3 Big Benefits of Human Capital Management Systems
– Mike Anderson, Founder & CEO
Cloud Human Capital Management (HCM) has emerged in the last few years as an important tool for businesses to more effectively manage their people. To date, attention has usually been placed on WHAT HCM does — payroll, time and attendance, and HR. But by fixating solely on what HCM does, employers and their software vendors often miss capturing the full value of what HCM can bring to a business. Getting full value out of a professional grade HCM system requires more than software. It requires a partner with the business and system savvy to translate the system’s functionality into something you can use to achieve the outcomes you are looking for.
Here are the 3 big benefits to keep in mind when you evaluate your current or prospective use of a modern HCM system:
HCM Benefit #1: Labor Productivity — yours and theirs.
Let’s start with you. Whether you are in finance, HR or operations, you undoubtedly have to spend time on routine, transactional items. And let’s be honest, these items can suck away a lot of your productivity. They have little upside for you, and only downside if they go wrong. Whether it’s getting everyone enrolled in their benefit plan and updating payroll benefit deductions, or fielding calls from employees who have lost their pay stub, or tallying up and allocating labor cost across jobs or departments, or filling out paperwork to on-board new employees, you are spending time on items that have to get done, but represent an endless list of To Dos. And being stuck in an endless list of To Dos keeps you from being productive and from demonstrating the greater strategic value of your role. HCM systems, first and foremost, make HR and Payroll managers more productive by freeing them from the trap of everyday transactions and requests from employees and paperwork by automating routine tasks and making information available to the people who need it.
HCM, however, drives productivity far beyond the people who are in charge of payroll and HR. HCM can drive productivity throughout the entire organization. Time and labor management, an often overlooked and undervalued piece of HCM, can be an incredibly powerful tool for measuring, tracking and reporting not just how much time your employees are working (or not, in the cases of absence tracking) but also where and when your employees are spending their time (jobs, department or activities) and even capturing how much they are producing and at what rates it should be billed. This is true for whatever type of workforce you might have — hourly, salaried, exempt, non-exempt, professional, blue-collar, on-location or distributed. The intelligent and thoughtful application of a robust time and labor system to your operations provides invaluable insight into your business and ensures that your labor costs, often the largest expense item in the budget, are going where it matters most.
HCM Benefit #2: Regulatory Compliance
It is no secret that employers are faced with an increasingly complex and varied regulatory environment. Employers of all sizes are forced to deal with a confusing array of rules, including federal, state and local payroll tax requirements, state wage and hour rules, the federal Fair Labor and Standards Act, the Family Medical Leave Act, EEOC and affirmative action laws, the Affordable Care Act, state and local paid time off rules, minimum wage laws and even fair scheduling rules that are now starting to pop up in many jurisdictions. These rules cannot be adequately and consistently managed by any one person. And while an HCM system can’t automatically do it for you, they can be designed and configured to be an invaluable tool to help you stay in compliance. This is what software systems, with their rule-based, algorithmic, cold-hearted logic are good at!
HCM systems won’t manage all this out of the box for you, but they can be configured to manage the rules that apply to you, do it consistently and fairly across your entire workforce, and take a huge computational burden, and worry, off your back.
HCM Benefit #3: Employee Engagement
An engaged workforce is consistently touted as a key element to business success. HCM systems with their mobile, responsive, easy-to-use access are a foundational tool for fostering engagement and present a modern, technologically-forward face of your business to prospective and current employees.
HCM systems provide employees access to their own information, encouraging them to use the system to answer their own questions when they need information (How much time off do I have? Where is my last pay stub? How can I swap my shift with someone? What are my benefit options?). By providing employees secure access to their own information on any device the employee chooses (mobile, desktop, purpose-built kiosks), the employer is providing greater transparency and convenience to employees, thereby cultivating greater trust.
Employers can make employee handbooks available, present benefit options, push company-wide announcements, welcome new employees in a professional manner, conduct performance evaluations with employee input, and allow employees to request and schedule time-off, all from the same system. Our experience is that employees respond very positively and enthusiastically to greater access to their information, supervisors feel more empowered, and organizations as a whole become more cohesive with the “glue” of a robust, easy-to-use HCM system.
Cloud Human Capital Management systems have immense capabilities and the power to drive exceptional value. Organizations that have the patience, the discipline and the right partner to help them can deploy HCM smartly and realize its durable benefits of productivity, compliance and engagement.