Show me the results: the ‘what’ of a successful HR system
THIS IS the final article of a three-part series on how human-resources departments should go about getting new systems in place successfully. The first two articles focused on the “why” and the “who”. In this article, we will be discussing the results achieved by a new HR system – the “what”.
Results enable organisations to assess the execution of their HR system. It sounds simple, but surprisingly it’s one of the most common pitfalls that organisations face. From my |experience, HR departments tend to suffer more than most other departments in this regard by failing to |quantify the achievements of its initiatives.
It is therefore imperative that when embarking on a new HR system, the project team establishes and agrees what the results should be. If these goals are achieved, that is undeniable proof that the new system is beneficial and is delivering the value that was promised.
It’s a sure-fire way of establishing credibility. However, it’s a double-edged sword, because if we don’t deliver we cannot hide. So be it. HR should be a risk taker and put its neck on the line.
Results can be demonstrated simply by measuring expected benefits. Benefits from a new HR system comprise two components: financial and non-financial.
Financial benefits of the HR system are savings in cost and time. Examples of cost savings are efficiencies in staffing, administration and information technology.
The financial benefit of time savings is achieved if the new HR system can reduce the cycles of various work processes such as payroll processing, benefit claim processing, selection of new hires, and leave processing.
Cost and time savings are generally straightforward and easy to compute. Combining cost and time savings will give you the total financial benefits.
From my experience, this figure will be about 60-75 per cent of your investment in the HR system.
For some organisations, this level is not a strong enough business case in justifying an investment for a new HR system. In that case, you could include “opportunity cost” and add it to your financial benefits, for example the amount of sales lost due to unfilled positions in the organisation. By including this opportunity cost, your expected financial benefits from the HR system will outweigh the cost of investment.
Equally important are the non-financial benefits of the new HR system. While I do believe that everything can be quantified, even matters of the heart such as “love”, in some things HR should report results as qualitative benefits. Examples of non-financial benefits are enhancing the organisation’s employer brand, becoming an employer of choice, increasing the talent pipeline and improving the employee experience.
Finally, be conservative when putting your figures forward to management.
And there you have it, three critical pieces that will guide you to a successful implementation of your HR system.
Suvit Chansrichawla is next-generation HR consultant under the brand Serendipity & Co, a partner of the Curve Group in Thailand.
