Operating efficiently: Implementing HR information systems in SMEs
Practical insights from small and medium-sized enterprises on how HR information systems can be used to improve organisational efficiency and access to people data
Practical insights from small and medium-sized enterprises on how HR information systems can be used to improve organisational efficiency and access to people data
Before adopting their new system, employee data was typically stored on multiple spreadsheets or on paper. Many routine processes that could be automated were done manually, like sending resumes to hiring managers and keeping track of to-do lists for onboarding individual employees. There was limited or no employee self-service function.
As a result, the people professionals in those SMEs spent a lot of time dealing with routine administrative activities and had little time to contribute to their organisation’s strategy. Scaling up recruitment activities during organisational growth spurts was difficult and stressful. Information was sometimes lost among emails. Getting accurate data and making sense of it was challenging and time-consuming. Some also raised concerns about data security and complying with data privacy regulations in different countries.
Addressing many of these operational problems in SMEs could be done by adopting an HRIS, which could be set up in a few months by one full-time employee. Once in place, it would become an essential tool that enables people professionals to work more efficiently. It would also improve the employee experience by streamlining information flow across the organisation and provide valuable analytics to help shape people strategies.
In addition to the case studies we reviewed, the CIPD also took a closer look at the experiences of four people professionals in European SMEs who implemented cloud-based HR information systems in 2019–20. Previously, none of their organisations had a centralised HRIS. At the time of writing (May 2021), these organisations employed between 150 and 300 people:
Persuading your leadership to invest in an HRIS is not always easy. Breen, in particular, had to fight her corner. Her organisation wasn’t going through a growth spurt like Thomas’s. It didn’t have multiple systems like Kistemaker’s organisation either, so the cost-saving from consolidation was not obvious.
To tip the odds in her favour, Breen persuaded one of the managing directors to support her proposal, explaining the benefits of having a HRIS as well as the pitfalls of not having one. For example, how access levels could be customised so that colleagues can only see personal data relevant to their work, and how she would be able to pull reports more quickly for the finance team.
‘As a consequence of my conversations with them, [the managing directors] put in place a technology group to look at digital platforms for other aspects of the business. Once that got off the ground, we met three or four times and each person was tasked with a different platform. We presented our research and the different systems that we were looking at. They went off and deliberated and came back and said, “Right, this is how we are spending our budget.” Thankfully, the HR information system was included in that,’ Breen said.
Implementing the HR information system took between five weeks and six months at the four organisations, depending on the HR solution being implemented and the amount of time spent customising and testing before going live. This was the period after signing the contract until the first day when the system became the main source of people data. All of the organisations had access to the vendor’s client support during the project.
The difference was partly because of the amount of time spent customising and testing before going live. Thomas’s manager configured five modules in five weeks, dedicating one or two days a week to the project. She met weekly with the vendor’s client support but didn’t have many questions because the configuration guide was easy to follow.
Setting up took around two months for Lindholm and Kistemaker. When Lindholm joined her organisation, it had already started configuring the system. But she had to reconfigure it to make it work with the different rules in each country, such as for vacation carry-over.
Breen took almost six months to get up and running. She spent the first three months working closely with her IT colleague and the vendor who configured the system. In the last three months, some of the time was spent testing and refining the system.
Kistemaker explained, ‘You don’t have to launch everything at once. You can decide to launch bits and pieces at a time. That’s the nice thing about it.’ Candidates started engaging with his organisation’s HRIS through the recruitment module before self-service became available to employees. Lindholm also agreed with Kistemaker on not launching everything at once. After going live, she continued to refine access levels so that she can customise settings for specific countries or employee groups without affecting the whole system.
While training employees to use an HRIS properly is important, choosing one that is intuitive and has useful features significantly increases adoption. All four people professionals said employees found their system easy to use. Breen, for instance, intentionally chose one with a good mobile app, so that remote employees who don’t have company laptops can use their mobile phones to apply for holidays and record time spent on construction projects. She even made sure there was a single sign-in, so employees don’t have to memorise another password to access the system.
The HRIS did save a significant amount of administrative time where it was tightly aligned with the organisation’s policies and processes. For example, it enabled recruitment and onboarding to be more integrated and streamlined at Kistemaker’s organisation. ‘It’s easy to loop other employees into the processes… Because it’s user-friendly, line managers can just step in and roll with it,’ Kistemaker commented. New hires save time too because they don’t need to re-enter personal details that are already collected at application stage. But where it wasn’t tightly aligned, for example to the French system of recording time off, as in Thomas’s case, it can cause more of a headache.
All four people professionals said that their HRIS made data much more accessible to the right people and strategically supported their organisations with timely people analytics. Kistemaker said, ‘When you speak to employees, you tend to speak to the loudest ones. That is not necessarily representative of the sentiments of the wider employee population… [Having a HRIS] means that we can actually see how many people we are losing a year, why we are losing them and what their performance was like.’
For Lindholm and Breen, it also means more time for business partnering. Instead of chasing for appraisal documents, Breen could focus more on supporting the performance management conversations. Similarly, Lindholm has more time to run bespoke workshops for different employee groups in response to country manager requests.
See our partner Personio’s Change Management Guidelines for more information supporting employees and managers through change.
Our insight series continues next with a focus on using technology to improve hiring and onboarding. For the full list of articles, visit our main Digital transformation: practical insights from people professionals page.
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Hayfa joined us in 2020. Hayfa has degrees in computer science and human resources from University of York and University of Warwick respectively.
She started her career in the private sector working in IT and then HR and has been writing for the HR community since 2012. Previously she worked for another membership organisation (UCEA) where she expanded the range of pay and workforce benchmarking data available to the higher education HR community.
She is interested in how the people profession can contribute to good work through technology and has written several publications on our behalf, as well as judging our people management awards, speaking at conferences and exhibitions and providing commentary to the media on the subjects of people and technology.
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