HRIS: Are They Overrated?

Karim Kurji, Principal, Technology Solutions, Buck Consultants

Karim Kurji, Principal, Technology Solutions, Buck Consultants

Many companies, big and small, have jumped on the bandwagon  to implement a Human Resource Information System (HRIS) for  their workforce. They hope it will solve all of their HR woes by leveraging technology to take care of the grunt work of  everyday HR tasks like benefits management and total reward statements. Sure, automating an HR department’s tedious work and saving employees hours in the office is great, but where’s the real ROI for the enterprise? What’s the point of going through an implementation and dollars spent if the technology can’t do what it should be doing—giving you real insights through data  to make strategic business decisions.

"Automating an HR department’s tedious work and saving employees hours in the office is great, but where’s the real ROI for  the enterprise?"

With the ever-increasing pressure to maximise profits and grow the business, companies need to get smart about how they spend their money. Before making that spend, it would be prudent  to understand the kinds of insights anorganization wants from  the HRIS’s data. For example if a company wants to give each employee a 2 percent raise on base pay. That’s not just a 2  percent increase on the books, but will likely be more like 10 to 15 percent depending on your benefit structures,  jurisdictions, etc.

Can the typical HRIS pull this off and how accurate are the numbers? In our time of instant access to information, speed and  accuracy are a given. The world we live in today is bursting at the seams with data and information. Companies spend obscene  amounts of money on HRIS implementations, but with all this capability at their fingertips how quickly can they really get the results they need? Organizations need to get smart about tapping into sources available and making the data work for  them. Most companies also have a hodgepodge of suppliers providing HR services that are of a high quality, but are not  technologically unified. In order to bring these together one should consider implementing an aggregator system that  denormalizes the data from various providers into one cohesive, easy to navigate, engaging portal that employees and  administrators can use.

On the employee-facing screens that show employees their various benefit  offerings, one can build in a single sign-on to the underlying vendors allowing for transactional capability. Most modern aggregators allow for updates to basic demographic  data like contact information, organisational hierarchy etc. In essence, this type of solution can be the system of record  for basic employee and organisational structures. The aggregator can also serve as a communication medium across multiple  devices because many have built-in content management capabilities and in fact most of them already have responsive web front ends. The detailed data is held with the respective vendor and a copy of consolidated data is held in the aggregator more  for analytical purposes.

Expanding on the aggregator, how many human resource departments create a total rewards statement each year and release it to employees with great fanfare? The number is quite significant, unfortunately soon after you release a statement all is  forgotten, the data is stale, spread over numerous excel files, and not  really in any state to be analysed quickly,easily,  and accurately. How unsatisfying must that be! Months of effort to compile, collate, check, and publish a statement that is  all but forgotten soon  after it’s released. To add insult to injury the data is dated and not very useful.  

Companies need a flexible aggregator coupled with total reward system. Once the total reward statement is published, survey technology can be used to gain insights into a workforces’ psyche. How do employees feel about their benefits? Would  they be good advocates for you company? Data and modern tools can analyse comments, tag them, pick out trends, and finally  visualise these trends to make it useable. Using feedback from  the crowd, elements of gamification, and audience   participation will help manage reward spend and improve employee performance. By understanding reward value from an employee’s perspective, organizations can make better decisions on their reward spend.

A properly designed and implemented total rewards system  coupled with an aggregator can possibly replace an HRIS platform.  With this new hybrid you would be able to model future costs, quickly and accurately, because the underlying cost structures  can be programmed into the hybrid platform. Most companies create a total reward statement on an annual basis. If an  organization is going to spend the time and effort pulling all this reward information together annually, then they should leverage the massive investments in their vendors’ systems to provide more driving data. Formulae within the system  use these values to calculate the various benefit values. These stored  values in turn help the enterprise and its employees  make better decisions about themselves and the business.

Companies need to shift their perception of an HRIS and what it does for both employees and the enterprise. It’s time to move towards sticky employee engagement while utilizing data to gain business insights to make informed spend decisions. HR needs  to leverage their vendor’s expertise, make their data speak to them, and get smart about their investments. Do we need  HRIS’s or we have the time to implement hybrids  that help us understand what our data is saying to us and utilize that  message to then positively impact the bottom-line.