The Aberdeen Group recently surveyed more than 300 organizations regarding their HR systems. The results revealed interesting insight about the way companies are investing in HR to manage costs, ensure compliance, and allow HR personnel to become more strategic to the organization.
Let’s review the best practices and actionable recommendations that were revealed as a result of the study.
A Growing Challenge
From making sure that payroll arrives on time, to enrolling employees in benefit plans and providing benefit information, HR departments are increasingly being challenged to take a more strategic role in containing the costs of these core HR activities. The top internal hurdle in accomplishing that objective (58% of survey respondents) was that there was too much time spent on manual HR transactions.
Two other top challenges cited in the survey were disparate systems requiring redundant data entry and updates and resulting data integrity for reporting purposes (33% and 35% respectively). According to the Aberdeen Group, it became clear that organizations are challenged primarily by workforce management issues. This is not surprising since cost control is achieved through better labor management.
Best in Class Characteristics
Survey results show that the companies enjoying best-in-class HR performance shared several common characteristics:
- Standardized HR processes & policies across the entire company. For example, overtime policy in one location must apply to all other locations.
- Embraced technology & automated workflows to reduce errors and redundancy. Ultimate objective is to reduce administrative burden on HR personnel while enabling employees to become more self-sufficient.
- Involved the business leaders in defining challenges in existing systems and establishing the proper metrics for ongoing measurement.
Actionable recommendations to achieve top HR performance and cost cutting include:
- Implement self-service portals for both employees and managers – this can play the single biggest role in lightening the administrative burden on HR. It also directly reduces the cost of paper and related supplies by providing electronic copies of paystubs and W-2 forms.
- Secure HR data – implement proper systems for employee privacy and data security to avoid the huge compliance risk associated with laws like EPA and HIPPA.
- Clearly define an HR escalation process – ensure that employees understand who to contact to resolve an issue and how long it takes for resolution. This helps them become more engaged with their jobs and satisfied with the HR services they receive.
- Standardize HR processes – ensuring that the same policies apply to ALL workers across the entire company increases fairness and reduces risk of litigation. It also helps the company to defend decisions about hiring, firing, compensation and promotions. Most best-in-class companies offer an employee communications portal or intranet to help facilitate HR process standardization.
If you would like assistance with your HR software or practices, we can help!