here is seldom a problem collecting or getting information these days. Indeed the problem is figuring out what to do with it all — how to apply that information to the overall strategy?
Strategic information is one of those business catch phrases that usually mean different things to different people, so it’s important to define it clearly. According to my handy dictionary, strategic is “of or serving the ends of strategy” and strategy is “a plan of action or policy in business or politics, etc.” So strategic information is information that lets or helps one carry out a strategic plan of action. Clear and simple.
For HR practitioners two questions arise: “What strategic information is collected in an human resources information system?” and “How is it or how can it be used?”
There is no doubt that strategic information varies by organization and changes within organizations over time. It’s a function of internal and external environments (competition, legislation, finances and other economic factors) and the focus of management itself. So, it’s necessary to make some assumptions about issues that generally are taken to be strategic in nature and thus, about which information should be and usually is collected, analyzed and acted upon in the decision-making process.
Getting the reports needed to satisfy strategic information requirements should not be a problem with today’s HR systems. Many of the outputs will already be included with the base system. Changes to these standards, whether format related or in terms of adding fields that are on the database, are done with a report writer that is provided by a system vendor. In some cases, “new” data fields will have to be added to the database, and this generally will necessitate a fairly simple system modification.
Health and safety
Apart from all of the legal requirements associated with this field, it makes good business and ethical sense to monitor health incidents, injuries and claims. HR systems should track these as well as causes, corrective actions taken and followups with employees.
The HRIS should provide analysis of the types of injuries — for example back problems, repetitive strains, falls, twisted ankles and wrists, and so on — and allow for comparisons by job, groups of employees, employee job training, equipment involved and shift overtime. This allows HR to track results of corrective actions.
The objective, of course, is to identify causal factors so that programs and policies can be developed and instituted to reduce the number of health and safety-related problems. The HRIS should also track and report on associated health and safety costs including absenteeism, workers compensation payments and various awards granted to employees.
Many businesses are in industries, such as auto parts manufacturing, that require either ISO or QS certification. A key component to achieving certification and satisfying regular audits is a structured employee training program. Organizations in other sectors realize that employee training is vital to become “best of breed” and to attract and keep scarce employees. In addition, some specific, ongoing training is mandated by federal and provincial legislation.
An HRIS should be able to track each employee’s training history as well as the assignment of future courses. Data should include:
•the courses themselves;
•whether the training is internal or external;
•grades obtained (if relevant);
•skills acquired from the courses.
The skills acquired should update an employee “skills inventory” and should be related to a defined set of job skills for gap analysis purposes. This last feature is part of a succession planning program in that it addresses training required to move between positions.
All costs associated with employee training should be tracked for budget control activities. These costs include the actual out-of-pocket expenses related to courses (seminar fees, trainer fees, travel and accommodation), plus the wages of employees while on training programs.
The HRIS should report on dollars spent as well as future costs not yet incurred.
According to Statistics Canada, absenteeism is growing in almost all economic sectors, and the costs associated with this, in terms of lost productivity and temporary replacement staff, are extremely high. Absenteeism data collected in an HRIS includes reasons, dates and, most importantly, trends.
Almost everyone takes time off because of the flu, a family emergency or a legal requirement such as jury duty. Although often disruptive, these situations are a “normal” for any organization. They are tracked to ensure that there is no abuse of a sick-day entitlement. If the system data identifies abuse, home-call followups and notes from doctors can be employed to address concerns.
However, of greater significance, are the routine abusers — those who always seem to take a sick day following every long weekend, or are regularly absent or late on Monday mornings. The HRIS should track both time and frequency by absenteeism “incident” and provide trend analysis by various criteria, for instance by shift, department, job and so on.
Many organizations institute absenteeism reduction programs similar to those in the health and safety area. The HRIS should provide both a “where-are-we-now?” analysis and ongoing reporting to measure the success of the program. Again, the reporting yardsticks are both days and dollars by various groups of employees and time frames.
In addition to general demographic information, the HRIS database contains data about costs (compensation, benefits, training), policies (entitlements) and liabilities (overtime banks, statutory holidays, outstanding vacation days). All of these data, and others like various employee allowances, can be considered strategic when used for either forecasting or “what-if analysis” purposes.
The process is relatively simple and involves identifying the data needed and moving it to a spreadsheet, an ideal tool to perform multiple iterations using varying assumptions. For example, the cost of introducing a new benefit at various levels of organization participation or the buyout over several time frames of outstanding sick days to be replaced, possibly by a day off per quarter as a reward for perfect attendance.
What-if analysis satisfies some of the information needs that are involved in labour negotiations, facility closures, changes in benefits programs or carriers or changes in mandated employee withholdings that are a function of compensation. All of these are strategic in nature since their change can lead to modifications in pricing policies, employee levels and even the location of facilities.
Over the last several years, this newspaper and other HR trade journals have all addressed the issue of the human resources area becoming less an ancillary staff function and more of a strategic component of an organization. There is no question that contemporary HRIS products offer HR practitioners the tools to make this happen.
This article has highlighted a few areas in which HR can add significantly to an organization’s strategic planning and monitoring capability. A key point is that strategic information has, for the most part, a financial focus.
To participate fully in the strategic planning process, HR practitioners must be comfortable in reporting on the factors that affect the HR area in terms of dollars as well as the usual HR units of measure (hours, days, etc.).
In addition, HR must be familiar with the standard financial reports since these will be used by management to evaluate strategic plans for HR and the entire organization.
Gerson Safran provides marketing and sales support to HR Systems Strategies Inc., the developers of INFO:HR HRMS. He can be reached at (519) 672-5984 or email@example.com.