HRMS is designed to be used by the entire organization
There is good news and bad news when it comes to HR technology. The bad news is the pace of “sexy” new technology has slowed. The good news is current systems are extremely robust and have never been more accessible.
HRIS versus HRMS
There are many faces of technology as it relates to HR. The first is captured in the distinction between a human resource information system (HRIS) and a human resource management system (HRMS).
HR and payroll use an HRIS. Typically, the system requires a high level of expertise to use and is not accessible by management or employees. It may be something the employer’s payroll provider offers HR as an add-on or a system from an integrated HR/payroll provider.
An HRMS, on the other hand, is essentially an HRIS on steroids. It offers the same functionality, with one big difference: It’s designed to be used by the entire organization, not just HR, from front-line workers up to executive and operational management.
The primary tool HRMS is used for is known as self-service and the ways employee self-service (ESS) and manager self-service (MSS) are offered vary by the software.
Just as an HRIS and an HRMS can (and should) have both HR and payroll, it’s becoming more common to find software that also includes time-management functionality. Time is central to payroll, of course, but is used by operations and HR too.
Both HRIS and HRMS products keep up with trends in the marketplace. If HR moves toward talent management, the software providers offer talent management. If HR expresses more interest in performance management, the software suppliers increase performance management functionality.
Areas for improvement
Of course, new challenges continue to appear. Many systems fail to adequately provide for the management of expatriates, tracking and developing mentoring relationships, complex compensation (especially multiple currencies), succession management and the correlation between collective agreement wording and administration. And each vendor offers its own spin on the functional offering, so check it out carefully.
Properly structured, an HRMS is a powerful foundation for managing all human resources. It feeds operating systems, provides HR cost data for direct and indirect labour costing, supports the general ledger and provides the basis for timely reports for all levels, including executive information dashboards.
But, like any tool, it needs to be used correctly. Implementation and management of any new system requires an organization to assess its processes, restructuring to maximize the value of the system. Old processes and policies won’t cut it in making a new system work effectively.
Working in the clouds: ASPs and SaaS
Cloud computing is another face of HR technology. So what is the cloud?
First, let’s consider alternate service providers (ASPs). ASPs provide software, usually over the Internet with one single instance (version) per client — it’s all yours. Software as a service (SaaS) is always delivered over the Internet and varies in one other important way — all customers use the same software. It’s not customized beyond the options offered to all. Both reduce implementation and maintenance costs, although SaaS devotees claim it is more cost-efficient.
The trend to SaaS has grown over the last few years with offerings in most functional areas. For HR/payroll software, Workday, an HR company from Dave Duffield, founder of PeopleSoft, has been a trailblazer but other vendors are merrily giving chase.
Issues to consider
There are a few other HR technology issues to consider, not the least of which is the privacy and security of personal information.
Privacy policies: Do you have a privacy policy in place? Is it one integrated organization-wide policy (best) or only for HR? Do you train staff and audit compliance of electronic data as well as hard copy?
Sending data: Are you sending HR administrative data electronically by email? Do your supervisors? Check with your IT department — is your email (internal and external) encrypted? Is it backed up regularly? Is it kept as long as you would keep the same data in hard copy? What about texting and tweets?
Social networking: Social media tools can be useful for business, especially for HR. Do you have policies about their use?
The challenge for HR is to maximize the use of HR data. In the final analysis, HR has responsibility for managing HR data on behalf of the organization, regardless of the tools at hand, and for ensuring managers and employees can input data and recover information as required.
Ian Turnbull is managing partner at Laird & Greer HR Management Consultants in Toronto, a firm specializing in HR, payroll and time system selection and management. He is also co-author of HRMS: A Practical Approach (published by Carswell, a Thomson Reuters business). He can be reached at (416) 410-3877, (877) 653-0422 or [email protected].
