4 Key Questions to Ask Before Selecting the Right HR Software
By Arijit Banerjee
By 2022, the HR software market is expected to cross the USD 10 billion threshold. What is driving this staggering growth? Some principal drivers include benefits stemming from HR technology adoption such as increased security and efficiency, and reduced costs and risks. At the same time, emerging technologies such as mobile, cloud and analytics are transforming the nature of HR software. HR applications are transitioning from traditional back-end administrative solutions to integrated talent management solutions - supported by applicant tracking, and learning and performance management systems.
Amidst this disruption, how can organisations select the right HR software to maximize ROI? The selection process is a challenge not only because of the multiplicity of solutions available in the market, but also because the technologies underpinning them keep changing rapidly. Mapping your organisation’s HR processes, identifying its key challenges, and integrating the findings into your search strategy, can make the selection process not only easier but also more effective.
Answering these four important questions, can help you invest in a system that is stable, secure, and future-ready.
#1. Is the software flexible and scalable?
While it is important to ensure that the HR system has all the critical features, an equally important consideration is the flexibility of the system to scale with the growth of your business. The system must scale dynamically to account for regulatory changes, advances in technology, and other developments, without the need for extensive customisation. Ensuring high degree of third-party integrations and leveraging cloud-based technologies is essential to driving flexibility and scalability of HR software. Yet, only about 40% of global companies today use cloud HR solutions.
#2. Does the software integrate smoothly with existing HR systems?
Before investing in an HR system, a critical question to ask is, does it integrate with your existing HR systems? According to a 2017-18 HR Systems Survey, implementing an integration strategy could impact business outcomes by 20%. Yet, only 17% of organisations have a strategy for integrating HR applications, with 47% handling them on a case-by-case basis. Integrated HR systems are critical to driving compliance, enhancing process efficiencies, and creating better user experiences with more seamless interfaces across disparate HR technologies.
#3. How will you train HR staff on the new software?
After investing considerable amount of effort in choosing, customising and implementing HR software, many organisations believe that the hardest part is over. However, without proper training, even the best HR software solutions may be doomed for failure. The training process should identify the tasks each employee will be able to complete at the end of the training and integrate methods to measure the effectiveness of training. It is also essential to ensure that the right tools are used to implement the training and the content is adapted for your target audience.
Impax Laboratories, a technology-driven pharmaceutical company in the US, wanted to ensure that its internal resources were comfortable with their newly installed HRMS software to derive full value from it. With the help of a training partner, Impax facilitated timely learning and knowledge transfer using project team orientation materials and exercises, suggested readings, and guidance on navigating the rich information available on the vendor’s site. In addition, the partner arranged structured and guided knowledge transfer sessions. Thanks to the learning and knowledge transfer, six months after implementation, Impax achieved 100% usage by all employees and managers for the HR software and its processes.
#4. Who will own the data?
With increasing scrutiny of data security and privacy, it is more important than ever to get the right assurances from your software provider. The recent data breach at Page Up, a multi-national HR software provider highlights the importance of handling sensitive employee data. Your HR software provider should use a data centre that is ISO27001 accredited. It is also important to understand the data centre’s backup and recovery procedures as well as their disaster recovery strategy. If the data flows over the public internet, the HR system should support secured sockets layer (SSL) for data encryption. In addition, the password policy of the system should match your organisation’s internal policy. Role-based access restrictions can help control internal threats to data security while improving ease of use, employee confidence, and data integrity.
The right HR software increases your organisation’s competitiveness
The growing need for workforce mobility in developing countries such as China and India is translating into rapid adoption of HR technology in the Asia pacific region. In 2017, businesses in the Asia-pacific led the rest of the world in the adoption of talent management solutions. It’s clear that regardless the industry or the size of your company, the right HR software can help you increase productivity and efficiency, while providing your employees with the tools to increase organisational competitiveness.