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Building a business case for better HR systems

Wai-Bin Lai, UK Country Director - Sympa

HR leaders might feel that each new statistic released on the state of HR presents a loud and clear argument for introducing a new HR system. For example, a recent UK government report revealed that 43% of respondents said they were close to burnout. HR understands the problem, of course, but to make sure the business has its human capital running at maximum speed, HR directors have got to go the extra mile and present a bullet-proof case for change.

While justifying expenditure in the current climate can seem like a Herculean task, the most successful HR leaders will be those demonstrating tangible benefits across the company, touching upon on the pain points of department leaders and extending the business case beyond the confines of the HR department.

No pain, no gain
While it’s tempting to talk about how a new HR solution will save 6 minutes per recruitment, or increase payroll admin efficiency by 20%, the fact of the matter is that this argument won’t get results. Instead of talking about how HR’s life will be made easier, HR leaders need to switch tack and think about supporting the rest of the company’s business functions.

Each department within a company, and the executive responsible for it, has multiple pain points, and a good HR leader will initiatively understand this and proactively try to assist in the best way they can. With this in mind, it’s important not to dwell too much on collecting data.

In the first instance, they need to steer away from making an Excel sheet with fancy graphs and presenting a standard ROI.  A better approach is to build a business case that the rest of the company understands and trusts. This is achieved by involving them in the process, talking to them about what can be improved and building the business case from their point of view.

Winning over the CFO
Of all the stakeholders within an organisation, the CFO is unquestionably one of the most important. After all, they authorise the budget for new systems across the company, so before introducing the idea of a new HR system, its crucial to ensure that the CFO understands how it will remove the pain in their department first of all. For example, an HR solution that delivers a markedly improved salary review process is immediately more appealing, as it directly supports the finance department.

Setting up and preparing a salary review round is rarely a simple task. Business units and teams require separate budgets and files, a process that in itself can take to days. With the proper tools, this process can take less than an hour. In tandem with this, without a centralised system, the files also get scattered to all four corners of an organisation and are hard to control. As a result, there is seldom an audit log or a clear overview of the progress. Robust performance reviews are also extremely valuable for the CFO and CEO, as they empirically state who – and what – is delivering a positive return for the company, and where adjustments need to be made.

But CFOs have even bigger concerns. Given the existing skills shortage among finance professionals, which Mark Hoban, chair of the UK Financial Services Skills Commission (FSSC) termed an ‘existential skills crisis’ no less, CFOs need to maintain a laser sharp focus on keeping their own team engaged. Modern HR systems share this focus on engagement and wellbeing, which helps to prevent burnout and support happy and productive teams, no matter how demanding the role.

Stand up for security
For the CIO, CISO or IT Manager, HR Systems, of any shape or form, represent a potential threat to the security of the company. To use their language, every digital system increases the attack surface of the company. And the threat to company data is real, as evidenced by the recent attack on WH Smith, in which employee data was stolen and is now presumably available in the back allies of the Dark Web.

A modern HR system should comply with all GDPR requirements and prevent organisations having personal data scattered across multiple systems and locations. Privacy and security should not be secondary considerations, they’re a foundation on which to build your HR operations.

Older on premises HR systems were designed for a different age and security measures often extend no further than password protection. Perhaps an even more pertinent argument to make though, is that these systems are expensive to maintain. Warranty contracts on systems built 15 years ago have long since expired. Likewise, the languages used in the code base have vanished or evolved beyond all recognition.

Combined, this means that even the slightest change request becomes a ‘project’ involving a team of business analysts charged with deciphering arcane code. The probability of getting accurate change requests delivered, often even for basic reporting requirements, is low, and the cost is high. And these systems are unlikely to play with the other systems within the company. Modern, robust APIs available in today’s HR systems integrate seamlessness with other enterprise applications, delivering a joined-up infrastructure that becomes greater than the sum of its parts.

Is churn and burn really a problem?
According to CIPD, there is no set point at which staff turnover has a negative impact – it all depends on the cost to find a replacement, the complexity of the job and training required, and the ability of the business to manage the associated costs. For most companies, this element can affect Sales and Marketing, Customer Service, Warehouse and Delivery operations. Each of these elements has its own considerations and unique recruitment conditions. But whether the company is planning to live with a high staff turnover or whether it sees it as a problem, having a solution that can measure it, and provide key analytics to support onboarding times and associated training costs, is important.

Once again, the argument extends beyond the confines of the HR department and into the realms of departmental heads. Excel calculations performed from HR silo are unlikely to support a business case without examining the data from elsewhere in the company.

Moving beyond benefits to outcomes
While its clear to those who work in the HR sphere that the right HR solution brings an enormous array of benefits. It ensures all processes and data are centralised forming a solid foundation for all HR operations. But these benefits may not be so readily apparent to other stakeholders. It’s only by engaging the rest of the company and considering the solution from their perspective that a business case is likely to receive approval, and HR, the heroes behind the scenes, can once again begin improving business conditions for all stakeholders.

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