Self Service HR Automation gives your organization much more than surprisingly quick Return On Investment (ROI)

Traditionally automation of HR and Payroll are seen by organizations as a necessarily evil, an investment that has to be done from a statutory compliance perspective, or to ensure that payroll occurs on time. This was true, primarily because HR & Payroll applications were used only by HR and Payroll personnel as a back office operation. This situation changes drastically when HR Automation is made self service. Employees directly accessing HR self service systems gives organizations oodles of benefits and with it surprisingly quick ROI. A back of the envelope calculation here shows ROI in two months!

Of all the benefits the most important one is time saved by employees. Detailed below are many functions that are present in good self service HR products like ours (KServeHRMS) which employees can access without having to meet the HR function, saving them considerable time

• Leave request, cancellation, modification
• View Payslips
• Update address and personal details
• View bulletins
• Make claims
• Request for infrastructure or other support
• Update performance appraisals
• Make a complaint
• Submit a HR request (any other HR form)
• Make declarations on Income Tax
• Check your tax liabilities to optimize tax

 It is not just the time for making the request, but also the time taken to meet supervisors, wait for appointments, and go back and forth to verify balances before the approval is obtained. Now, for each of the above, consider also of the time saved by the supervisor in approving, rejecting or clarifying these requests. In addition, include the time saved by HR, Admin and Payroll personnel is automatically getting reports for all these automated processes.

Let us make the following assumptions to calculate ROI for an Indian context.

               

• These ‘click of a mouse function’ saves  a conservative 5 minutes of time for every employee in a day which is about 1% of an employees time (it will be much more for employees on the move)
• Let us assume the cost of every employee to the company (salaries plus overheads) is on average Rs. 50,000/-
• The savings per employee therefore is around 500 Rs per month (1%) or Rs 6000 per year.
• For 500 employees the savings is 2.5 lakhs per month or 30 lakhs per year

If this company spends 500,000/- on employee self service software for its 500 employees, the ROI will be obtained in 2 months after the system is operational. In advanced countries where salaries are higher, ROI is even better, but this is offset by higher software costs. The time for ROI can still be the same in any country.

Consider also the intangible benefits to the company due to employee satisfaction and brand building.

• Transparency in obtaining standard services
• Not having to stand in a queue to meet supervisors for approvals
• Immediate access to information like payslips, leave balances, IT dues enabling better decision making

The next argument is in terms of risk of success. The risk of success can easily be mitigated by verifying the past track record of the provider,  and if required choosing a SaaS model where the investment can be paid installments. There should be no reason for any organization with more than 200 employees not to use self service HR systems, especially if your employees are highly paid.

It is good to see many organizations realizing this and investing in a system.

 

At Kallos Solutions and KServeHRMS (www.KServeHRMS.com) it is our honor, and pleasure to have made these benefits accrue to many organizations so far.

Employee Life Cycle Management: The Center piece of a good HRMS/HRIS

Do you recall the days when every employee had a physical file? A quick glance at that file would give you a rich source of information about when the employee joined, when he or she was confirmed, promotions, transfers, increments, commendation letters, termination letters and much more. The only problem was that if you wanted to know how many promotions were given in a year, you would have to go through all employee files to get that information. If the files where maintained in another location, if would mean asking someone there for search it for you. It is great that HRMS software available now can make life simpler, and allow HR to manage more employees easily.

You would expect that any HR and Payroll system would therefore include an Employee Life Cycle recording and reporting feature in their product. Yet there are numerous products without this feature. In the rush to ensure that an employee database exists and payroll can be processed, the availability of an online recording system of life cycle events as and when they occur is missed out. And when that is missed out, the wheels of the HRMS software goes missing. Soon the system degenerates to inaccurate data, delayed information to payroll and other complications. Just how important this piece is can be judged by how many other modules are impacted because of the presence of a life cycle management module. Whenever an Employee Life Cycle event occur, the following occurs too.

• The employee database becomes uptodate when a life cycle event occurs. Any confirmation, promotion, transfer, or termination automatically updates the employee database.
• Most life cycle events causes a change in remuneration and updates payroll automatically.
• Any time a life cycle event takes place, an equivalent letter needs to be printed out, formally conveying to the employee that the event has occurred and the date from which the event becomes effective.
• The impact on remuneration has an immediate impact on benefits like PF and ESI applicable to the employee, and the statutory reporting related to these benefits
• The impact of remuneration also has an impact on income tax calculations and deductions
• Leave policies may become different as an employee moves location, becomes confirmed, or changes grade
• A movement of location, office, office or department has an impact on related HR activities like performance appraisals and training
• A retrospective life cycle event can also occur (e.g. a promotion with retrospective effect), which in turn affects all of the above, also with retrospective effect, and calculation of arrears
• The resulting values of most HR reports change as and when a life cycle event happens

Clearly, life cycle management is the heart of any HR system. Rethink the capability of your HRMS/ HRIS system if you don’t have this capability.

At KServeHRMS Employee Life cycle is a key module in the system. All the above features and much more exists.

For more information visit www.KServeHRMS.com

Can your HRMS/ HRIS pass this pressure test?

Organizations are realizing that winning the war for talent, is the key to business success, and winning that war for talent requires Automated HR Systems. However, it is not enough to pick a well known product, but rather subject your HRMS provider with a ‘pressure test’ that is relevant for your organization and for Indian conditions. Given below are some pressure test features and capabilities that you can ask for.

• Can you handle an extreme situation where an employee receives a promotion, an increment, and a transfer with retrospective effect a few months back, and also pay the arrears for these changes this month, and make sure that while doing so all the PF, ESI, Income Tax, Professional Tax and Labour Welfare Fund related calculations are calculated correctly?
  
• Can the product be implemented in a modular manner, and yet work in an integrated fashion across all the HR areas like Employee Life Cycle Management, Payroll, Leave and Attendance, Income Tax, Performance Appraisals, Recruitment, Training, Employee Self Services, HR Administration, Travel etc.
  
• If you have many companies and locations and in every location there are many new joinees, separations, transfers, promotions and loss of pay due to leave, is it possible for all these locations to update/upload these transactions at the respective locations itself online, and process payroll & leave balances accurately – either at a central location or in a decentralized manner?
  
• Can employees themselves perform self service transactions like leave requests and approvals, infrastructure support, view bulletin boards, make complaints, record claims, make IT declarations, make projections of their tax liability based on declarations, past and expected future income for the financial year?
  
• In case there is a process that is unique and critical to your organization (e.g. recruitment using agents) will the vendor be willing to adapt the product to accommodate this change within reasonable costs and timeframes?
  
• Can you handle variable pay by uploading data from spreadsheets that are used to calculate those values?
  
• Has the product been used by at least 20 customers, and are these referenceable?
  
• Do you have a structured implementation methodology, with templates for quick loading of past data?
  
• Does the product have productivity tools for configuring new pay elements, report building, view building, alert definition, mail triggers, code definitions that you can define yourself?
  
• Are the consultants who visit you knowledgeable on HR and payroll specific processes relevant from India?
  
• If some processes are outsourced, can you give access to the external party over the internet, yet ensure that security is maintained and the outsourced party can do only what they are supposed to do?

Questions like these separate the wheat from the chaff, and go a long way to ensure that you have a chosen a product that can become the backbone of your HR services internally. Choose a good set of pressure test questions, and leverage them well during the evaluation.

KServeHRMS.com will of course comply with all of the above and many more such pressure test cases. We have invested over 30 person years of effort since 2003 to get the product to where it is today, and we will continue to invest so that we stay among the best HRMS products in the country.

This whitepaper will also be useful if you want to know more about how to plan to implement Integrated HRMS systems.

A guide to decisions in automating HR & Payroll functions

A white paper I wrote, leveraging my 25 years of experience in Enterprise Applications (including HR Automation)

Synopsis

HR automation can range from simple spreadsheet based solutions to complex enterprise wide solutions that automate every single process of the HR function. The automation can also extend to employees and even sourcing partners using self service portals. This paper looks at the various levels of sophistication that organizations have typically automated within this wide spectrum, and articulates the benefits that occur when the organizations take leaps through these various levels of sophistication. Organizations can leverage this paper to identify their current level of automation and determine if the benefits associated with a level of sophistication warrants the investment return for the chosen investment leap.

Click here to download white paper on 'A guide to decisions in automating HR & Payroll Operations.