When should you upgrade your HCM system?

Building a company is like building a boat. Before you begin, you have to know what seas you’ll be sailing in, how big your crew is going to be, and what your boat will need to be capable of. Once it’s built, you’ll need the right sailors to hoist the sails, take the helm and tie all the proper knots.

In this extended nautical metaphor, your HCM is many things: from the rope used for the rigging to the wood used for the plank; from the grub served in the kitchens to the iron bars of the brig; it’s everything that holds the structure of your boat together.

During your time spent sailing the seven seas, your vessel will need maintenance. Barnacles must be scraped from the hull. Fraying ropes must be replaced. The poop deck must be scrubbed. Failure to do this will result in your ship falling apart the next time a thunderstorm rolls around.

But, further than this, there might come a day when you notice that the ship is too small to fit your whole crew comfortably. The constant scuffing of boots on the deck wears the wood down far quicker than it used to. Some of the crew are now vegetarian, and your chef only knows how to cook albatross.

It’s at times like these where daily maintenance is no longer enough – it’s time to invest in upgrading the boat itself. Add some more crew quarters, replace the deck with harder wood, make the chef walk the plank.

It’s much the same in HR. Sometimes you get so caught up in the routine of daily tasks that you don’t notice they’ve become more difficult or take much longer than they used to. You don’t see that the nature of the business has changed – whether that’s through growth, a shift in goals or a change in the market – and your previously perfect processes are no longer fit for purpose.

There are a few questions to ask to determine if this is the case. Some are to do with your employees, and some are to do with you and your department:

• Are your employees satisfied? Are they engaged?
• How much time do you and your team spend on administrative tasks?
• Has your workload increased significantly in the last year?
• How frequently are mistakes/errors occurring throughout your processes?

If everyone’s happy and engaged, your HR team has a manageable workload that isn’t being eaten up by admin, and everything runs smooth as honey, you’ve got nothing to worry about! But, if you caught yourself answering any of those questions with “Weeeell…”, then it may be a sign that a change is due.

Let’s start with employee satisfaction and engagement. Obviously, there are lots of factors that contribute to these, and most have little to do with your HCM. However, unlike individual managers, clients and projects, it is one of the few things that every single employee regularly interacts with. Its effect on satisfaction and engagement may be comparatively small, but it’s frequent and cumulative. Over time, it makes a huge difference.

It’s a common misconception among employees (and, unfortunately, many HR teams), that HCM systems must be clunky, tedious and frustrating to use. They accept them as a necessary evil, but an evil all the same. So, they avoid them as much as possible. Rather than submerge themselves in a labyrinth of indecipherable PDFs, they might get all their knowledge about their benefits, for example, from whatever their line manager knows about them. Unfortunately, said manager may have done the same thing when they started, and so on.

The issue here, predictably, is that your business might be spending exorbitant amounts on benefits that a large chunk of your workforce is completely oblivious to. Worse still, once they discover those benefits, they might take the view that the business was actively hiding them, giving them an unfavourable view of the company – which, of course, is entirely the opposite of what they’re there for.

Ensuring your HCM is well-tuned and up to date allows it to work with your employees, propping them up and guiding them through your various HR processes. Whether they’re onboarding, requesting PTO or finding out about their benefits, the way they interact with your HCM should feel easy, helpful and pleasant, actively improving their satisfaction and engagement every time they use it. If you’re rolling your eyes right now thinking, “There’s no way anyone can enjoy using an HCM system,” you are exactly who this article is for. When was the last time you had a look at what’s out there?

As a business scales, the demand on its HR team scales with it. Administrative tasks that took half an hour when there were 8 people in the company now take multiple days when there are 200. The systems that would make these tasks quicker and easier would simply have been overkill for a smaller organisation, but it’s worth asking if you’ve reached that tipping point now. Even experienced HR veterans will be susceptible to the old “it’s how we’ve always done it,” used as a reason to retain familiar processes even if they’re outdated and inefficient. Of course, it can be difficult to justify an expense like this to senior management. It’s important to argue that it’s not a fancy new toy or a luxurious crutch for your department, but a mode of streamlining and ultimately insuring the business as a whole.

Saving all that time and tedium by automating previously manual processes not only reduces your team’s workload (and stress), it also removes a lot of opportunity for human error. When someone is repeating the same task over and over again, it’s easy to make the occasional mistake. Most individual errors may not add up to much but, depending on the size of your business, one day a simple clerical mistake around someone’s pay, benefits or personal information may cost the business thousands in insurance or legal fees. It’s a classic case of spending money now to save money later.

Unsure about what an upgrade to your HCM could mean in a tangible way? Chiefly, it should improve how many of your systems talk to each other and how well do they do it. Ask yourself: how difficult is it to implement a change in the employee life cycle? If, for example, someone gets promoted, how many individual systems, platforms and processes are required to update:

• Their position in the org chart
• Their salary increase
• Their PTO allowance
• Their bonus + additional benefits
• Their training/compliance requirements
• A congratulatory announcement to the wider team

In an optimised process, once the promotion is approved, all the relevant systems should interact with each other automatically, updating everything in one fell swoop. While it’ll still need a pair of human eyes to look over it and check everything is correct, it once again cuts down significantly on time, effort and opportunity for error. In effect, it consolidates six individual tasks into one.

It’s all well and good us saying this, of course, but actually implementing an upgrade to your HCM – especially if it’s long overdue – is rarely as simple as installing a new bit of software and hitting ‘run’. You may have a teetering tech stack that, over the years, has become a dilapidated Jenga tower held up primarily by PVA glue and hope. Changing or removing any part of it might risk sending everything crashing to the ground. We shouldn’t need to tell you that, if this is the case, just leaving it and hoping it won’t eventually collapse is not the best idea. Sometimes, you’ve got to knock the tower down so you can build a better one from the ground up. Your HCM needs to be able to support where your business will be in a few years, not just where it is right now. Don’t wait until the boat springs a leak to fortify it against the elements.

Next April, HR Technologies UK will return to ExCeL London. There, a library of HCM software providers will be ready and raring to advise you on how to update, upgrade or entirely overhaul your processes, leaving you far better prepared for the future. If you haven’t already, register your interest in attending today!