge in this area, at least to get acquainted with the description of the automated system itself. We select a software product that meets the technical requirements (the best option is through a tender among several applicants). Together with IT specialists, we evaluate the proposed solutions in terms of functionality, technical qualities and price.
- We make calculations on the costs of funds and labor resources, foreseeing the need to configure the system for the specific needs of the company. It is better in commercial offers to immediately separate the cost of the product itself (workplace, licensed package, etc.) and the cost of customization, improvements (they can cost much more than software).
- We choose HR automation software that will be compatible with the products used in the company.
How to Choose a Personnel Management Automation System?
It is difficult to make the right choice of an automated personnel management system without first having thoroughly studied the market and the functionality of different products, without trying them on for your enterprise, for specific tasks. Therefore, at the preparatory stage, the manager needs to clearly define the needs of the company, and only after that dive into the proposals from the developers of HRM software.
If HRM appears as part of ERP (Enterprise Resource Planning – enterprise resource management), then it can be integrated with other modules.
This gives additional convenience if the company has a common management base for all structural divisions. Business transactions are completed faster, data discrepancy is eliminated. Of course, the pleasure is not cheap – the integration and training of employees will require considerable costs. However, with an already implemented ERP system, it would be more expedient to develop HRM as an additional module, rather than buying a standalone product.
There is no difference between the processes of implementing an HR automation system as an ERP module and as a standalone product. True, using a specialized solution, you need to take care of the interaction with other work applications.
It is important to understand: high-quality software for an individual project requires not only large financial costs, but also a lot of time. Plus, the risks in matters of compatibility and interaction of the new system with third-party products that the organization already uses cannot be avoided. But on the other side of the scale is the functionality of the HRM system, which fully meets the needs of the enterprise, taking into account the nuances of a particular business.
As far as packaged solutions are concerned, with the perspective of serial distribution, developers make complex software scalable and compatible to the maximum with other products so that the widest range of users can be reached.
In addition, such automation systems for personnel management processes, as a rule, are distinguished by flexible module settings for the specifics of different business areas.As a result, the profitability of complex products is much higher than that of custom-made software.
Another significant detail: ready-made platforms have long been introduced and adapted in enterprises, so many shortcomings and roughness have been eliminated or taken into account in more modern versions. If flaws are found in personal software, it can take years to fix.
It’s great if the automation of personnel management functions is under the control of an IT project manager. He will be able to competently plan and build the entire process of work within the HRM system. However, not every company can afford to cooperate with such a specialist; this is the prerogative of only major players in the market.
How is the Effectiveness of an HRM System Evaluated?
The assessment, which is given theoretically, is based on financial indicators:
- payback periods;
- internal profitability;
- net present value;
- return on investment (ROI) ratio.
However, most often it is not easy to calculate these indicators: the implementation costs can still be estimated based on the budget, but the profit received as a result of the project implementation is essentially impossible to determine. So in fact, increasing manageability and productivity in an area that has become automated will be the main effect of the introduction of an HRM system.
The following specific achievements are possible:
- time and financial expenses for work with documentation and information are reduced;
- presentation of all data and documents becomes consolidated;
- business processes are carried out automatically and according to common standards;
- access to the necessary information is very fast;
- up-to-date data is promptly entered into the documents in case of changes in the regulatory framework;
- all information contained in the system is securely protected;
- a minimum amount of time is spent on training new specialists;
- you can exchange data with external information systems.
Rational and efficient use of human resources is the main result of automation in the field of personnel management in any enterprise. Medium and large enterprises interested in such results are unlikely to be able to do without the implementation of appropriate software solutions.
