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1、If you understand that an information system can provide the foundation for technology that has a very visible, concrete financial return, then you really can see an ROI from an HRMS. By Marcia Barkley This is a period of remarkable change for the human resources function. Almost in the blink of an
2、eye, HR is being forced to shed its nearly 100-year charter as the caretaker of employees, and to become a strategic, value-enhancing business partner to the firm. With this dramatic change come some significant differences in the way HR plans and executes its initiatives, with a special emphasis on
3、 leveraging technology. Intuitively, HR has generally understood the value of technology, particularly in large organizations where volumes of information had to be built and maintained, if only for the narrow but critical purpose of getting paychecks, in the right amounts, to the right people at th
4、e right time. The terror of Y2K was a blessing in disguise, as it provided the perfect inducement for CEOs and CFOs to approve large investments in powerful new HR information systems. HR pros did not always know how they would actually use all the functionality of those powerful new systems, and ev
5、en the CEOs and CFOs could not demand a detailed justification. The need to prove an acceptable ROI went right out the window in the face of the possibility of massive, catastrophic data loss. Thats unfortunate, for many of the very same senior HR managers who have made such admirable efforts to bec
6、ome business partners with their non-HR counterparts are missing an enormous opportunity. An HRMS is exactly the tool they need to prove that HR can do much more than channel rsums, process benefits enrollment, and maintain a file room. It is not, in and of itself, the complete answer to the questio
7、n How do I prove HRs value to the organization? but it is an absolutely critical, indispensable part of the answer. To take things a step further, companies that wish to become or remain competitive cannot afford to not have a fully functional HRMS.There are at least three significant reasons why th
8、is is true. The first reason is perhaps the most basic. Just like any other part of the organization, the HR department has an obligation to control its costs. But to control costs, you must be able to measure them in the first place.Second - and this has more far-reaching implications - information
9、 about company performance is a critical competitive advantage; personnel information is too important to omit from the equation; and no organization today can effectively gather and analyze the breadth and quantity of data it needs for this purpose without a fully utilized HRMS. The return on inves
10、tment here is sometimes difficult to quantify, but is nonetheless quite real.The third reason for a strong HRMS is that it provides the foundation for a technical architecture that can provide a financially measurable return on investment in the form of greater productivity, and even reduced labor c
11、osts within the HR department. That technical architecture is more generally known as employee or manager self-service.Controlling costsMany companies have been measuring HR-related costs for quite some time. There are many such costs, but those that are tracked most frequently include the following
12、: Total cost of payroll Average salary cost per employee HR salaries as percentage of total payroll Payroll tax as percentage of total payroll Cost per hire (usually related to advertising and recruiter fees/salaries)The data behind these calculations may come from a variety of sources: an HRMS, a p
13、ayroll system, a general ledger system, etc.But other kinds of costs cannot be calculated unless you have the relatively broad data-tracking ability that is found in a fully utilized HRMS. One of these is the cost of a company managing itself. That sounds like a rather complicated equation, but it c
14、an be as simple as the total salaries paid to supervisors and above - stated either as a simple number or as a percentage of total salaries. Simple as the calculation might be, however, you first need to know how many supervisors and managers you have, and what they are paid. This and other measurem
15、ents, including appropriate formulas, are explained in depth by Jac Fitz-enz in his book How to Measure Human Resources Management. Once you know the cost of management - or of anything else - you can begin to control it.HR data is essentialIncreasingly, human capital management is becoming recogniz
16、ed as a non-financial component of an organizations financial success: HR strategy - which should be focused on maximizing the overall quality of human capital throughout the organization - is as important as sales or production strategies. A recent book titled The HR Scorecard: Linking People, Strategy, and Performance discusses this at great and eloquent length. As noted b
