What is HR Software ?
Every business requires some kind of accounting system to manage expenses and determine profitability. As with HR software, businesses can generally benefit from automating accounting systems as opposed to using manual paper systems or spreadsheets. While most businesses kept accounting systems and HR systems separate in the past, many businesses are now beginning to realize that integrating these systems can sometimes be beneficial.
Need For Integration of Accounting and HR Software/ HRA Software
Following are the various issues related to the integration of accounting and HR software :
1) Difficult to Find Pre-Integrated Solutions :
One difficulty that companies may face is that it is currently rather tricky to find single software solutions that offer both HR management options and accounting capabilities. Even if companies offer both types of software, the software usually comes separately and may or may not have the capability to be integrated. This issue will most likely be resolved in the future, but it can currently pose a dilemma for companies that wish to manage these aspects of their business together.
2) Provides a Big Picture View :
If companies can overcome the obstacles to initial integration and either find a single software solution or effectively integrate two programs, it is much easier to get a big picture view of the health of the company. Managers can see how labour is effecting sales, how turnover is effecting the bottom line, how recruiting is effecting overhead expenses. Being able to compare accounting figures and human resources information can help with budgeting and decision-making in a profound way.
3) May Cause a Shift in Perspective :
Integrating financial systems and HR systems can cause a shift in perspective in some organisations. When human resources information is viewed side-by-side with financial data, it is easy to lose the human element and only see bow A impacts B as it relates to revenues. This can unfortunately have adverse effects on company culture if organisations aren't careful to retain the human perspective even while viewing figures.
4) Can Help to Show Trends :
When it is possible to view financial figures and human resources data together regularly, it is easier to spot trends and to see how changes affect figures. This can allow managers to see how changes in labour constraints affect revenues, but they can also bring it back and see how these changes have affected turnover and how turnover has impacted hiring costs. Not only is it possible to view a snapshot of company data, it is possible to track data and see how changes impact the whole business over time.
5) One Solution May Not Fit All :
While advocates of integrating human resources software and accounting software may say that moving forward with the integration is bound to help the company, this may not be true for every company. For some companies, the cost of obtaining the single or compatible solutions may outweigh the benefits of being able to view the data side by side, especially if the company is small. For other companies, however, integrating the data may make sense and provide a superior solution and basis for decision-making.
It is important for companies to cost out how much it would be to integrate HR and accounting systems and figure out the expected gains in order to make an informed decision.
Selection Criteria for Choosing an HR Software
Following are the key questions to ask and answer, in the process of selecting Human Resources information technology :
1) What is the degree of flexibility and scalability that the HR information technology software provides? HR professionals should determine if the software can import from multiple Excel spreadsheets, databases, and paper documents and the level with which it can interface with all kinds of systems and data. The software should accommodate any eligibility rules that the company and carriers have.
Will the HR information technology be able to grow and scale with the organisation? HR should assess the technology's ability to grow as the company hires new employees, offices, benefits-changes, and rules. HR should ask about the thresholds for each of these elements.
2) Is the HR information technology software able to integrate with other systems? Payroll and other functions often share much of the same information as benefits management. HR can obtain greater efficiencies when data and other employee information entered into one system can be shared with another system.
3) Who is responsible for implementing or building the solution? What level of training is involved? Some solutions require the client to be very involved with the initial implementation, which can be overwhelming for already busy HR administrators
HR should have a clear understanding of the level of training and technical expertise that will be required and the amount of time expected. Questioning solution providers on this topic can provide insight into subtle areas that might initially appear simple, yet involve significant technological expertise.
4) If training is involved, is there a charge? Costs of training should also be assessed - including time away and travel expenses for off-site travel. HR needs to become aware of all hard and soft costs involved in the HR information technology adoption.
5) Who will own the data? The answer to this question should be the Human Resources organisation. Companies should be able to transport their data to any Application Service Provider (ASP). If the data resides on a carrier's proprietary server, the company may sometimes be charged additional fees if it opts for carrier.
6) What types of maintenance and upkeep are required? When software is installed on a company's on-site workstations servers, regular updates to that technology are often required and may be cumbersome to plan for and manage. Updates to HR information technology are often made automatically with software available online through an Application Service Provider (ASP) or software.
7) What security measures are built into the HR information technology? If the software is available online, through an ASP model, the provider should offer daily backups, back-up servers, and added protective layers. Additional systems and procedures should be in place to safeguard information from being lost or accessed by unauthorized personnel.
HR, in consultation with other managers, should have exclusive authority to decide who will be allowed access to the HR information technology and to what degree.
8) Will employees be able to enroll in benefits plans and make changes in real-time to their personal data and plan choices? Employee access should be a given, considering the widespread, general access to computers. 70%+ of the population has Internet access at home. Employee self-service provides huge potential to save time and money. A good self-service system will guide employees smoothly through entering information about themselves and their dependents.
The system should clearly present the plans available and enable employees to make selections at their convenience, simplifying these actions throughout the process with wizards. Employees should also be able to add dependents and change information as necessary, 24 hours a day, seven days a week.
What is an Human Resources Information System (HRIS) ?
A human resource information system (HRIS) is an information system or managed service that provides a single, centralized view of the data that a human resource management (HRM) or human capital management (HCM) group requires for completing human resource (HR) processes. In order to realize the full potential of an HRIS, its business strategy must be aligned perfectly with its f strategy to achieve competitive advantage.
Pre-requisites for Human Resource Information System (HRIS)
The following conditions must prevail to allow the use of HRIS for both the employee and managerial empowerment :
1) Conducive Corporate Climate :
The corporate culture must be conducive to employee empowerment. If a HRIS is being introduced in large bureaucratic organisations, the mindset of senior management employees must undergo a change, hence this requires some degree of change towards downsizing, team work and procedural review of the HR processes.
2) Budget :
It is obvious that the budget must be approved by top management prior to commencement of an HRIS project. Although the overall cost will ultimately play a very large role in the selection of an HRIS the costing should be secondary to the goal of finding a system that meets the overall business needs.
3) Efficient and Effective Teams :
The human resource and technical teams must be effective and above all efficient to cater to the employee needs. HR employees must also view themselves as service providers and enablers and not as controllers.
4) Technological Platform :
The organisation will need to understand whether HRIS will be a standalone system, networked system or a web based system. The technology environment comprises of several key components that jointly delivers unsurpassed performance and a feature-rich user experience. Some of these include development environment, portability and response time.
Functions of HRA Software/HRIS
Following are the various functions of HRA software :
1) Manpower Planning Activities :
Human resource information system plays an important role in the process of manpower activities through following functions.
- Automating and devolving many routine HR tasks to line management which provides HR professionals with the time needed to direct their attention towards more business critical and strategic level tasks, such as leadership development and talent management.
- HRIS provides an opportunity for HR to play a more strategic role, through their ability to generate metrics which can be used to support strategic decision-making.
- HRIS support long range planning with information for labour force planning and supply and demand forecast, staffing with information on equal employment, separations and applicant qualifications. It supports development with information on training programs. salary forecasts, and pay budgets. It also supports labour or employee relations with the information on contract negotiations and employee assistance needs.
- Risk and security management is another crucial function which can be derived by HRIS by following private and highly sensitive individual data with multi-platform security aspects which are perhaps the most serious factors that need to be taken into consideration.
- Identifying unfilled positions accurately by making a regular analysis of the human resource needs of the company through matching the supply of human resource with the demand for it.
- Provides insights into organisational training needs by identifying deficiencies in employee's performance and then selecting the right persons to be trained at the right time after which the system evaluates the effectiveness of the training programs.
Apart from this, the performance related data and productivity information data embedded in the HRIS is used as evidence in employee grievance matters. careful documentation of employee performance, method of measuring the performance of employees and reporting system, which is critical to the organisation.
2) Helps in Decision-Making :
The integration of data with other systems has enabled HRIS to provide detailed information on mostly all HR systems. With improved access to metrics, faster information processing, and greater information accuracy, the fast decision-making and better HR planning is made possible for decision makers. HRIS system allows human resource analysis, which is the basis of HR planning and most business decisions-making. The organisations make many business decisions on the basis of the capabilities of their employees and many decisions to make their workforce happy and skillful. HRIS offers ability to quickly run reports and view dashboards, which allows the CEO and management of the company to take important decisions concerning employees and the areas that affect company's business as a whole.
Thus, the HRIS systems have helped the top management of companies to gain greater visibility into human capital and financial resources for better decision-making.
3) Collection and Monitoring :
HRIS allows candidates to apply for a certain position in the company, but also for HR department to collect and process the received applications. Here the using of computer systems and networks are very important, especially because of online accesses to the system. Online collection of application has become standard in developed countries. After collecting applications, the company accesses to the next level using the HRIS module. This includes support for the following activities - generating reports with statistics about labour market in the country, monitoring of interviews and the score assigned by the staff responsible for their evaluation, monitoring of job descriptions, keeping internal statistics on employees, auto-tracking and analysis of profiles of candidates, creating a list of e mails (for sending circulars), making online remarks, etc,
4) Record Keeping :
HRIS facilitates record keeping of all personal data of employees. It is very important for each company to have these data, and in most cases data must be standardized.
For example, if company needs information on whether an employee has a certificate for particular type of work and if the company has 7000 employee, only search of standardized records can be effective. This function usually includes data for regular and emergency contact with the employee, data on all wage history, data on absenteeism from work, training's and certificates, estimates the characteristics of employees, information on possible disciplinary action, injuries at work, and data that companies can define by itself, unless they are part of a standard software package. In addition to these data, it is possible to store scanned documents (education diplomas, birth certificates, judgments, etc.).
5) Payroll Function :
Through HRIS, pay process is automated through collection of data on employee time and attendance, calculation of various deductions and taxes, and generation of periodic pay cheques and employee tax reports. This function does not often forms the full part of the HRIS, because it is heavily integrated into the system for financial management of the company. It is difficult to find integrated set of HRIS with payroll.
6) Benefits Administration :
HRIS provides administration of employee's participation in various forms of benefits. All employees must be aware of their rights and obligations. The most important activities are included in pension plans, buying life insurance policies, but also in the distribution of shares of the company or division of profits. The key function is to monitor all benefit programs and to notice any potential deficiencies. The advantage of online access is very important in this function. The fastest and cheapest way to maintain the beneficiary database is ability of online access to the data by the employees.
7) Training :
Hals provides a system for organisations to administer and track employee training and development efforts. It can track the education level of employees their qualifications and/or skills. It allows storing and displaying various types of courses, books, lectures or materials that are suitable for web learning. Online learning and testing of employees is a remarkable raving of time and money, and provides a high flexibility.
8) Performance Management :
Performance management is very important for each company because continuous monitoring and evaluation are essential when company makes conclusions about their human resources. It is also important to realize whether the objectives are met and which segment should improve. The goal is not criticism but insight in potential updates and upgrades of the system. HRIS contains features for monitoring system performances, which provides valuable information for the management of the company.
9) Employee Self-Service :
HRIS uses web technology which allows employee, together with professionals in HR department to manage the employee's database. With the right permission they can access their data with read-only or change status. Depending on the exact solutions data access can be provided within Intranet (safety is increased) or through the Internet (in which case the company has greater availability of data).
Advantages of HRA Software/ HRIS
Advantages of HRA software are listed below :
1) Improving HR Productivity :
While the HRIS features benefit the organisation in many ways, one of the most important of all HRIS benefits relates to the ability of the software program to improve productivity of human resources employees. These systems are highly detailed, and they are designed to enhance and speed-up the efforts of HR employees in a number of ways.
For example, they can assist with the recruitment process by simplifying the efforts associated with collecting resumes, reviewing candidate information and more.
2) Reducing Errors and Maintaining Compliance :
Many HR tasks are highly regulated, and because of this, even a minor error on the part of a human resources employee could result in considerable legal issues and even financial loss for the company.
For example, when resumes are not reviewed in a fair and just manner during the hiring process, a lawsuit may ensue. An HRIS can provide guidance to avoid these types of issues before they escalate.
Furthermore, additional HRIS benefits relate to compliance issues. Some software programs are designed to review compliance with specific rules and regulations- this makes it easier to ensure that the company is in compliance with these laws & regulations, which can improve company's reputation as well as avoiding penalties.
3) Performing Analysis :
Performing analysis and reviewing metrics associated with various aspects of the organisation can assist with better decision-making and can help with spotting patterns.
For example, Human resource department is responsible for analyzing hiring costs and for calculating the turnover rate in different departments. The results of these calculations may be used to make important business decisions and to develop strategies to move the organisation forward along a successful path. HRIS analytical tools give HR employees the ability to perform many pertinent calculations with speed by collecting the data needed within a short period of time and then analyzing all of the data in a concise and effective manner. Some software programs are designed to create professional reports on metrics and analysis that can allow HR professionals to spot issues at a glance.
4) One-Stop Shopping :
One of the major advantages of an HRIS is that the information once entered for many HR-related employee tasks would-only need a single updation at one place when employee information changes.
5) Integration of Data :
Furthermore, different parts of the system can "talk to each other" allowing more meaningful reporting and analysis capabilities, including internal evaluations and audits and preparation of data for outsiders.
6) Accuracy :
Improved accuracy is likely assuming data, are entered and manipulated correctly.
7) Automated Reminders :
Systems can schedule events, such as performance appraisals and benefit deadlines, automatically notifying and nudging if actions have not been performed.
8) Hosting of Company-Related Documents :
The system can host such materials as employee handbooks, procedures, and safety guidelines. The materials are easily updated in one place.
Disadvantages of HRA Software/HRIS
Disadvantages of HRA software are listed below :
1) Security :
Security is one of the biggest worries. Systems must be designed to prevent unauthorized access to sensitive and confidential data and also the unintended publication of such information. This typically requires many "compartments" and many levels of authority for access, all of which have to be monitored and maintained.
2) Cost :
Cost is another important factor of HRIS. Especially for smaller companies, this can pose a problem. With any system, there are acquisition costs and maintenance costs. SaaS (Software as a Service) systems are somewhat easier to handle from a cost standpoint since they are cloud-based and do not require as much initial outlay.
3) Limited Functionality :
Simple HRIS obviously come with just a few basic functions. While this has its advantages, it can make it necessary to find workarounds for certain processes that are not supported by the system. Having some functions manual, some functions supported on the HRIS, and other functions processed using spreadsheets and different systems can cause confusion and errors for some companies.
4) Time to Adapt the HRIS :
The challenge which companies face is the time that employees and managers need to adapt themselves to the Human Resource Information System (HRIS). Although, companies train their employees and managers in certain area of human resource department for using the HRIS, but employees and managers need time to adapt to the new system. It is necessary that the employees and managers should perceive the benefits from the use of HRIS; otherwise it will not serve the company. Besides that, there are some employees who are not good in using computer, and therefore they will take a long time to adapt this new system even after training.
5) Training the Users to Use HRIS :
The first challenge of company to implement the Human Resource Information System (HRIS) is ensuring that employees can use the HRIS. If employees do not have any idea about HRIS, it would be difficult for the company to implement it. in helping the human resource department. This will decrease the efficiency of the company to get quick access to information and also, there would be a chance of information being stolen by the other company. So, HR department will have to provide training to employees in curtain areas to use the HRIS well.
Examples of HR Software
There are many software programs designed to help in HRIS process. The following are only a few of the companies currently providing HRIS software :
- Ascentis offers payroll and HRM programs for small-to mid-level organisations; software that tracks many traditional employee benefits and several non-traditional such as paid parking and club memberships.
- Apex Business Software offers HR programs to meet company objectives and manage many facets of the HR process, including employee leave and benefit tracking. They also offer instant access to employed attendance information that can be made available even to customers, thereby enforcing accountability.
- People Trak has a wide variety of HR software, including personnel, compensation, and safety, applicant and position management. They also have programs for COBRA and benefit administration, for both simple tasks and strategic planning of HRM.
- Manager Assistant offers software with many different modules developed to assist HR employees in each stage of HR analysis.
- Atlas Business Solutions creates programs that allow easy filing and retrieval of employee information, including vacation accruals and performance evaluations, in their software package called Staff files.
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